Business disruption
Business disruption
The Competence Cauldron

Business Continuity at Risk

Ravi Kumar Pillai

Ravi Kumar Pillai

Global risk perception is currently at a peak seldom witnessed in the past. The emerging economic situation is being compared by many to the dreaded Great Depression that devastated American, European and South East Asian economies in the early 1930s. Due to the highly connected nature of commerce and industry and the cascading effects of risks and uncertainties across borders, today’s scenario is far more sensitive to susceptibilities than at any time in history. In this scenario, the menacing spread of COVID- 19 sweeping across more than 150 nations raises alarm bells on business continuity.

Shuttered down malls and entertainment houses, near empty roads and public transport, airport concourses resembling scary expanses of loneliness, over-burdened hospitals and testing labs all look too unreal in this age of scientific and technological advancement. The leading stock exchange indices across the world are shedding points like a shaky pack of cards.

After being caught unawares, businesses are waking up to the new normal – a possibility of prolonged business disruption and the need to put in place sound contingency plans to stay relevant and operational. Risk management capability is the most critical survival skill at this juncture. Time has come to assess the preparedness of businesses to handle unexpected challenges with resilience. When most businesses stare at gathering clouds of uncertainty, coming through the crisis safe, sound and positive becomes the top priority for individuals, enterprises and economies.

Gartner, a leading global consulting firm on Technology trends and challenges, conducted a pulse survey to gauge the readiness of the technology industry to face the Corona threat and ensuing disruption. Just 12% of more than 1,500 executives polled in the survey held on March 6, 2020 agreed their businesses were adequately prepared for the impact of corona virus. Most respondents (56%) rated themselves somewhat prepared and 11% said they were either relatively or very unprepared.One-fourth of respondents felt the virus would have little impact on their business. With the enormity of the unfolding crisis dawning on them, most of the nay-sayers would likely revise their business confidence to more conservative levels.

Risk management and business continuity have been recognized as key executive competencies in the best-in-class global enterprises. Technology companies are especially sensitive to risks and uncertainties that could disrupt their operations and enterprise viability. Their extra sensitivity to unexpected challenges is in line with the nature of the digital technology domain. Risks from disruptive technologies and competitors, talent sourcing and retention challenges, infrastructure constraints, exchange rate fluctuations and frailties in global contracts management are a few of the inherent risks in their business and operating models. Therefore, one would find technology companies with operational maturity paying serious attention to managing, mitigating and monitoring risk parameters. However, the Corona outbreak has introduced additional risk elements that call for review and restructuring of their risk management protocols. As for start-ups and SMBs, the challenges of realigning to the COVID-19 scenario could prove daunting due to the tentative nature of their financial soundness.

Even when robust business continuity protocols exist, they focus more on physical, technology and systems infrastructure. The current crisis has an enormous human element to reckon with. COVID-19 has restricted travel, transport, meetings and physical networking. Closing down of schools and care homes has created additional demands on work-life balance hampering operational readiness of workforce.

If the crisis prolongs, there would be enormous strains on order flow as well as collection of receivables. Working capital constraints would affect fulfilment schedules adding to the financial woes and affecting the very survival of many of the smaller players. Let us for the time being keep aside these longer-term fallouts and look at more mundane operational issues of urgency.

How are organizations attempting to tackle the crisis and with what effect? What are some of the common challenges faced by employees and organizations in devising and implementing contingency plans? What more can be done to smoothen the situation?

Organizations across the globe are busy crafting contingency plans to deal with COVID-19’s impact on their operations. Many of them have temporarily suspended all non-critical business travel and discourage personal travel unless essential. Those who have visited an impacted area or have a household member who has done so are mandated to work remotely for at least 14 days. Employees are advised to minimize face-to-face meetings and instead use video conferencing for internal meetings and meetings with clients. Handshakes have been replaced by namaste, bowing or elbow-to-elbow greeting.

Work-from-home has emerged as the most preferred and common response to COVID-19 disruptions. Many Technology companies have robust and well-tested work-from-home capabilities and protocols as part of their risk management strategy. However, in the Indian context there are many challenges and constraints for home-working to become a popular and sustainable option.

