In the middle of February 2020, three weeks before the WHO declared a pandemic, a colleague of mine in Singapore asked me to schedule in a meeting with a mutual client to view their new real estate assets across the UK. The trip was to be in the second week of March, subject to change ‘dependent on the COVID-19 situation’.
Instead of meeting the client, like many of you reading this I spent that second week in March working on our business response to COVID-19. KPMG’s business continuity plan kicked in and, whilst it certainly wasn’t a case of turning to a specific chapter on pandemics, it was clear that we had appropriate procedures in place that allowed us to successfully move forward both internationally and within the Crown Dependencies.
The most urgent considerations were information and communication; making sure that our staff had the resources available to them in order to cope with the situation and that our clients were also appropriately informed of our response.
We had to manage the transition to 100% remote working and issues caused by not having physical access to clients and their data. From a business continuity perspective, assuming we could ensure our teams’ welfare and we could safely send and receive data, then (on the assumption our clients could do the same) key initial hurdles could be cleared. We also needed to consider the financial impact on our clients following the unprecedented shock to their business models and the very real existential threat some of them faced – not forgetting the accounting and audit considerations that resulted.
COVID-19 kick started a revolution and acted as a significant catalyst for transformation. Whilst some of the above-mentioned hurdles were jumped, others including typical organisational and cultural barriers were simply pushed aside. Just because we previously tended, or in some cases were made, to do something in a certain way no longer seemed to matter. Projects and decision making were implemented in days and weeks as opposed to months or years. No better worldwide example exists than the need for a vaccine and its subsequent development and, closer to home, the success story of the island’s track-and-trace technology as well as the excellent local vaccine roll out. There are numerous other examples of significant transformation in every facet of the new reality that we now live and work in and, more often than not, front and centre is technology.
Long before the pandemic struck, advances in technology, an explosion of data and the need to be more relevant in financial reporting were driving audit transformation. In response, KPMG launched KPMG Clara, the new global audit platform that uses the latest technologies (such as cognitive automation) and is designed from the bottom-up to evolve and grow to integrate new technologies into the mainstream audit.
In the Crown Dependencies, our digital team has been pivotal in shaping our digital strategy, developing internal tools and working with global and local clients to help them put the right technology in place that matches the needs of their business. This has included automating reconciliations between systems, creating bots to perform time-consuming repetitive tasks, automating tax submissions and undertaking digital transformation readiness reviews.
We have also developed the KPMG Economic Substance Tool which helps entities to identify the rules, assess the likelihood of compliance and collate relevant information in preparation for the submission of subsequent tax returns – housed within an environment that has management review and control processes built into its core.
Having spent a couple of years working with tech clients in San Francisco and Silicon Valley, I have seen other emerging technologies first-hand and worked with people who understand how to get the best out of technology. The success stories all appear to share characteristics that don’t change irrespective of whether there is a global pandemic or where your business is physically located, what your product or service is or how big or far reaching you are.
The first of those characteristics is Awareness and the need to understand what the need is. Is it operational such as a clear need to fulfil an existing requirement, perhaps linking two existing systems or automating a process that can no longer be done manually due to size or time or money? Or is it opportunistic – the chance to improve and do something more efficiently or do something related (or completely new) to gain a strategic advantage. Separate fact from opinion and understand the information. Every day that passes the information available to us grows and the lines between fact and fake is blurred - election results, misinformation over vaccination risks, political and economic positioning and whether or not the man in the video is indeed Tom Cruise. The best decisions are made using the best information. Be aware of your awareness.
The second key characteristic is Mindset. What if the pandemic hadn’t happened? Would we still be doing things the way we have always done them? Has the change been a success – are we less resistant to future change having witnessed the benefits of the changes we have been forced into? As reported in the KPMG 2020 CEO Outlook, pre COVID concerns expressed by CEOs about migrating their business to the cloud were significantly erased as a result of the pandemic forcing everybody to embrace digital technologies. An open mind and a considered cost/benefit analysis with consideration of options along with that good old-fashioned gut feeling is required. If you are not technologically savvy, then you owe it to your business to let someone who is provide their insights and suggestions. You can always say no.
Finally, Application of technology is fundamental to success. If you are going to invest time and/or money into technology, then commit to ensuring that you have the right technology and that you know how to use it. No good having a sledgehammer to crack a nut or having a nut when you need a bolt. Don’t be afraid to make a decision but understand how long you have to make it. If you have time, then consider using it. Prioritise.
Now is the time to reassess those short-term strategic decisions and ‘new ways’ which enabled your business to navigate the pandemic. They may have worked over the past few months and they may still be the answer now; but we must continually assess their appropriateness in terms of longer-term strategy. The last year has taught us that reviewing current technology and considering emerging technologies must be a regular and recurring agenda item whether sat at home on Teams or together in the board room.