The unprecedented situation we are in right now is teaching organizations, public and private, a lot about how fragile their business is or how robust their latest investments have made them. We explore here what some of those are when it comes to technology, looking beyond basic yet critical aspects, such as collaboration tools or digital communication channels.
Knowledge is power – few will argue with that and many are just now understanding how true that is. Numerous organizations are currently facing significant challenges because of their inability to access or generate accurate and insightful data. It is true that most predictive or prescriptive analytics models are unable to handle the current situation due to the lack of similar historical patterns.
To illustrate this, the International Air Transport Association estimated late February that the potential revenue loss for airlines due to the current situation would be $29bn. Early March, the number rose to $113bn, and three weeks later it stood at $250bn. Companies should strive to implement real-time, data-driven forecasting. Net working capital, cash flows, account payables, etc.: all of these business-critical data points have to be evaluated at an increased frequency to determine whether it is still possible to run the business, pay employees, suppliers or creditors. However, we are seeing an increased number of companies building new models based on back-of-the-envelope calculations. It goes without saying that if this crisis lasts more than a few months, these improvised methods will not be sustainable.
Now more than ever are we witnessing the benefits of digitalization and automation. In times when most employees have to work from home to comply with government-imposed containment measures, organizations that have automated business processes are seeing a limited impact on their operations compared to others.
Automated invoice processing, chatbots, cloud-based services, digital signatures, etc. not only allow organizations to be run remotely, but they also weaken the impact of a limited-availability workforce on business operations. While it is highly unlikely that a crisis of this magnitude will occur in the years to come, it has brought to light that automation and digitalization are fundamental to the survival of any organization.
Most organizations have implemented measures to monitor the performance and effectiveness of processes and controls. What we are seeing right now is that a number of these processes and controls are being adjusted or bypassed to allow companies to respond to rising urgent needs. From allowing direct purchases from suppliers to authorizing the download and use of unapproved software, a company’s ability to quickly adapt is of vital importance yet needs to be understood and communicated.
While perfection is the enemy of speed, organizations should ensure that changes to their operations are made in a controlled manner or overseen by intelligent monitoring such as process mining or continuous control monitoring. This should allow decision-makers to understand the extent to which processes are changing while keeping a tight grip on key controls such as fraud prevention or cybersecurity.
Nothing boosts innovation more than crises. That is as true of government and central banks’ fiscal stimulus policies as it is of technological innovation in the private sector. Employees and employers alike are identifying new ways of working or innovative approaches to running their operations. Online services promoting local businesses are popping-up all over the place, digital collaboration tools are revolutionizing old-fashioned team management, governments are putting more efforts into enabling online voting – the list could go on.
A US-based food distribution company, deployed a new supply chain and billing system in less than a week. Organizations should embrace and enable, now and in the long term, the sharing and promotion of innovative ideas and think about the success factors in the current innovation process.
Every cloud has a silver lining, and so it is with this crisis. In this case, the silver lining is that if you have not done so yet, this crisis has most likely shown that you should either pursue or accelerate your efforts to automate and digitalize business processes and services. This crisis is also the moment to show short-term flexibility in the implementation and operation of controls together with an increase in monitoring of high risk areas in order to safeguard the company.
It has always been clear that real-time, data-driven insights make for better informed and timelier decisions but the crisis has only further highlighted this need. If Management needed any further convincing that this is money spent wisely, the crisis will be on your side.
And last but far from least, don’t be afraid to experiment with new ideas. In fact, now is the time to unleash that bold and natural innovator in your people. It might just be the most important decision you have made in this crisis.