Businesses planning operational changes

MANAMA: Companies around the world are making significant operational changes to become more resilient after many found their contingency plans weren’t robust enough to cope with the Covid-19 pandemic.

HSBC Commercial Banking’s new Navigator report, Building Back Better, draws from a survey of over 2,600 companies in 14 countries and territories.

It shows that many firms neglected contingency planning in key operational areas such as technology, finance and sustainability prior to the crisis, with nearly half (47 per cent) saying they could have done more to prepare for the challenges of recent months.

For some, the shift to remote working exposed weaknesses in their continuity preparations, with fewer than three in five (57pc) saying they prioritised investment in technology to improve operational efficiency over the last two years.

The availability of cash flow was also a challenge, with only 43pc having prioritised steps to strengthen their financial position.

The crisis has forced many businesses to adapt, with almost two thirds (63pc) having made changes to their operations already.

AGILE

Almost half (44pc) will change their products and services further, either by diversifying (33pc) or by reducing their offering to become more specialised (17pc).

Over the longer term, business plans now call for more agile staffing and office arrangements together with a greater focus on technology and sustainability.

Another key finding is diminishing real estate occupation, with 38pc rethinking their physical footprint of office and production locations, and 29pc expecting to reduce their office space.

Businesses are also keenly looking at more flexible working arrangements.

Over two thirds (69pc) believe flexible working will become standard practice, as a third (34pc) expect to cut their air travel.

Moving ahead, the role of technology will be critical.

SUSTAINABILITY

Six in 10 (61pc) think virtual collaboration will become standard practice over the next two years, with 57pc saying that virtual meetings – internal and external – are here to stay even after lockdown measures are cancelled.

The report has also flagged sustainability powering the recovery.

More than nine in 10 (91pc) aim to ‘build back better’ by re-engineering their businesses to be more sustainable, while nearly a third (27pc) intend to make their supply chains more environmentally sustainable over the next two years.

HSBC Global Commercial Banking chief executive Barry O’Byrne said, “Businesses aren’t waiting to be told how to ‘build back better,’ they’re starting now. The human tragedy and huge economic damage caused by Covid-19 have accelerated transformation plans and have brought relationship inter-dependencies to the forefront of leaders’ thinking. Since history shows that businesses are more likely to fail coming out of a downturn than when they’re in one, it’s vital that leaders push ahead with efforts to make their enterprises more agile and more resilient.”

avinash@gdn.com.bh

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