Ever since the outbreak of Covid-19, one of the worst global recessions is being witnessed globally, with the worst financial impact on businesses without any pre-defined or expected end.
Several businesses have to let go of their conventional operational methods and adopt new techniques and technologies to survive. Organisations now have to re-model their structures and anticipate stressful situations with a quick response strategy and real-time assessment.
As the future remains unclear, organisations now must adopt new technologies and enhance their capabilities to be agile and resilient in these testing times. Technology that supports real-time decision making and scenario-based forecasting are now vital for financial teams, to timely identify, rectify, and apply the right strategy. As revenues are receding and OpEx are increasing, effective operational measures for the workforce, customers and all other stakeholders of the business can only be achieved, through the inclusion of effective planning which depicts all internal and external factors for the future.
All revenue streams need to be realigned, with the new global scenario and financial management needs to be equipped with advanced methods for instant access and modifications for financial planning, forecasting, cash flow management, return-on-investment modelling, etc.
Effective team management, scenario forecasting and timely implementation of decisions are essential for survival in the current times and it can only be achieved if intelligent data gathering and its management along with effective communication across the organisation are ensured. The reliance on technology and critical thinking are key components here.
We can achieve this by effective response instead of a panic reaction towards the challenges faced by the companies. Immediate analysis of situation informed decision making, and quick implementation of strategies can significantly reduce the risk of failure of businesses. Efficient observation of internal and external trends and the right intervention to control impact can further reduce the impact of the probable risk faced by many companies.
While dealing with the crisis, companies need to be equipped with backup and disaster recovery plans and effective and efficient crisis management systems respond to the new market dynamics. The challenge here is to re-evaluate and create an environment for a new business landscape considering this pandemic as a ‘New Normal’ era for the businesses. Reassessment of options and alignment of the workforce according to their potential is essential for the new system.
Based on these methods organisations, can develop a long-term recovery strategy which is synchronized with the new normal. This can be achieved with the implementation of new modules which assess, plan, and predict new financial scenarios.
The outcomes now rest with how we respond to these global trends based on our new and modified goals. Before formulating any strategy for organisations, we need to analyse and decide on:
- How the services and products will be delivered?
- How Human Resources will be managed?
- How the data analysis and gathering will be made in real-time?
- What will be the recovery plan and timeline to achieve such recovery?
Our strategy for the times to come will define our growth and momentum for the future. Several case studies can be presented as a success story in this situation. Retailers are shifting from conventional selling methods by transforming their business online and focusing on a visible online business. Restaurants have now focused more on innovation in their recipes, delivery, and packaging rather than on the locality and ambience.
Indeed, such a shift of services for restaurants requires some insights and forecasts to switch accordingly. But not all businesses can easily adapt to this technique, many of them are complex and require scenario-based forecasting. Some are required to even initiate some “what if” scenario plans of more than one, two, or even three situations.
Team Effort
To execute such a critical project, it is pertinent to build a team of the right people who can work in harmony. Key employees from every department (HR, Marketing, Finance, and Supply Chain, etc.) should be briefed and made responsible for the execution of an effective scenario-based forecasting process and its forecasting. They should be empowered to implement and delegate according to their analysis.
Effective Risk Assessment
To ensure all risks are mitigated, multiple scenarios need to be identified with numerous plans of action. Different timelines with unique challenges need to be implemented at every stage with honesty, to identify the strengths and weaknesses. Enough numbers of scenarios to be presented that employees do not choose just a specific one or the popular one so that the chances of failure could be identified with clarity.
Effective Monitoring
Develop customised scenarios with a focus on the drivers important for your business. Include signs on every possible change which might lead to success or failure. Real-time monitoring of every step, preparation for external factors such as lockdown or protests will also help in understanding the progress.
By understanding the potential threats, a flexible and adaptable strategy can be developed with a team whose strengths and capabilities can be pre-determined through this exercise. For more information on scenario-based forecasting and how to get more out of your financial data then please call Axiom EPM today on 01932 548 465 or email us at hello@verostone.com