5 minute read 30 Apr. 2021
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How to build resiliency into operations and steer clear of disruptions

By Brian Moore

EY Americas Tech Transformation and Trusted Intelligence Leader

Energized by client success. Mentor. Father to two children. Sales leader with an innovative and creative mindset. Avid runner.

5 minute read 30 Apr. 2021
Related topics Digital Consulting

Instead of reacting to market disruptions, today’s operations leaders are establishing systems to avoid the next crisis.

Three questions to ask
  • Are you using real-time information to help your business act with agility when disruption occurs?
  • Are you stress-testing the important functions of your business?
  • Do you have the right technologies in place to see your business end-to-end?

After a year of disruptions, there is one thing business leaders can depend on. Disruption is here to stay. That means preparing for the next unplanned event is the next imperative for the C-suite.

With strong economic growth forecast, corporations cannot afford to slow down. As businesses are embracing the reality of change and getting ready to face the unknowns, now is a good time to assess a company’s operational resilience and create an early warning system before the next trigger event. This is the focus of the recent EY webcast “How to create an early warning system for operational resilience,” the second in a series of webcasts about unlocking business visibility for real-time insights.

Enterprise visibility allows flexibility

Operational resiliency is about more than just executing a recovery plan following a disruption. Leaders need the foresight to react to what’s coming down the pike before it disrupts the business, dings their reputation and damages the customer experience. “We can all relate to getting those 03:00 a.m. calls from the CEO,” says webcast panelist Steve Yon, EY Global Executive Leader. “The real question is, do you want to take that call from the CEO, or be proactive and make that call because you have the systems and alerts in place to monitor disruption?”

Having a robust continuity plan that is consistently looked at and stress-tested really determined the winners and losers in this past year.

“Having a robust continuity plan that is consistently looked at and stress-tested really determined the winners and losers in this past year,” says Brian Moore, EY Americas Technology Transformation and Trusted Intelligence Leader. This sentiment was echoed by the external webcast participants when asked which area of operational resilience they plan to tackle first. The most popular response was business continuity testing.

Which are of operational resilience do you plan on track

To create resiliency, corporations must have visibility throughout their own systems and into their customer networks. Using real-time information allows operations leaders to be more flexible and to respond faster.

Technology allows companies to look across the supply chain ecosystem further than ever before. While some clients invest time in vetting their Tier 1 suppliers, many have not investigated lower-level suppliers or their suppliers’ suppliers or considered how they would be affected by a global catastrophe, weather emergency, massive data breach, political turmoil or other disruptions.

Separate the signal from the noise

A well-designed business continuity plan allows a company to pivot away from a disruptive event and implement change as needed, shifting where people work, where goods are manufactured or how to serve customers. Other business continuity activities, such as preventative maintenance, help companies to reduce or eliminate unplanned downtime.

New and emerging technologies like predictive analytics, machine learning, blockchain, internet of things connectivity and sensors, supply chain digital twins and control towers enable this type of operational resilience. The combination of technology and data coming together gives executives the ability to understand implications across an entire business unit or function and act quickly to mitigate potential risks. When polled, a majority of webcast respondents said they are primarily focused on implementing predictive analytics and machine learning to improve their operational resilience.

Which technologies are you primarily counting on for improved operational resilience

But with so much data generated across the enterprise, it can be hard to separate a warning signal from the noise, and too much governance can inhibit a company’s ability to move quickly. This is why it is important to define the data that is most important to running the business, said Regenia Sanders, EY Americas and US Central Region Supply Chain and Operations Leader. “We have to state what is the problem we are trying to solve, and what data will give us insights to be able to solve those problems.”

To answer that, one approach is to set up a center for data analytics with people who determine controls and thresholds, and examine data to provide actionable insights. During conversations to design these systems, executive teams can learn how to integrate and leverage data, which will allow for automation and further efficiencies that can give them an advantage over less nimble competitors.

Create buy-in from within and outside

We take it for granted that implementing new technology will automatically solve our problems. The key is empowering the people at the center of the change.
Regenia Sanders
EY Americas and US Central Region Supply Chain and Operations Leader

Organizational change management is at the core of the adoption of any new system. Technology and assets are only useful if people use them well. “We take it for granted that implementing new technology will automatically solve our problems,” Sanders says. “The real key is empowering people at the center of changes we want to make.” Employees want to see how their jobs will change as a result of implementing systems designed to improve operational resilience and new skills they may need to develop. It also helps when employees gain an understanding into how their project connects across internal operations and the business value it will ultimately drive.

Business continuity planning is an exercise that few executives enjoy. However, when major disruption to the business occurs, organizations that have a plan in place to manage enterprise vulnerabilities can usually outmaneuver competitors. That’s why it is critical to have written guidelines and clearly set roles and responsibilities for business continuity, and the ability to stand up command centers for emergency operations when disaster strikes. When asked which area of operational resilience was the main focus for webcast participants, the majority answers were financials (e.g., supplier risk, compliance) and people (e.g., wellbeing, culture).

Which area of operational resilience are you primarily focused on today

Making people part of the process builds trust. Consider asking your employees, “What are the changes that would make your job easier? What would you like additional visibility into? What additional data do you need?”

The concept of trust becomes even more important when working with external teams, such as suppliers and vendors, who may hesitate to share data that they consider proprietary. Gathering data in a standardized and timely format aids decision-making, but this requires strong supplier relationships and ongoing conversations so that external stakeholders and corporate management have a shared understanding of the value that can be created through increased collaboration.

These principles apply to big and small businesses, because everyone can be affected by disruption. Boards, company leadership, employees and suppliers are all in this together. Disruption is the new normal, but you can be ready, and your operations can effectively respond when – and sometimes before disaster strikes.

Summary

We won’t know where the next business disruption is coming from or when it’s going to hit. But corporations can stay ready — and even get ahead — by setting up systems that prioritize their core business functions and identify data outliers that could spell trouble. Scenario analysis, stress-testing and stakeholder communications are areas that executives can begin strengthening now to be prepared for whatever comes next.

About this article

By Brian Moore

EY Americas Tech Transformation and Trusted Intelligence Leader

Energized by client success. Mentor. Father to two children. Sales leader with an innovative and creative mindset. Avid runner.

Related topics Digital Consulting