Unlock - Post Covid-19 Business Era
What are finance professionals and business leaders considering as they plan for the new normal in the recovery phase?
In the last few months, the only certainty in business has been uncertainty. But even as we’re still stuck in at least partial lockdown and social distancing measures may remain for an extended period, as work, gathering and travel restrictions are relaxed, the need to prepare for the post COVID-19 world becomes more pressing.
Working remotely – the ‘new normal’ enabled by technology
If there is one positive to emerge from the COVID-19 crisis, it is the acceleration of the digital transformation that many organisations had already set in motion prior to the crisis.
There are plenty of examples of how both consumers and providers have embraced technology to keep economic activity possible, and there is strong evidence that many of these new technology-based ways of operating are here to stay.
This becomes clear when we consider how healthcare providers have rapidly migrated into telehealth, retailers have moved to contact-less and online shopping and delivery and insurance companies have transitioned to self-service claims assessment.
The COVID-19 crisis provides a sudden glimpse into a future world, one that shows many organisations and consumers increasing the pace of technology adoption. Many organisations have swiftly rolled out technologies that enable remote working for the majority, if not all, of their workforce.
The new workforce – tech-savvy graduates are welcome
Several audit firms are now likely considering how the audit landscape may change permanently in the future and will alter their strategy. Those seeking to strengthen their position after the crisis will go beyond just adopting technological solutions: they will also recognise and act on the need to employ staff with digital skills.
The increasing use of technology in the audit will reflect on the skill set needed for new hires but also existing staff. In house training and professional development focused on technology skills are becoming more necessary.
This is an essential step to provide employees with a strong understanding of the role technology and data play in the audit and to address the digital skills gap in the audit market.
Looking forward – staying ahead in the race against time
The COVID-19 pandemic has spread at an extraordinary and unprecedented pace and dealing with the uncertainty amid constantly changing conditions has become more important than ever before. Client behaviour and business models will change, and the challenges associated with it will be greater than what we are used to.
To lay the groundwork to deal with what may be permanent changes to businesses after the crisis, finance leaders are wise to act now. The reality for many companies is that their current budgeting processes may not have coped well with the crisis. There may be significant challenges in setting credible budgets as businesses and economies transition towards recovery.
We need to apply a more timely, dynamic view, of the future instead of doing a monthly budgeting type of thing. That cycle is now too cumbersome and not timely anymore. Financial metrics across the bank change daily. What we have done now in some areas is to run a pre-forecast at a very high level twice a week.
You have to become very responsive and the monthly catch-up on business just simply doesn’t work in the current environment. Fast-response time from a finance professional perspective is becoming increasingly important. Not just during the crisis but also following the crisis because there will be a lot of market opportunities for competitors to bounce in and for market share to shift rapidly.
In short, resilience – the ability to absorb a shock and to come out of it better than the competition – will be the key to survival and long-term prosperity. As lockdown restrictions ease, businesses will need to figure out how to operate in new ways. We will face high levels of unpredictability in the future. The worst you can do is to be paralysed by uncertainty and unpredictability. You cannot avoid uncertainty, but you can – to an extent – manage and control it.
Developing scenarios for multiple versions of the future of the business and formulating adequate recommendations for actions for each scenario will help to decide on the right course of action. The point is not to develop detailed plans but rather to remain agile in forming strategic or even tactical responses. Being on the fastest trajectory will become more important than having a detailed action plan because plans can very quickly become outdated.
The aim of scenario analysis is not to discuss which scenario is most likely to eventuate, but rather to consider what looks plausible and to raise awareness among decision-makers.
Staying positive – finding the silver linings
From a business perspective, there are likely to be some positive outcomes. Although these will not necessarily compensate for the adverse economic impact, they are likely to shape our future thinking on how business practices evolve.
One of the silver linings is technology-enabled remote operations. Individuals and businesses are learning new ways to engage and operate remotely. If these practices remain after COVID-19, the workforce will become more flexible. The possibility to work flexible hours remotely is often critical to support employees at different life stages, such as parents with young kids.
Another positive outcome may be that business leaders have gained a better understanding of what can and cannot be done outside traditional business processes. This particularly affects audits, of which some processes require direct face-to-face engagement between the auditor and the client.
At the same time, however, we have seen that some clients appreciate the speed with which organisations move forward and change how they do things. In short, COVID-19 accelerating the pace of workplace innovation.
Indeed, as we are moving towards a post-COVID-19 world, businesses will realise that where they land is a matter of choice and countless decisions to be made. Developing different scenarios may make the decision-making process easier.