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Seven Early Observations on Business Operations in the “Brave New World” of COVID-19

4/8/20 9:28 AM / by Eric Liebross

Eric Liebross

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The world is changing right in front of our eyes, and every aspect of our lives is going to be touched in one way or another by the COVID-19 crisis.

How we manage our business operations is certainly no exception, and even in the relatively early stages of this ongoing situation, certain things are coming into focus. I’d like to share a few “early observations” of the impact of COVID-19 on business operations:

1. “People Dependency” is no longer something a business can afford

 

Every organization has them; the people who have been there forever, and have unique knowledge of specific processes or systems (or both), with that knowledge located within the heads of the individuals performing the tasks. If COVID-19 has proven anything it’s that “people dependency” is a luxury that a business can no longer afford.

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Those people that you are dependent on may not be available when you need them. This is not exactly an “Aha!” moment, but organizations have lived with this situation for far too long, whether because of operational inertia, or a tolerance of these individuals’ “uniqueness” or unwillingness to share their knowledge. This has to change.

Operating silos can no longer exist. Roles must be redefined, processes standardized and where possible, automated, and people must be cross-trained across multiple activities to step in as needed. The more flexible and digitally mature an organization is, the easier they will be able to adapt to new operating requirements, such as broad-scale work-from-home.

 

2 . Manual processes are another operational “luxury” that must now be limited through standardization and automation

 

Very closely aligned with the “people dependency” scenario, having a large number of manual processes can limit your flexibility in transitioning to a work-from-home (“WFH”) operating model. How many organizations still move paper around their office, whether it’s to get an approval on a vendor invoice, or to update a customer bill, or even to still sign checks? From my experience, there are far more of these things still happening (and not just in smaller organizations) than people may realize (or are willing to admit). In the world of WFH, these practices cannot continue.

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Additionally, companies that take more time processing basic transactions due the wide range of exceptions that are in place, adds unnecessary complexity to the operation. This will also limit the ability to quickly and effectively move to a WFH business continuity scenario. While “one size does not have to fit all”, good customer services does not have to mean adapting your processes to every customers’ wishes (or demands). Remember, flexibility and agility is the order of the day, and that applies to customer service as well.

There is a lot of technology available in the market to reduce or eliminate manual processes, such as robotics process automation, automated reconciliations, financial closing management workflow, intelligent data capture, AP automation, customer and supplier portals, etc. Companies that have taken the lead in implementing these technologies have been the ones that have been able to adapt to this new operating model more effectively. The time has come for every organization to move to limit (or eliminate) their manual, non-standardized processes.

 

3. The ability to be agile, flexible and scalable is paramount

 

Too often, business operations are like the Titanic, desperately trying to maneuver to avoid that iceberg. For some, COVID-19 is the iceberg that has gashed a huge hole in the hull of their business; life rafts are in the water, and there aren’t enough to go-around.

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Even before the current situation with the virus, businesses have been recognizing the need for more operational agility and flexibility. The ability to rapidly adjust to changing business demands, and provide more focus on forward-looking business insights has been a foundational part of the digital transformation of business operations. But now, the need to shift resources from transactional work to higher value activities, has never been clearer.  

Organizations need to have the ability to move the focus of their team as business demands arise. Standardizing and automating transactional activities to free up people from mundane tasks allows for more operational flexibility and agility. This, combined with being able to ramp a team up and down, as needed, ensures that the cost of business operations remains aligned with revenue.

 

4. Increasing operational visibility and transparency is needed to improve focus on performance and productivity

 

If you ask many departments about their operational performance and related volumetric data, you will most likely get a “shoulder shrug” and some comments about needing to make that information more available. Once again, this is a situation that many organizations have historically lived with, and it hasn’t had a huge impact on daily operations. Until now.

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With business requirements rapidly changing due to dynamic and uncertain revenue streams, and resources scattered and potentially missing in action, having real-time analytics and clear visibility to changes in internal or external operations (higher or lower than expected transaction volumes, supply chain or customer service issues, business closings or hours reduced, etc.) need to be identified and responded to rapidly. The ability to quickly shift operational focus and resources to address problem areas has become critical.

In the WFH operating model, a new, more formal management paradigm also needs to take hold, with more structured communication across teams (daily standups, etc.), more granular and targeted operating metrics (down to the processor level, for example, to monitor individuals’ performance), and easy-to-digest reporting.

Increasing your operational visibility and transparency, providing real-time access and analytics to sales and operational data, and having the agility to respond to changes “on the fly” is an important part of the “brave new world” of business operations.

 

5. Being ahead of your business’ financial curve is closely aligned with (and almost as important as) “bending the virus curve”

 

Throughout the Coronavirus crisis, we have repeatedly heard about the importance of “bending the curve”, in order to reduce the rate of infections that are occurring. But there is another curve that needs to be closely monitored during this situation, the financial curve.  

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Businesses need to realistically and accurately assess the impact of the quarantine and social distancing guidelines on their revenue streams, and be in front of the changes that are coming.  Unless it’s already been mandated by the government, when to close your business or reduce your operating hours, when to re-open and with which services, and how to manage employees (who to retain, who to reduce, who to furlough, etc.) are important decisions that businesses need to make.

