3 ways to prepare for reopening businessesManagement accountants can benefit from strategy and business model tools, as surveys confirm companies’ quest to serve customers in novel ways.
An early May survey of German CFOs and management accountants revealed that 60% were still unable to say when they expected the situation within their company to return to normal.
The survey — by WHU-Otto Beisheim School of Management together with the International Association of Controllers (ICV) — also showed that amid this uncertainty two-thirds of companies regard the coronavirus crisis as an opportunity, up from around a half when surveyed in March.
To allow companies to move from a position of massively decreased consumer demand in some sectors into a new future where they can thrive again requires careful planning, scenario analyses, and sometimes a rethinking of their business model.
Ian Selby, Ph.D., vice-president–Global Research and Development, Management Accounting, at the Association of International Certified Professional Accountants, told FM: “Every business is going to be in a different position. … Have they taken support loans? Have they taken advantage of the government schemes such as deferring VAT? How many workers have they furloughed? What’s their cash position?”
But they face common problems, he said. Management accountants “caught in this maelstrom of managing the day to day” could benefit from the opportunity to step back and consider questions and checklists to take their businesses into recovery.
A three-part toolkit
The Association has grouped together three tools — Business Resilience: Tools for Preparing to Reopen Businesses — that have been reworked and adapted for the current crisis. They are the CGMA Horizon Scanner, the CIMA Strategic Scorecard, and the CGMA Business Model Framework.
“If you are trying to get your business back on track, it’s going to all be about suppliers, customers, and processes, and … technology,” Selby said.
“The Horizon Scanner is there to [help you] look at that horizon and think about the future through the different stakeholders in your business — the relationships that underpin your business.”
He added: “We’re in a lockdown ecosystem. [The CIMA Strategic Scorecard] is there to enable you to think about that — what’s your strategic position? And build out from that what are the best options that you could take …. to build out of lockdown, to return to normality, and to grow.”
The elements of the scorecard are rooted in management accounting practice — drawn from a survey on a case study from the current coronavirus situation, Selby said.
US CFOs polled in PWC’s pulse survey released in mid-May say they’re finding ways in which the current pandemic will improve their business in the future. A total of 47% of CFOs identified leaner operations as a long-term benefit, and 44% of CFOs said they had identified new ways to serve customers.
The CGMA Business Model Framework consists of questions under the four headings of define, create, deliver, and capture value. The early results from those responding to an indicative poll in the Association toolkit revealed that nearly nine out of ten believe the coronavirus outbreak has changed their business or operating model. A total of 89% of poll respondents said they understood their business model well enough to help their organisation out of the pandemic — but 30% said they aren’t involved in that conversation.
PWC’s April UK Consumer Sentiment Survey suggested that the coronavirus is accelerating the move towards greater online buying, with 18% of consumers saying they will buy more things online after lockdown ends. Also, it’s possible that the local high street, ie, shops located in a city or town and serving a local community, could receive a post-coronavirus boost, with 22% of UK consumers saying they will increase their spending in this way after lockdown.
For businesses moving to serve customers online, Selby said it was important to have the right infrastructure and capacity. “You need to make sure you have the systems in place to take the orders and process the orders,” he said.
The Association plans to release more tools to support management accountants leading the recovery. “As every week the environment changes, governments around the world change policies and public health regulations, so the people running a business have to be adaptable,” Selby said.
Explore the toolkit
For more news and reporting on the coronavirus and how management accountants can handle challenges related to the pandemic, visit FM’s coronavirus resources page.
— Oliver Rowe (Oliver.Rowe@aicpa-cima.com) is an FM magazine senior editor.