FINANCIAL PLANNING AND ANALYSIS
A lighthouse in the storm We ask how businesses can offset the effects of inflation by using AI-based scenario planning. Tim Caudill Director, Solution Advisory Americas, Jedox Inc
AIAWORLDWIDE.COM | ISSUE 126
In the United Kingdom specifically, inflation reached double digits by September 2022. In mid-October, Prime Minister Liz Truss resigned after just six weeks in office amongst market turmoil and a failed tax-cutting budget. Meanwhile, the consumer market continues to react, with the Consumer Prices Index (CPI) surging to 10.1% within a 12 month span from last September. A large price increase in food and non-alcoholic beverages, as well as furniture and household goods, contributed to this surge. These numbers indicate that the cost of living and covering basic needs have consumers tightening their wallets for other purchases. What does this mean for business? And what can organisations do to offset this trend? It starts with scenario planning. But first, let’s look at what inflation is and how to adapt to it.
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lobal inflation has its grip on the world economy as organisations learn to adjust to its impact on business performance. Fast action and decisiveness are in order to remain afloat among geopolitical tensions, the resulting supply chain disruption and increasing market uncertainty. It is an interesting time to be an accountant today – a role that can be a lighthouse in the storm. The financial planning and analysis (FP&A) landscape has notably changed over the last few years due to many challenges, including a global pandemic, energy crises, climate change, cyberattacks and remote work. In addition, a rapid rise in prices and interest rates that began in 2022 has continued to garner international concern and action. In many countries, inflation has reached 40 year highs, and energy and food prices have seen the biggest price increases.
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