The coronavirus has affected businesses and consumers around the world, causing widespread economic hardship for people and companies. Here are some general guidelines for dealing with COVID-19: This is what business leaders should know regarding crisis management, tax and trade, workforce, supply chain, and financial reporting issues. Most of the companies that have prepared do have continuity plans, but these are likely inadequate to deal with an outbreak such as the coronavirus. The operational effectiveness of businesses during events like cyber incidents, natural disasters or even power outages can be helped because of these contingency plans. However, they do not take into account the widespread quarantines that may affect travel, lead to school closures, and affect global health in the way that it is happening now. These are unique challenges that this crisis has caused. According to the CFO Pulse Survey regarding COVID-19 produced by PwC, financial leaders in the US, and also Mexico, have top concerns which will now be presented.
Crisis Response and Management IdeasThe issues that the technology industry could possibly face right now:
- Continuity planning for businesses will not, or often does not, take into account what can happen during a pandemic.
- Industry cancellations of events, and other gatherings, can cause a depletion in business development opportunities.
- The diminished amount of travel can also prevent client interactions.
WorkforceThe issues related to the technology that we currently face:
- There can be substantial staffing concerns related to drivers, gig workers, full-time employees, retail staff, delivery companies, and anyone that works as a contractor for these businesses.
- This can slow down the entire recruiting process, leading to future pipeline problems regarding skilled workers.
- The cybersecurity risks can also be paramount because of people that are currently working from a remote location, and who may not own business mobiles.
Supply Chain and Business Operation ProblemsThese issues are going to be faced by the technology industry:
- Production will likely slow down and this can cause a supply chain disruption at a global level.
- Undercapitalised companies will face cash flow challenges that can lead to requiring alternative sourcing and subsidising in order to deal with the aftermath of this crisis.
- Companies that are going to seek business solutions, and also address remote working and social distancing issues, may need alternatives, leading to a demand for engineering talent and developers that can help with the problem. Retaining your top talent is going to be essential at this time.
- The smartphone industry can be impacted significantly because it relies heavily upon an intensive supply chain that uses labourers. It has been noted that a 12% YoY decline for the first quarter of 2020 for those in the smart phone industry, as well as a 16% decrease in the server revenue industry, have been affecting companies dramatically.
- The proliferation of disinformation can be very problematic on digital platforms.
- The sharing of inventory can cause the economy to take a hit.
- There are many component manufacturers that may need to rely upon more than one supplier to keep moving forward.
- There are going to be containment zones, worldwide, that can lead to bottlenecks for the shipping and delivery of these products.
Financial ReportingThe technology industry may also face issues such as:
- Supply chain disruptions, workforce problems, and operational issues that can lead to financial reporting problems now and in the future.
- Public companies are going to be forced to disclose revised guidelines related to the effects of this pandemic.
Tax and TradeThe technology industry may also suffer with the following issues:
- Local and new state tax implications can cause problems during this crisis.
- A tax compliance problem, such as those related to remote employees, can lead to a lack of timely information.
- Short-term changes to income statements, and short-term losses, are going to affect forecasts in a negative manner.
- The reconfiguration figures of the supply chain can also have tax implications.
StrategyPotential issues that the technology industry could face:
- Prolonged and often sudden economic problems that will lead to a downturn for companies, leading to budget cuts and a virtual elimination of any type of discretionary spending.
- Businesses that incorporate social distancing, online education, or simply have their employees work remotely, can see a demand for products and services that are delivered by the tech industry.
- More flexibility, and resiliency on the part of companies, underscores what is needed during this crisis, especially related to commercial channel partners, supply chain issues, and the availability of cash.
- The valuations of companies that offer these types of services may increase regarding cash rich companies that are typically sidelined, so these are businesses that you need to keep in mind.