The COVID-19 pandemic is the source of severe economic concerns for businesses, communities, and consumers all around the world. The following guide talks about various things that US business leaders should keep in mind and also covers different aspects of crisis management, workforce, supply chain, financial reporting, and tax and trade. While many companies are already coming up with their business utility plans, some are still not aware of what to do. Usually, companies have contingency plans for events like cyber incidents, power outages, and natural disasters, so that their operations don't get affected - things like Business Communication and Connectivity Services. But COVID-19 is a different situation altogether. Contingency plans don't consider events like widespread quarantines, multiple travel restrictions, and extended school closures due to a global health emergency. Economic experts are pointing out various challenges that companies are facing in this crisis. Finance leaders from Mexico and the United States shared their concerns in the inaugural COVID-19 CFO Pulse Survey of PwC.
Crisis Management and ResponseDifferent issues that the technology industry may face:
- Like contingency plans, business continuity planning also doesn't cover the ramifications of a pandemic. This automatically leads to several event cancellations.
- Event cancellations lead to fewer business development opportunities. With fewer business opportunities, client interactions also reduce significantly.
WorkforceDifferent issues that the technology industry may face:
- Apart from business continuity planning, staffing is another area where companies are facing grave concerns. Both full-time employees and part-time workers like delivery and retail staff and drivers are losing their jobs.
- The economic crisis is slowing down the recruiting process, meaning it would affect the future pipeline of tons of skilled workers.
- Additionally, experts feel that cyber threats would increase because more people are now working from home.
Operations and Supply ChainDifferent issues that the technology industry may face:
- Disruption in the global supply chain slows down production.
- Many undercapitalised companies will have to rely on subsidies or alternative sourcing of capital to meet their cash-flow challenges. This would prove whether they are ready to conduct business after the pandemic is over.
- Companies are now looking for different business solutions that would address several issues like social distancing, work from home facility, and in-store alternatives. But retaining talented employees still stands out as the need of the hour.
- The smartphone industry, with all its popularity, will also go through troubled times because of its labour-intensive supply chain. Industry experts feel there would be a 12% YoY decline in 1Q20. On the other hand, server revenue will also go down by 16% YoY in 1Q20.
- Disinformation in digital platforms will increase rapidly.
- Sharing economy inventory would get affected.
- Component manufacturers relying on multiple suppliers would have to change their strategy.
- Containment zones around the world would affect shipping and delivery.
Financial ReportingDifferent issues that the technology industry may face:
- Some of the factors that would trigger financial reporting implications in both current and future reporting periods are operational and supply chain disruptions.
- Public companies may need to disclose their revised guidance due to the impact of COVID-19.
Tax and TradeDifferent issues that the technology industry may face:
- Workers will not have to get used to new state and local tax laws, now that they are working from home.
- States may cut some slack on tax compliance operations as work-from-home employees don't have timely access to information.
- Short-term losses would affect income statements.
- Supply chain reconfiguration would affect tax implications.
StrategyDifferent issues that the technology industry may face:
- Companies may look to cut their budgets to reduce discretionary spending.
- The tech industry would thrive as online education, social distancing, and remote work gain more importance.
- The economic crisis would have a significant impact on resilient business models, such as impacts on supply-chain, commercial-channel partners, and cash-flow forecasting.
- Company valuations would become crucial as cash-rich companies would want to acquire their long-set targets.