COVID-19: 3 ways to steer through the crisis

Across the world finance professionals are at the centre of work to stabilise businesses and prepare them for the future beyond lockdown.

Businesses are looking to manage costs and customer debt, but the crisis has also been an opportunity to rethink fundamentally how they operate and to examine how to transform to survive and thrive after the heat of the crisis has dissipated.

In Southeast Asia, Australia, and New Zealand, government and central bank support for stressed businesses varies from country to country. The Singapore government has stepped in to prop up its badly affected tourism industry, and the Australian government’s tax authority, which itself has gone through major transformation, has operated at speed to deliver support to businesses. The same has happened in New Zealand.

Members of the Association of International Certified Professional Accountants’ regional advisory panels in Southeast Asia and Australia and New Zealand shared their concerns and insights on these and other topics.

Three themes emerged:

Digital resilience

Cybersecurity and digital resilience were a focal point of the Southeast Asia discussion. These were concerns for any business operating in the pre-coronavirus era, and they have now become more critical. Businesses have concerns about laptop and other computer security, including corporate virtual private networks. One business leader highlighted how many companies that rely on email and phone to market their products then have problems supplying the goods through their warehouses. These distribution points are not necessarily connected to the company’s enterprise resource planning system but instead rely on spreadsheets. With many employees working remotely, companies will also need to manage BYOD (bring-your-own-device) risks and ensure their policies are robust.

Business model pivots

Companies whose operations have been compromised by the lockdown measures are taking a strategic look at their business model. One panel member described how the New Zealand small business sector is responding. The country’s agile economy is based around small and medium-size enterprises (SMEs), many employing ten or fewer staff. These businesses are adapting to the new situation that the coronavirus has caused and are pivoting — they are shifting into other areas very quickly. Tourism and therefore the car rental sector have taken big hits during the crisis, but the rental companies are now providing a goods delivery service for online businesses that are rapidly growing but don’t have the necessary logistics in place.

Digital transformation

The coronavirus has speeded up digital expansion both within a business and for its network of smaller partners, including wholesalers. It’s important for companies to “educate” their networks and then lead or partner with them as they emerge from the crisis. In addition to considering what systems and processes they need to maintain basic operations during this current slow period, some companies are planning for how to sell more goods and services to their customers after the next three to four months.

China’s huge role in much of the pre-coronavirus supply chain has caused some businesses to look more closely at supply chain risk and diversification.

Companies are also considering greater collaboration with other businesses through outsourcing — they also realise the need to embrace data science and analytics.

Universities are looking at innovative ways to maintain and expand their online presences with the current physical restrictions in place. Australian universities, which have previously had high numbers of foreign students, will need to examine how they operate as the world emerges slowly from lockdown periods.

One global biopharma company in Asia is focusing on its employees first but, importantly, ensuring that the supply of medicines is reaching customers who have underlying health conditions and are at greater threat from COVID-19. Ensuring supply is about in-country logistics but also managing global sites. This company, which has a vital role in this crisis, is taking a critical look at its traditional business and ways of working. Many others are doing the same.

— Andrew Harding, FCMA, CGMA, is chief executive–Management Accounting, and Venkkat Ramanan, FCMA, CGMA, is regional vice-president–Asia Pacific, both at the Association of International Certified Professional Accountants. To comment on this article or to suggest an idea for another article, contact Oliver Rowe, an FM magazine senior editor, at Oliver.Rowe@aicpa-cima.com.