Lessons organizations can use to ensure viability, continuity and resilience.
Our webinar, Navigating Business During Disruption—Source-to-Pay, explored how the Covid-19 pandemic, while still raging around the world, has already invariably altered how organizations approach their business continuity plans. Sometimes it takes a crisis to bring out the best in people, and as we’re learning from our customers and prospects, to galvanize senior leadership and their teams into taking the strategic initiative to make companies more agile and better prepared to weather these extreme events for the long term. Here are some takeaways from the webinar.
Business Disruption Lesson: Keep Your Contracts Close.
Right now, what our customers say is foremost on their minds is risk. When you think of risk, contracts can’t be far behind. Without a doubt, force majeure hasn’t been such an invoked clause before this pandemic took place. It’s shutting down a lot of deals, impacting a lot of contracts and wreaking havoc on supply chains.
This is where having a data-integrated contract management solution is critical — even a digital repository of some kind. Because suddenly legal, procurement, finance and the C-Suite need to know exactly what’s in all those customer and supplier contracts. What’s your risk exposure, what are your options, how quickly can you pivot on terms and obligations, what’s the room for negotiation? Do you even have visibility?
From a purely functional level, what capacity do people have to create, sign and execute contracts if everyone is working remotely? Depending on your industry the ability to do that may be highly regulated. Even contract management on-premise software solutions may add some flexibility in this regard, but what about e-signature capability, approval flows, attachments (not to mention certifications, validations and other 3rd-party risk verification)?
Contracts are one of every organization’s biggest assets — times like this are exactly when you want — and need — a complete inventory available.
Business Disruption Lesson: Volatility Demands Agility.
If there is a supply chain poster child that will always represent Covid-19, it’s toilet paper. Not sure what happened there, but it has brought home to everyone (literally) the vital role played by procurement and supply chains in the world economy.
Industries are recognizing the need to be very agile and adaptable, many to a greater extent than they’ve ever had to be. First and foremost in that, is people. Accommodating teams that need to work from home while dealing with families, their own technology setups, various levels of connectivity and a range of scheduling needs takes consummate agility.
On an individual level, people who used to travel a lot visiting facilities or customers, suppliers, other offices and the like now need the resources to be able to keep departments running while staying still. And if they’re key employees, what’s the fallback if they’re unable to work? It’s vital to have a people continuity plan in place as well.
The other critical aspect, from a procurement standpoint, is being able to source alternative products and services on the fly. At the same time people are trying to find balance in working at home, there is a higher demand on many workers to deal with serious challenges to companies.
Healthcare is a perfect example. One customer in the acute healthcare space is struggling to find and get medical supplies to doctors and facilities, which is hard enough without employees being remote. But on top of that, they’re having to go outside of their normal, mainstream sources to find supplies they need, which means lead times are getting longer as teams look for alternate sources. That may mean finding smaller suppliers, which also have to be vetted and verified, but now with a very abbreviated timeframe.
As with contract management, dealing with these considerable issues is going to be significantly alleviated with the help of technology, especially data-integrated cloud-based sourcing and procure-to-pay tools. The collaborative aspect alone — putting everybody on the same page, regardless of where they are — is a huge advantage.
Business Disruption Lesson: Digitization to Survive Disruption.
From a business continuity perspective — and a business case perspective — the digitization of Procure-to-Pay, Order-to-Cash, Contract Management and other processes is really embedded in hugely disruptive situations like we have today.
Without source-to-pay processes that are fully automated, for example if you’re still using paper and manual processes for AP and your offices are all closed, where are the invoices going? How are suppliers going to be paid? What are the workarounds? Companies have suddenly become acutely aware of the bottlenecks — as well as costs — non-automated processes can create.
Moving source-to-pay processes to digital via SaaS solutions that can be accessed anywhere truly empowers the whole idea of agility and how quickly organizations can respond to disruption. In addition, companies that have prioritized digital not only have the ability to move employees remotely and keep them connected, they’re going to be much more prepared for any eventuality — whether a natural disaster, large-scale power outage or anything else.
Business Disruption and Continuity Takeaways
In addition to the lessons above, probably the most important thing that organizations can do is develop a much more long-term approach and strategy to business continuity as a whole. It means thinking more outside the box about what can go wrong, and having a wider view of what needs to be included in a business continuity plan, and what exactly are the things you may need to do: Hold on to inventories to make sure you’re backed up across the globe? Change the way you structure costs? Revise the way teams are staffed?
The better, more comprehensively you can plan, the more resilient your organization will be.