Traditional business models are under increasing pressure. The COVID-19 pandemic is wreaking havoc on businesses across the globe. There is widespread disruption to supply chains, government-mandated shutdowns and changing consumer behaviour. But the truth is many traditional business models were already feeling the pressures of a shifting working world:
- Cost reduction is a priority, as management teams seek to leverage new technologies and improve efficiency metrics
- Key functions must do more with less – non-core but board-critical functions such as tax, compliance, risk and finance are expected to increase effectiveness without any additional resources
- Managing regulatory obligations is more complex and costly, as rules change faster and faster across multiple jurisdictions and regulators demand greater transparency
- Board demands are on the rise, with tougher expectations around return on investment and performance
- Keeping ahead of competitors is harder than ever, requiring deeper industry insights, digital tools and data analytics – as well as the specialized talent to run them
Counting the true cost of the crisis
To reimagine effectively, businesses must first assess the damage of COVID-19, which means looking beyond just the numbers.
Of course, the immediate and ongoing focus for all was the health and safety of their people. Beyond that though, for many companies, the real cost was one of missed opportunity. At the peak of the crisis, their best and brightest were required to spend most of their time ensuring the business’ plumbing continued to work so that critical functions kept operating and information was valid, credible and timely. This prevented them having time to focus on key strategic decisions that may have helped better navigate the virus’s impact on the business and position for recovery – such as flexing operations, pivoting to offer more relevant products and services or reconsidering capital positions.
Others saw that COVID-19 laid bare the inadequacies of current technology solutions driven by years of postponing investment and multiple manual workarounds. Legacy systems were often simply unable to support remote working, meet customers’ needs to transact online or address growing regulatory demands for transparency and digital reporting.