With the looming uncertainty that is Brexit creeping ever closer, many businesses are unsure about how to prepare for brexit.
It has been over three years since the UK voted to leave the EU, yet there are still little known details about the Brexit agreement…
Distance rumbles of a negotiation breakthrough come in waves from Brussels and Whitehall, yet the more negotiations continue, the less likely it appears that a deal will be struck.
Following the recent completion of an EU exit impact study by Efficio for a UK department within central government, the results indicated that there would be an 8 per cent rise in costs as a result of Brexit.
A recent poll conducted with 800 business leaders by the Institute of Directors revealed that around 49% of businesses nationwide “do not anticipate drawing up nor implementing any contingency plans for Brexit”
Also mentioned in a recent article published in Procurious, was the recent Survation survey by Maritime UK. This survey found that nearly half of businesses had conducted little or no preparation ahead of the UK leaving Europe. This, they argued, was because they had little belief that the UK would leave without a deal.
To be prepared or not to be prepared?
When it comes to preparing your business for the arrival of Brexit, there is no blueprint in place to help unsure companies be prepared. A complex situation, Brexit has become even more complex through the Brussels desire to safeguard the EU project, whilst making the UK pay a higher price for its independence.
Along with biding their time, many public and private sector organisations are abiding their time, waiting for an exit agreement to be put into place before having to commit both time and money.
Whether this situation is caused by either a deliberate, tactical approach or an inability to deal with the unsure task, now is not the time to do nothing, instead, be prepared and make the required changes to prepare your business for the arrival of Brexit.
With limited time remaining, businesses nationwide should be using this crucial time to access their sourcing strategy, review contracts and supply chains and ready themselves for the unknown that lies ahead.
How to prepare for brexit?
When it comes to how to prepare for brexit,there are three core pillars of procurement that organisations should evaluate and improve.
From existing contracts, sourcing strategies and current suppliers, by streamlining the process and putting preparations in place, as a company, you can be prepared for any challenges that arise from Brexit.
One of the first tips to how to prepare for brexit and that is by evaluating and understanding your contract risk profile. By taking the time to identify the risks against the hierarchy of needs, you can put together a safety net. Some of the potential risks that might occur following Brexit, include: EU funding reliance, lack of freedom of movement, in turn restricting labour availability and an increase of wage, foreign exchange and tariffs increase cost pressure.
By taking the time to review your contract clauses linked to termination, cost pressures and legal changes ahead of the EU exit, you can reduce the amount of risks that might be created.
2. Sourcing strategies
For those wanting to be prepared for Brexit and the worse case scenario of a no deal brexit, it is recommended that you review your existing category strategies.
By reviewing strategies that have already been set in place, you can understand the current objectives, sourcing strategies and the pipeline of work. This allows you to identify which parts of the strategy will be affected by the EU exit and which will be most significantly impacted, helping you to alter and improve your category plans to be prepared for Brexit.
A final and third recommended method to preparing your business for Brexit and that is by engaging suppliers and your access to the wider market following Brexit.
By conducting this task, you can pinpoint costs and risk drivers within the key categories, while working to review contracts with current suppliers while reviewing expected pressures following Brexit, mitigation plans and the company’s main risks.
With the use of deep knowledge and understanding, paired with contingency plans on how to best deal with these changes are essential in minimising any risks following Brexit.
Be Brexit prepared?
Efficio is working with a number of public and private sector companies, including large central government departments, to carry out detailed readiness analysis ahead of the EU exit. The service is designed to prepare organisations to make fast, structured change and mitigate risk when the time comes.
Available for companies that want to be prepared and put together a plan in place, discover more about how to prepare for brexit and take our Brexit Readiness Assessment
*This article was originally published on Procurious.