Business risks that came along with COVID and how to deal with it. - GRM Institute

Business risks that came along with COVID and how to deal with it.

Here are a number of the key risks that organizations are facing because of the COVID-19 crisis:

 Risk 1: Disruption because of Social Distancing
Social distancing may be a term applied to certain actions that are taken by public health officials to prevent or curtail the spread of a high contagion. During the high contagion months from December 2020 through March 2021 policies of “social distancing” are likely to be necessary within the workplaces and schools. Most business events and travel are curtailed or canceled during this peak period. How will your organization try to generate revenue and execute operations with workplaces mostly either off-line or remote? In 2019, only an estimated 14.1% of all retail sales worldwide were done through the web. With physical purchasing cycles potentially being disrupted, what is going to happen thereto remaining 85.9% of business activity?

Risk 2: Plummeting Employee Productivity
Every industry is going to be impacted, as organizations are likely to work out. Some 40% of staff during this era were also unable to work because of sickness, either directly or indirectly. Even if the employees are healthy, many are going to be tormented by the necessity to worry for ill family members.

Risk 3: Stressed Supply Chains
The global economy remains highly integrated and most countries and corporations depend upon vendors for his or her business. From pharmaceutical raw materials to electronics to most consumer-good products, there’ll likely be purchasing delays. Heavy equipment and manufacturing supply chains are already being impacted by COVID-19 spreading across Asia and Europe.

Risk 4: Recession, Unemployment and Investment Pull-back
Forecasts indicate that we are going to likely be in a very full recession by the fourth quarter of this year. Will consumers reduce their spending? Conferences are being canceled, corporations are asking people to figure out everything from home, schools are asking students to not return after the break, the economic engine of growth is driven by continuous investment. Experts are uncertain whether a COVID-19 vaccine is going to be available before the primary quarter of 2021. Investments are highly negatively impacted by uncertainty and corporations are getting fewer investments. There are also significant layoffs at existing businesses within the “second wave” of COVID-19 that will surge again within the third quarter.

Risk 5: Economic Instability and Civil Unrest
The US will bear a serious election cycle in November. This election, more so than the other in recent history, represents two very different sets of policy options which will dramatically alter how businesses operate from taxation to foreign trade to talent management. The U.S. deficit is at a record high. Government spending will ramp-up, but which will not be effective because of a lack of design and preparedness. Great Britain has left the EU Union and is probably going to work out dramatic changes go in effect in December 2020 which are likely to trade, immigration, and an oversized range of other areas of international business, at the identical time the second wave of COVID-19 is also hitting.

So now what? Organizations must put in situ mitigation plans to handle each of those risks. By taking these steps they’re going to be in a much better position to scale back the risks that the coronavirus will wear their business.

MITIGATION STRATEGIES 

The mitigation activities that your business can prepare may be wide-ranging counting on your industry, geography, size, and other factors. These initiatives may include activities like shifting budgeting from fixed costs to variable spending to supply flexibility in times of uncertainty.

Below are the five risk management steps that organizations should give some thought to as they defend themselves against the pandemic.

Step 1:Readiness Assessments 
A readiness assessment can help when organizations don’t know what their business continuity program should comprise. Industry and role readiness templates additionally as pandemic-specific templates allow a corporation to gauge their business continuity program against a best practice standard and identify where gaps may exist. These readiness libraries break down standards and best practices into actionable pieces so organizations can track progress and adherence.

Step 2: Risk Management Plan
All organizations should complete a risk assessment on their core business processes to spot and prioritize any new risks or gaps in their existing controls for brand new scenarios like pandemics, recession, and geopolitical conditions risks. First-level managers on the front when prompted with risks are within the best position to be able to assess how these scenarios will impact their areas of responsibility.

Step 3: Business Impact Analysis
Not all risks within processes or functions within a company should be treated in an identical way. A business impact analysis allows organizations to spot which parts of the business are most important to its operations. Use the results to work out which parts of the organization to prioritize during a business continuity plan to take care of operations.

Step 4: Policy Management
As the pandemic evolves and new information arises, policies will  be revisited and updated and communicated. For instance, reviewing and revising a work-from-home policy is effective providing dissemination of that revised policy is formed with governance tracking for adoption across the organization.

Step 5: Incident Management
Incident management is usually a highly siloed activity embedded within a process. In times of change management, a unified enterprise-wide mechanism is required as an input to judge the effectiveness of mitigation and policy activities additionally to manage the exceptions, which are typically 20% of all activities.

By Shahran Sayyed (PGDRM Jan’20)

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