Incurring too much cost when revenues drop dramatically can kill a business. But so can drastically reducing staff when the business demands are still there, not to mention the impact these decisions have on the individuals who work for you. Scrambling to get back up and running when the customers start to return can create additional challenges. Deciding how to handle suppliers (who to pay now, who to defer, who to re-negotiate with, etc.) can also have longer term impacts on your operations, once you come out of this cycle.

These decisions must be made with clear, accurate data models in hand, and businesses are more dependent now, than ever before, on having good data and analytics available, to provide accurate business insights and guidance. The digital transformation of your business can wait no longer.

 

6. Those dusty old “Business Continuity Plans” that have not been tested are now being put to the test

 

Many organizations took false comfort in the idea that they had a business continuity plan (“BCP”) that defined all the activities the company would need to take in the event of a disaster that would impact their business operations. Then came COVID-19.

Most BCP’s contemplate a localized disaster that impacts a specific area or operation, and emphasized operational redundancy and transportability. Very few organizations planned for a global pandemic that potentially could shut down the entire world. Well, here we are.

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The ability to implement a broad-scale WFH program has many moving parts that need to be aligned for the program to work. The existing business infrastructure needs to have all of the elements readily available for employees to move from a centralized location (the corporate office) to a distributed, WFH scenario. This includes laptops or similar remote computing devices, secured communications and connectivity (i.e., VPN, virtual desktops, etc.), collaboration (i.e., Zoom, Teams, Slack, etc.) and knowledge management tools (i.e., intelligent data capture, workflow and shared document repositories, etc.) to enable large, dispersed teams to work together effectively.

And that’s on the “corporate” side. It also requires that the employees’ local technology and operational infrastructure can support this requirement. Broadband connectivity (30MB minimum), webcam, headphones, sufficient workspace and privacy, etc.) are necessary for a WFH program to allow you to “work from home.”

This has recently been proven to be an issue, not just for employees here in the US, but it is having a significant impact on the offshore operating model that many large organizations have become dependent upon, whether it is with a partner (outsourced) or captive (offshore shared services). Specifically, India and the Philippines where the strength of the overall infrastructure outside the large corporate parks is questionable. Understanding the true capabilities of your offshore business partner from a broader, in-country telecommunications and power infrastructure is a new question that now needs to be asked.  

Clearly, very few BCP’s truly planned for this broad of an event, and we are seeing the impact in terms of operational issues/delays and even business disruption that goes beyond the direct impact of COVID-19 on the workforce.

 

7. Broad scale work-from-home operating models may become the “new normal”

 

The implications of the novel Coronavirus on business operations are far-reaching. Will the virus subside and then reappear? Will a different virus come at another time? One thing that is clear is that businesses can no longer put their “heads in the sand” and hope that this will not happen again. Being prepared for a future event will be as important as getting through this one, and the lessons learned from this event must inform our planning for the future.

"Businesses can no longer put their “heads in the sand” and hope that this will not happen again."
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Do businesses reduce their investment in centralized operations and instead go with a decentralized operating model? Do you even need to have large groups of people working together in one or several locations, or do you develop robust remote workforce collaboration capabilities? And what about the local telecom and technology infrastructure challenges? How do we ensure that people can work effectively remotely for extended periods of time? And how do you manage the security around this type of operating model?

These are all key questions that will need to be answered as a by-product of COVID-19. But some key considerations for successfully operating in a Work-From-Home model include:

  • Ensure that you have adequate (and easily portable) Digital Workspace Infrastructure. Laptops and personal devices are no longer “toys” that only the privileged executives get to have. Broadband connectivity at home is not just for streaming Netflix anymore. Having a “home office” is no longer just for a tax deduction. Make sure that secure, remote connectivity (VPN, etc.) with pre-configured access to key systems and data is ready to go. Ensure that employees have adequate home workspace that provides the needed access, privacy, and security. And ensure that your IT Help Desk has the bandwidth and tools to manage a larger volume of calls when a remote workforce ramps up.  

  • Clean up your business operations in advance of any broad scale WFH operation. Automate and standardize your processes to reduce or eliminate manual activities and high levels of exception handling. And provide good, real-time visibility into operational activities and details to help manage a remote workforce.

  • Implement strong collaboration and knowledge management tools to enable a dispersed workforce to work together. The technologies are available to support a remote operation, and having people knowledgeable of the tools and how to use them will accelerate and maximize the benefits of this transition, and make it seamless. Focusing on Security Awareness and Training for remote employees is no longer a checklist item for your auditors. Employees must be taught to operate remotely with as much care and protection as possible.

  • Rethink your management approach, relying less on proximity to people and individual performance, and more on processes, tools and teamwork. Communication is key. It just doesn’t have to involve calling out to someone across the cubicles.

The “Brave New World” of business operations has arrived, and while we are still in the middle of the crisis, it’s not too early to start learning from it.

Eric Liebross

Written by

Eric Liebross

Eric Liebross leads Auxis’ Back Office Optimization practice, helping organizations design and implement innovative operating models, processes and technologies to achieve optimal performance within Finance, Customer Service and HR Operations. Eric’s areas of expertise include Shared Services Strategy, Nearshore Outsourcing and RPA.