As we enter 2022, some hardships that hit the business world since the pandemic began will begin to ease, while others issues will undoubtedly grow more dire, according to experts at Pricefx, the global leader in cloud-native pricing software. The biggest issue for companies in 2022 will be how to react to continuing inflation and the underlying issues of supply chain bottlenecks, energy and commodity price volatility, and continued labor shortages.
“Some companies are thriving; others are suffering,” said Martin Wricke, Co-founder and Product Advisor at Pricefx. “Those that are thriving have the resources to invest in technologies, better processes and their workforce. Looking back at the end of the year in 2022, the companies who will be considered winners in this period will have been able to continue to increase productivity and generate growth. Agile pricing platforms, data science, and optimization will play a part in this success. This economic disparity could create a very different market landscape in five to ten years, leaving companies who are scraping by in the background.”
Pricing experts John Gilbo, Garth Hoff, Jose Paez, Gabriel Smith and Martin Wricke predict the following in 2022:
Chip scarcity will get government attention.
The global shortage on semiconductor chips is impacting more than 169 industries and it doesn’t seem to be close to being resolved, this will continue to lead to significant economic impact such as cost increases, price / demand volatility and more. With no end in sight and no real way to fix it other than to slowly rebuild manufacturing capacity of the main providers, it is very likely that chip sovereignty will be the new power independence topic as governments try to push for ways to reduce their economic dependence on a handful of providers across the world.
The supply chain will begin repairing its links.
The supply chain will improve in 2022 as it is already showing signs of recovery. Existing ports will increase throughput and smaller lesser-known ports in the US, like those in Florida and Texas, will handle more of the load. Expect to get back to a more normal flow of goods and release of pent-up demand.
The driving force of the U.S. supply chain will be in the driver’s seat.
Compounding the current struggles with supply chain bottlenecks is the apparent scarcity of truck drivers, the industry seems to be looking for solutions but this alone can mean a pretty penny for transportation costs if not resolved or if resolved in ways that can lead to union strikes such as enticing younger people to become drivers or temporary work permits for truck drivers from Mexico that can lead to lower wages or misuse. This issue will only grow in 2022 and will be a major point for organizations to focus on to try and reduce its impact.
Inflation leads to more sophisticated pricing strategies.
Inflation will continue, but at a more modest pace than 2021. Companies are willing to do more and move faster to implement a price change to recover cost increases. Overall, pricing will need to be nimble to react to cost fluctuations and therefore be more automated and reduce human intervention in executing changes. There is also a move toward more sophisticated pricing models and increased interest in transitioning to subscription pricing.
Workforce woes will linger.
Any economic rebound in 2022 will largely depend on a strong workforce. The current lack of workers in many industries creates a ripple effect impacting nearly every company. 2022 will continue to favor employees through wage increases that will become the new floor as companies will not be able to lower pay in the future to keep staff.
Tariff trials and tribulations will prompt companies to be proactive.
Another lesson from the last few years was management of tariffs and their immediate impact on an organization’s bottom line. Previously thought as a component of cost that seldom changed, the ongoing trade war between the U.S. and China since 2018 has impacted billions in traded goods, driving a significant decrease in imports and exports that lead to reduced options for consumers and a direct increase in prices. Many companies did not have the means to quickly understand the impact of tariffs and how to react to them. In 2022, lessons learned during the pandemic will drive companies to put controls in place and be more proactive about tariffs and pricing.
Data science expands beyond the elite organizations.
As the shortage of qualified data science graduates continues, expect to see the rise of the “citizen data scientist.” Companies will scramble to find existing internal resources to champion the next-stage intelligent systems. The lack of qualified candidates also reinforces the need for AI and machine learning driven solutions driven by savvy business users for all but the largest organizations.
Data Science as a service is expected to flourish in 2022 as more companies recognize the value of data to identify actionable insights but also as a key component of digital transformation initiatives. Big companies will invest in developing their own teams to support these initiatives, but smaller organizations will not be standing idle. These services will provide a diverse offering that companies will be able to work with depending on their level of maturity with analytics and data science. For larger companies, the more in-house data scientists will be involved in pricing segmentation optimization, thus increasing the need for “bring your own science” models.
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About Pricefx
Pricefx is the global leader in SaaS pricing software, offering a comprehensive suite of solutions that are fast to implement, flexible to configure and customize, and friendly to learn and use. Based on cloud-native architecture, Pricefx delivers a complete price optimization and management platform that provides the industry’s fastest time-to-value and lowest total cost of ownership. Its innovative solution works for B2B and B2C enterprises of any size, in any industry, in any part of the world. Pricefx’s business model is entirely based on the satisfaction and loyalty of its customers. For enterprises facing pricing challenges, Pricefx is the cloud pricing optimization, management, and CPQ platform to dynamically Plan, Price and Profit.
For more information, please visit www.pricefx.com.
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