A third of companies was troubled by rising costs last year. Modifying processes and technology helped

For Czech and Slovak companies, the biggest challenge in 2023 was rising costs and a lack of qualified labor. Most often, they resisted this by simplifying processes and investing in technology. A survey by Grit showed this.

High inflation, a saturated labor market and technological advances. These are the external influences that most affected the life of Czech and Slovak companies in 2023. This is confirmed by research from Grit, which asked 130 companies across industries and sizes about the biggest challenges they faced last year.

Over 33% of respondents consider the biggest obstacle last year to be the growth of company costs and 26% a decrease in sales. It is therefore apparent that firms were still struggling with declining but still high inflation last year. 30% of respondents were struggling with staffing and, in particular, a lack of qualified labor.

"These challenges can push companies to hasty solutions in the form of price increases or drastic cuts. These may help them in the short term, but they can damage the company in the future. That is why we were happy to see that, according to the data, more and more companies are taking a more thoughtful approach. They are looking for ways to simplify or automate processes in order to reduce operating costs," says director of Grit Lubomír Veselý.

Automation and digitization as way out of crisis

Less than half of the respondents stated that they respond to the mentioned problems by optimizing operations and production. In other words, they are actively looking for ways to shorten or simplify set processes, for example by using digitization or automation technologies. 37% of respondents invested in them last year. Companies realize that higher work efficiency not only reduces operating costs, but also facilitates operation in the event of a lack of employees.

"When a company wants to reduce costs, it should carefully go through one process after another and think about whether they can be done differently and more simply. For example, there are still many accounting offices where employees print received documents from e-mails and then manually transcribe them into the information system. This kind of work costs companies tens to hundreds of hours a month and errors occur during it. Today, there are software tools that handle this process completely automatically," explains Lubomír Veselý.

Of the companies that invested in technology last year, 72% purchased software or company cloud tools. Furthermore, 55% invested in hardware and 32% in production machinery. This is in line with the trend where companies prefer to invest in solutions with a quick return, such as cloud tools.

A quarter of companies is burdened by technological debt

In addition to the challenges mentioned above, 25% of companies cited their technology debt as a major problem last year. In other words, outdated hardware, software, or cyber security solutions that, due to the rapid technological progress of recent years, no longer fulfill their function.

"It is good that companies are aware of the obsolescence of their systems. Year by year, the percentage of Czech and Slovak companies that implement tools for automation is growing. For companies that have been putting it off for now, the train is already leaving the station," concludes Lubomír Veselý.

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