Covid-19: the catalyst to safeguarding long-term business resilience

When balancing the continued volatility of today’s business landscape with the continued commitment to plan and build for the future, how do businesses achieve a steady-state of resiliency after COVID-19?

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This is a contributed article by Dave Jordan, Vice President & Global Head, Consulting & Services Integration at Tata Consultancy Services.

Covid-19 continues to show companies the need to balance resiliency with efficiency. Finding this equilibrium is essential if an organisation wants to build a stronger future, better assess business risks, and determine the most critical pathway forward to minimise these risks.

In the wake of Brexit, companies started to realise the importance of contingency planning and having safety stocks. When the prospect of a no-deal Brexit became more apparent in late 2018 and during 2019, organisations began to sit up and pay attention, especially those that were reliant on hundreds of lorries a day to continue operating. With the threat of additional delays on either side of the Channel, organisations could not guarantee a just-in-time delivery process and needed to build in extra safeguards to assure their supply lines weren’t about to dry up. Although due to Brexit uncertainty, the UK is slightly more conservative with their just-in-time systems, companies have warned of extensive strains on their supply chain during the ongoing global pandemic.

Covid-19 has been a catalyst to adopt a better balance between efficiency and resiliency, especially related to areas where business risk can derail business operations. To build in long-term resilience, however, takes planning, time and money and should involve the whole c-suite, not just the CIO.

What does it mean to be resilient?

A popular analogy among analysts is that fighting the business impact of coronavirus is like fighting a war. When Winston Churchill faced the prospect of manufacturing the Spitfire during World War Two, rather than construct the plane in one location, which was susceptible to coordinated bombing, Churchill disseminated the manufacturing and assembly of the fighter planes across to the United Kingdom in such a way as to eliminate any single critical vulnerability. Although less efficient in terms of construction, it ensured the UK was in a position to win the Battle of Britain and ultimately start the process of ending the war.

Just as resilience was essential in the 1940s, it continues to be a strategy that is critical to a company’s survival. To determine where to focus and invest requires first prioritising various risks and then modelling how to address these risks using digital twins.

Building resilience and utilising digital twins

To calculate the risks a company faces, from disasters to external disruptions, requires creating a matrix to perform risk analysis and stratification. Such a matrix is not only helpful in starting to build resilience, it can also be a critical tool in helping to form consensus in the C-suite about what areas need the most support and investment.

Digital twin modelling is uniquely suited to scenario planning. Whether it’s a customer relationship management system, a supply chain, or a physical product, digital twins can be illustrative, revealing particular strengths given optimistic assessments as well as revealing weaknesses — even failure — given more pessimistic forecasts. Changing different elements within digital twin models also helps pinpoint precisely where the most effective investments should be made.

Digital twins can also show how particular capital expenditures can produce future revenues. A global materials company, for example, used such modeling to create a machine-first approach to the automation of its shop floor. During the Covid-19 pandemic, the company was able to ramp up capacity, generating over 8,500kgs of material needed for personal protective equipment in order to meet the sudden demand.

Digital twins can also be essential to getting agreement in the C-suite. It may be difficult to get every function to agree to the probability of specific threats but modeling those threats can make the sensitivity of particular situations vividly clear. Such highly sensitive scenarios then become areas where there can be consensus about sacrificing some profit in favor of protection and resiliency.

Thanks to the propensity of cloud services, digital twins are no longer only reserved for cash-rich organisations who can build them in house. Yes, while in some cases, moving to the cloud may increase cost, over time it will reduce risk and make services more adaptable and scalable.

Resilience means people, too

Employee changes are having a resounding effect on risk matrices and scenario planning, as well, not the least of which is the fact that we will have a more untethered workforce in the future. That presents new challenges for IT support and infrastructure. And it creates management challenges that require reinforcing the idea of purpose-driven innovation. So to maintain a cohesive corporate culture across a diaspora of employees means not forgetting to instill a sense of purpose to foster a true sense of resilience, not only in the infrastructure, but in the employees and talent that we rely on every day.

Dave Jordan is Vice President & Global Head, Consulting & Services Integration at Tata Consultancy Services (TCS). In this role, he leads a team focused on the strategic journey of leading enterprises as they transform and grow their businesses. Jordan partners with C-Suite leaders on business and technology strategies in areas such as M&A, supply chain, finance transformation and customer experience while driving agility across these enterprises.