Firstly, adopting a work-from-home mode requires clarity of roles, responsibilities, processes, accountabilities and performance matrices. Digital dashboards and scorecards are the best ways to ensure effective monitoring of quantity, quality and time parameters of deliverables. Home-working assignment is more like a Service Level Agreement under which the employee commits to measurable targets as per specified standards. Where organizations are not already digitally aligned for remote working, the transition would involve time and cost. A provisional approach would be to adopt a hybrid model comprising both manual and digital reporting and tracking. This leaves scope for inaccuracies and weak controls in the short term. But for handling the crisis on hand, options are limited.

Secondly, infrastructure poses the biggest challenge to remote working in India. According to the most recent Census data, over 40% of Indian homes have just one room. The average household family size being over four, most technology workers in India would find home-working not easy, with little privacy.

Speedtest Global Index- 2019 ranked India 70 out of 176 countries by average fixed broadband speed and 128 out of 141 countries by average mobile internet speed. The average fixed broadband speed in India is 27.15 Mbit/s (download) and 26.59 Mbit/s (upload). The corresponding mobile internet speed in India is 11.52 Mbit/s (download) and 4.56 Mbit/s (upload). Most people in India access the internet over mobile networks rather than through broadband fibre-to-the-home connections. Hence inadequate bandwidth and frequent interruptions are critical issues hampering work-from-home capabilities.

Power supply too is erratic in many parts of the country. How can remote-working be efficiently carried out extensively in these circumstances? The fear of disruptions due to infrastructural constraints hold back many enterprises from opting aggressively for remote working.

Thirdly, security concerns loom large with many instances of hacking and phishing reported in India. Clients, especially overseas ones, are likely to be sceptical about extensive remote working on their data-sensitive assignments. After all, India’s reputation in cyber security and cyber-crime policing is still far from optimal.

Fourthly, COVID-19 has impacted the human side of organizations in multiple ways. The vast majority of organizations, barring the bigger entities in the technology sector, have never tried remote working as a viable option. Even in functions where remote working is feasible, what has held back experimenting the model is the deficit in trust and engagement levels between the organization and its people. It calls for a major shift in the mindset of both employers and employees to adopt remote working as the new normal. There would be a need to realign HR policies and compensation structure to reflect the challenges and demands of work-from-home.

Finally, switching to remote working impacts diverse stakeholders at the marketplace and in the supply chain. It requires a well-planned and effectively implemented communication strategy to ensure everyone is onboard. There would be genuine concerns and queries which should be answered with care and understanding. When it comes to communicating the changeover to remote working, employees should not be left to rely on incomplete, inaccurate and secondary sources for the rationale, processes and procedures of operating in the new mode. Similarly, the customers need reassurance that quality, security and schedule of deliverables would be maintained as agreed.

Every business, big or small, should develop a risk management and business continuity plan. Irrespective of the nature, headcount, revenue, technology or market composition of the business, every enterprise should have a documented risk management framework. It should be comprehensive enough to cover the strategy, plans, processes, Standard Operating Procedures (SOPs) and competency frameworks to tackle risks and uncertainties.

In designing and rolling out a business continuity plan, it is important to map the business processes and identify critical risk nodes in the flow. This is best done by forming a small cross functional team with a lead role assigned to a key operational manager. The primary focus of this exercise should be checking the business resilience and identifying action points to enhance risk management competence. Technology, operations and customer management criticalities should be reviewed and intervention initiatives identified, prioritised and acted upon.

A key aspect of process resilience would be the capabilities for activating remote working mode at short notice. Activities in the business process should be classified into three buckets – those which cannot be handled remotely, those that can be serviced remotely but the transition involves cost and time and those that can be smoothly transitioned to remote work mode. Once this is done, steps can be taken for a phased migration to remote working. Provided, the competence, infrastructure and security issues are streamlined.

COVID -19 has amplified the urgency for the inevitable digitalisation of business processes. Moving to paperless, cloud-based and remotely accessed working entails much less need for operating within structured infrastructure.

Smart organizations that take the cue and speed up the transition would have used a challenging situation as an opportunity for long term transformation. Maybe, COVID-19 took most of us by surprise. But it did provide an opportunity for us to ensure that when the next crisis manifests, enterprises and global workforce would be much better prepared to face the situation with resilience.

*Ravi Kumar Pillai is a practising strategy consultant, trainer, coach, mentor and start up enthusiast based in Trivandrum. He can be contacted at ravikumarpillai9@gmail.com

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