Expect Continuing But Waning Impacts Due to the Challenges Posed by External Forces

Dresner Advisory Services’ ongoing research on the impacts of external forces on organizations yields insights into how the rising cost of capital will challenge enterprises to become more Hyper-Decisive® or risk degraded operations, customer dissatisfaction, and competitive decline. Our research focuses on the impact of (now) seven key external forces: economic uncertainty, supply chains and supply-chain issues, the COVID-19 pandemic, the labor market, geopolitical instability, regulatory compliance, and climate change (newly added).

These external forces remain powerful and likely will continue to affect the business cycle through the end of 2024, although many organizations expect impacts to steadily wane but not disappear (see the Research Insight “Successful BI Initiatives Better Mitigate the Impact of External Forces”). In the interim, we expect higher interest rates and quantitative tightening will make the cost of capital continue to rise, and reintroduce risk into business and technology investment decisions. Business leaders will need to manage and operate business models resilient to rising capital and labor costs.

A majority of organizations now indicate experiencing negative impact in the last six months due to labor markets and COVID-19 (51 percent each), supply chains (54 percent), and most frequently, economic uncertainty (67 percent). We believe these external forces and the prevalence of their impacts likely will lead to an extended period of global stagflation and recession.

Many managers and executives experienced the types of challenges posed by external forces for the first time in their careers as their impacts emerged as significant business factors in 2022. And most data leaders have limited experience facing these unprecedented challenges—including intense pressure on business leaders. To best find advantages and opportunities and overcome these challenges, executives and strategic plans increasingly will require leveraging the competencies and capabilities in the Dresner Advisory Services Hyper-Decisive Maturity Model. Hyper-decisive organizations will have an edge.

External forces continue to provide data leaders with a clear mandate to improve data sources and quality, and drive their organizations to invest more in advanced analytics. But data leaders should not lead these C-level discussions with BI. Instead, they need to show how the combination of data and analytics approaches, competencies, literacies, processes, tools, management, and governance supports specific business objectives and enables achievement of specific business outcomes. Once that understanding is in place, establishing and obtaining necessary and appropriate investment levels becomes a much easier discussion.

After executives align with this vision and agree to fund its implementation, data leaders should leverage the Dresner Advisory Services Hyper-Decisive Maturity Model® to first benchmark the organization’s data and analytics competencies and capabilities, and then track the progress of their planned evolution (see the Research Insight “Introducing the Hyper-Decisive® Maturity Model”).

Organizations that are Hyper-Decisive—the apex of innovation and perspective—instantaneously process vast arrays of data and information and deliver actionable insights to a growing community of users. People in these digital enterprises then leverage these data and insights to make optimal business decisions that mitigate current changes and disruptions caused by external forces, as well as position their organizations for future success (see the Research Insight “Leverage HDMM to Improve Risk Planning and Make More Data-Driven Decisions”).

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