What can businesses do to protect themselves?
How, what and where to focus on after COVID 19
Introduction :
The economic impact of the 2019-20 coronavirus pandemic in India has been hugely disruptive. World Bank and credit rating agencies have downgraded India’s growth for FY 2021 with the lowest figures India has seen in three decades since 1990.
However, the IMF projection for India for the financial year 2021-22 of 1.9% GDP growth is the highest among G20 nations. Within a month unemployment rose from 6.7% on 15 March to 26% on 19 April. During the lockdown, an estimated 14 crore (140 million) people lost employment.
Steps after lockdown :
Looking to gross negative scenario in India and across the globe, we would like to present the road map as to what the buisnesses do to protect themselves and what are the key areas which can provide some relief in this period of pandemic if acted wisely, systematiclly and scientifically.
1) Workforce
Managing disruption of productivity due to the coronavirus outbreak. The three aspects that we need to ensure:
Workforce safety
How to focus on:
- Strengthening remote working capabilities
- Creating a strategy for communicating factually and effectively
What to focus on:
- Ensure employee safety
- Prioritise the strengthening of remote technology capabilities
- Assess the impact on global mobility and business continuity
Where to focus:
- Managing employee morale
- Managing employee productivity by developing a remote working model
- Workforce planning
- Compensation and benefits
- Maintaining agility around growth plans for the future
2) Supply chain
Maintain business continuity and protect your supply chain. How to focus on:
- Consider the financial and legal implications and impact of supply chain disruption on margins, cash flow, loan repayments and terms.
- Strategise for transparent communication with customers, external stakeholders and employees.
What to focus on:
- Prepare a contingency planning to re-address the balance of supply and demand.
- Identify your critical products and suppliers by carrying out risk modelling for regions, commodities and suppliers so that the impact of disruption in any of these variables can be assessed.
Where to focus:
- Simulate scenarios that enable sound decision making and use intelligent analytics that can allow complex permutations and combinations to be factored in.
- Create a cross-functional crisis response team as inputs of all relevant stakeholders such as suppliers, manufacturing sites, logistics and warehousing are needed for a comprehensive response which is cohesively implanted in a timely manner.
3) Business continuity — work from home
Making work from home technologically feasible and secure to ensure business continuity.
How to focus:
- Ensure continuity of hardware and data centres.
- Ensure availability and usage of software and licensing.
- Ensure secure access and authentication for all services and applications.
- Ensure physical security of technology assets.
What to focus on:
- Assess employee awareness of working from home and reiterate through frequent email communications the secure practices to be considered while working remotely.
- Manage internet, virtual private networks (VPNs), collaboration tools, IT and security operations during a crisis.
Where to focus:
- Evaluate cyber security considerations during work from home as people become more vulnerable to cyberattacks as they spend more time online.
- Assess the adequacy of organisations on IT and cyber security related governance.
- Assess bandwidth sizing for both downstream and upstream, and data backup. Plan for a peak-load scenario.
4) Financial liquidity and risk
Financial risks and planning for present and future. How to focus:
- Cutting the tail: Reduce the amount of external credit needed and maximise the credit available from within an organisation. Instill a discipline of financial challenge to prioritise the cash flows appropriately.
What to focus on:
- Cash flow and forecasting models: Companies should evaluate the impact on their cash flows through a thorough review of their credit lines, debtors and creditors.
- Simulations and scenario analysis: It is essential to set milestones at which different levels of measures can be planned by organisations. They need to consider various scenarios from optimistic to pessimistic and understand the impact of the same on the financial models developed.
Where to focus:
- Prioritise cash flows: Companies need to judiciously allocate its existing resources into achieving mission- critical outcomes.
- Market volatility management: All financial exposures of a business as well as important investment decisions should be revalidated and retimed based on the simulations, scenario analysis and forecasting models.
Conclusion : The increasing widespread of COVID-19 has transformed the world’s hustle into varying degrees of uncertainty. One of the few things that seem fairly certain is that the current downturn is fundamentally different from recessions we have seen in the past. This is not just another turn of the business cycle, but a shakeup of the world economic order. While countries and companies continue to comprehend the scale of this pandemic, it is certainly undeniable that we are staring at more permanent, structural changes to the way we live, work and play.
The collective experience of going through this common crisis will lead to questioning of fundamental assumptions and priorities which will be both a challenge and an opportunity .
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