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COVID-19: Take These Four Steps Now to Weather the Storm

The reality of our new world is finally sinking in, with the COVID-19 pandemic sprawling across the globe. The actions you take now will determine how well organizations will weather this economic shutdown. In many cases, the survival of the enterprise is literally at stake.

Organizations need to get ahead of the COVID-19 curve if they have not already done so. I predict that by this time next week (Monday, March 23), if not sooner, most of the developed economies in the world will be on near-total lockdown. Only gas, groceries, and medical services will be operational.

What does this mean for your business? In the vast majority of cases, it means an almost-total pause in economic activity, which means your customers are not going to be buying much of anything. Operations must be curtailed across all supply chains other than those related to survival, such as food and medical supplies.

It is easy to make a knee-jerk reaction and lunge for your library full of contracts to see what protections you might have in the areas of pandemic protection or SLAs pertaining to uptime and business continuity. Alas, prepare to be disappointed. Most contract negotiations overlook these types of disruptions as they are deemed “black swan” events.

Well, another black swan has arrived.

Our current times now require us to lead beyond the contract. There will be plenty of time for filing complaints, claims, and disputes once the crisis abates and the storm waters recede. Instead, now is the time to evaluate your business continuity plans, both internally and with your service providers. Info-Tech Research Group has extensive coverage and resources at our COVID-19 Resource Center.

These are the times where organizations that have invested in a holistic IT vendor management initiative (VMI) can rely on the strategic relationships that have been cultivated with your most critical vendors, ensuring that you get “front-of-the-line” attention and care. For those just getting started down the VMI path, we provide numerous resources and have analysts awaiting your calls as well.

1. Assess Near-Term Service Disruption Risks and Get Innovative

Organizations need to move into a triage mode immediately, identifying the business-critical processes and applications required to maintain core operations, customer support, and revenue streams. Then tie back these critical business processes to the vital vendors you rely on most. The goal is to identify your “critical few” and focus your limited resources on these vendors to maximize your chances of keeping core supply chains, data chains, and communication channels fully operational.

In some cases, despite laying a robust vendor management foundation and taking reasonable risks at the contractual levels, your vendors may fail to perform. Start looking for out-of-the-box contingency plans. We are seeing many companies offering free access to their services during this crisis. Some examples include Okta (Okta Identity Cloud/SSO/MFA), Microsoft (Teams and PowerApps Licensing Exception), and Salesforce (Health Cloud for emergency response teams, Quip Starter, and other products for existing customers/nonprofits). These alone offer companies the ability to secure data access and enable team collaboration features for companies who lack these capabilities or find themselves with a failed legacy solution.

2. Start Working With Business-Critical Vendors Now to Assess Business Continuity Plans (BCP)

Info-Tech Research Group covers the BCP landscape holistically in our blueprint Develop a Business Continuity Plan. However, what you can do to enact your BCP plan has key constraints when these actions are tied to your key suppliers. The gating item now becomes how these suppliers can activate their BCP plans in support of their customers.

Organizations that have established key points of contact and escalation chains with their key vendors will find they have access to critical information faster than their competitors. Either way, now is the time to start engaging these vendors proactively and probing them for how their systems are coping with the increased demands caused by the current COVID-19 crisis.

Start discussions around joint BCP plans with these vendors now. Don’t be shy about asking them to be forthright in terms of how they are prioritizing actions across their client base, as all customers are NOT created equal.

Do not just take what is said at face value. Many vendors will seek to minimize negative PR during this crisis, so customers will need to read between the lines. Look for situations where the tone or body language (if on video) does not match the words being spoken. Be aware if crucial personnel are suddenly not available to take your call or where previously smooth communication channels are disrupted, as these are red flags that underlying issues may be at play.

Communicate clearly with your business partners and customer stakeholders your plans and how they are vendor dependent. Establishing lines of communication, even if the substance of the updates is shallow or in flux, will provide comfort and remove frictions as the crisis develops.

3. Prepare, React, Get Moving: The Remote-Work Struggle Is Real

You can’t open your email these days without seeing an article or advertisement describing the mass movement of workers to remote-work operations. We have you covered here as well in our Pandemic Preparation – The People Playbook.

For those of you who already have remote worker programs, this event simply becomes an exercise in scaling up to meet the additional demands of most or all your workers accessing your systems en masse.

Where remote work is a new phenomenon, the challenge becomes exponentially higher. Consider how to accommodate for the following high-level criteria:

  • Mobile hardware/software assets (laptops, cords, headsets).
  • IT asset management considerations (sign out, traceability, assignment of equipment).
  • Organization change and communication programs that educate and coach employees on ways to manage work effectively in a remote work environment
  • HR programs, policies, and systems adjustments to communicate and accommodate an increase in absenteeism, flexible work policies, leaves, and other work arrangements to ensure a safe working environment at home.

Ensure that unified communications solutions provide the applications and data bandwidth capacity appropriate to enable employees to operate at full speed. Where possible, bypass VPN-based constraints and enable applications that connect directly to the cloud, with proper security provisions being activated. Any action that can leverage the existing home network of your employees and prevent a bottleneck into a VPN system will alleviate massive loads on in-house data centers with limited throughput.

4. Prepare a Cost Optimization Strategy Now

Specific industry segments will feel the negative economic impacts of COVID-19 more than others. Those in the manufacturing, travel, entertainment, and transportation segments are already ramping down operations and costs at a rapid pace. In uncertain environments where a recession is likely imminent, cash is king. It’s time to prepare accordingly.

Clients should start taking stock of available tools such as credit revolvers, estimated accounts receivable outstanding, and lines of credit to raise maximum available capital levels to weather the storm.

While harsher measures such as employee layoffs are inevitable, companies would be wise to use some of their capital to buffer the financial impact for their employees, as this will be a short-term event under most scenarios (more on that below). Once life returns to “normal,” companies will require their labor force to bring business back to life. Smart companies that have a strong balance sheet and that take care of their people will emerge stronger than those taking a myopic approach.

For starters, audit areas of spend that tend to creep up over time and are often mismanaged, such as wireless spend, software license shelfware and bloat, and contractor service rates. Consider a robust forensics exercise for your accounts payable invoicing process as well, as errors tend to rise in good times as the priority becomes processing a flow of high volume vs. accuracy.

Our Take

Businesses need to segment their business continuity planning (BCP) activities and operational playbook into distinct phases. To oversimplify, we are currently in what can be characterized as a “shutdown” phase where businesses will ramp down to a minimal viable operating model. This phase will look different across organizations depending on what industry they operate within. For instance, those in the hospitality industry will see a complete shutdown, whereas a hospital will be running past typical operating capacities. Businesses should plan for this shutdown phase to last for at least the next two months, and in an extreme case, up to three or four months.

As the virus outbreak wanes due to the extreme shutdown and social distancing measures taken along with the onset of spring weather (assuming this is a seasonal virus), the enterprise must be ready to shift from shutdown to recovery. Info-Tech Research Group will be publishing additional notes on this topic. For now, start considering how your organization plans to ramp back up quickly, smoothly, and efficiently, at the same time as every other business in the country!

Hopefully, the recovery will be as swift as the decline has been these past few weeks. If so, those who have prepared by proactively engaging key vendors and preparing to access a vastly reduced supply chain will have the best chances to achieve a return to normalcy.

Want to Know More?

Info-Tech Research Group COVID-19 Resource Center

Manage Your Vendors Before They Manage You

Design and Build an Effective Contract Lifecycle Management Process

Improve Your Statements of Work to Hold Your Vendors Accountable

Establish a Sustainable Vendor Management Office

Respond Effectively to COVID-19

Collaborating During COVID-19: A How-To

COVID-19: Making the Case to Invest in and Expand Telemedicine Services

COVID-19 Daily Summary – March 16, 2020

Visit our IT Cost Optimization Center
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