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  /  Thought Leadership   /  BILIF-IERP® Risk Forum: Living With The Pandemic

BILIF-IERP® Risk Forum: Living With The Pandemic

“Prepare to live with the pandemic,” said keynote speaker Dr Anthony Dass, Group Chief Economist, Head of AmBank Research and member of Malaysia’s Economic Action Council Secretariat. “Prepare to digitise.” He was speaking on the second day of the two-day Risk Forum organised by the IERP® and the Brunei Institute of Leadership and Islamic Finance (BILIF). Many businesses do not understand the consequences and implications of digitisation. Subsequently, there was a need to educate micro-SMEs at all levels.

In addition, there were technological issues to deal with, such as the extent of network support, which is still uneven in some areas, and the problem of raising “green” capital for businesses that appeared environmentally unsustainable but were worthy of being funded nevertheless. There were also businesses currently operating which were experiencing similar problems. But regardless of these challenges, digitisation, the use of technology and sustainability were imperatives that had to be dealt with, in order to move beyond the pandemic situation.

The pandemic has caused global supply disruption, and made the future of the workforce more challenging. Many countries went into various levels of lockdown, triggering the Work From Home (WFH) phenomenon globally. Almost 40% of the world’s workforce started working remotely but with restrictions easing, most employers expect staff to return to their desks, although some are acquiescing to hybrid models that divide their time between home and office. WFH really requires higher levels of digitisation; corporate sector reforms must now look at new ways of doing business.

These new ways include the use of online payment facilities like e-wallets but there is still a need for brick-and-mortar set-ups too – increasing the challenge of recovery, as interconnected structural issues have also been affected by the pandemic. Beyond this, strong integration was needed between the public and private sectors, and the people. Warning of the emergence of more crises – global debt, household debt, depleted savings, service debts etc – he said that these will have to be endured, and managed, besides the pandemic.

Risk governance is therefore vital. Assessment of global conditions have shown an uncertain, very complex picture. A multidisciplinary approach that combines both science and technology is therefore necessary, if businesses – and people – are to navigate the interdependencies of now-complicated systems, and understand the dynamic interconnections between the economy, market, population and culture. These points were taken up for discussion during the forum that followed.

Besides Dr Dass, forum panellists included Dr Goh Moh Heng, President of the Business Continuity Management Institute, Singapore; and Jeannie Koh, Assistant VP Risk Management, Great Eastern Insurance. Koh remarked that the pandemic was actually becoming endemic; the world was now dealing with a humanitarian crisis. Steps therefore needed to be taken to mitigate from the angle of staff and safety, among other considerations. Jeannie Koh added that there was a need, in view of this, for fundamental changes in business strategy.

As part of her presentation, she explained that what needed to be taken into account was the changes in customer behaviour and evolving needs; unpredictable demand patterns and structural overcapacity (e.g.: airlines but no passengers). Demand was erratic and constantly changing; a major concern now is how to prepare for and adapt to these changes. Organisations must consider how to redesign the end-to-end customer journey with an eye to getting ahead of the next stage of the virus, not merely accommodating the “New Normal.” Their new operating models would have to take into account future disruptions.

The focus of the “Plan-Ahead” team would be on how to position the organisation taking into account the economic scenario and structural shifts, and how the organisation works. It would have to plan how the workforce returned to work, and strategise for the New Normal. The major challenge would be in knowing what is going to happen, so reimagining and reformation would be necessary. This could be done based on five main pillars: the consumer, supply chain, government regulations, the organisation itself and corporate valuation.

Companies would have to include a possible shift in customer loyalty and changes in customer behaviour that would impact the business, when reimagining the Next Normal, and factor in how to accommodate or mitigate this. They should monitor their supply chain for resilience; a fully digitised supply chain would improve transparency. Jeannie further stressed that this would be imperative as the pandemic may last longer than originally anticipated, and with it, prolonged uncertainty.

Resilience from a BCM perspective was also the basis of Dr Goh’s presentation on the Covid-19 Pandemic and Business Continuity Management (BCM). BCM was part of operations risk, Dr Goh pointed out. When risk management makes an assessment and finds a threat, BCM kicks in. “It’s tactical, and needs a team on the ground,” he saidBut all the plans that are in place now were not designed to handle an event of the magnitude of the pandemic, partly because they were not developed comprehensively, and were developed in siloes. There is no “right” plan, as all plans basically address business continuity, IT disaster recovery, supply chain and crisis management – but none of them addresses all issues simultaneously.

Because of this, Covid-19 is not being effectively addressed as it involves all these issues, he remarked. Companies have a social responsibility to protect their staff, he pointed out, and one way of doing this is by digitising operations. “If you don’t digitise, you will die,” he said flatly, adding that if companies could afford it, they could spend on new equipment and improved Internet access, but if they were floundering, they had to improvise. Depending on the situation and the culture, different measures could be applied.

In Singapore, for instance, a “circuit breaker” was enforced to slow infections, while Malaysia had various Movement Control Orders (MCOs) that could be eased or tightened according to the severity of the situation. Dr Goh reiterated, however, that countries could move to endemic level only if a high percentage of the population was vaccinated. Upgrading or tightening (of processes and procedures) in other areas needed to be considered. Upgrading or tightening (of processes and procedures) in other areas needed to be considered. This was necessary for the move towards operational, business and organisational resiliency.

He projected that disruptions will continue for another 18 months at least; in addition to which, most companies which have not digitised their operations appropriately will still need staff to come into the office. To help gauge the situation, he advised businesses to keep a close watch on what the government does, on a weekly, fortnightly or monthly basis, in order to orient their recovery accordingly. Agreeing that it was a challenging time, Dr Dass added that businesses were most concerned about how to survive but there were other things besides that which demanded attention.

Dr Dass added, “One of these is reform; another concerns matters related to the supply chain, and how to manage, going forward. Imagine the worst-case scenario and go with that,” he advised. The insurance industry, on the other hand, was having to deal with different problems, said Jeannie. Customers were looking for increased flexibility; more people were underinsured with the rise of the gig economy, and insurers were being pushed to do more online, spurring partnerships with other industries. But for some countries, the outlook could be quite positive.

Dr Dass said Brunei, for instance, could benefit from good oil prices which were projected to be between US$70-US$72, possibly touching even US$100 a barrel next year. Overall, Southeast Asian countries were expected to improve. Despite this positive outlook, however, boards still needed to give clear direction on the value proposition of the company in the next two years. They will have to look at what the company will become; whether WFH is viable, or if a hybrid model will be better; possibly even the remodelling of physical space to accommodate alternating teams.

He reminded participants to be mindful of what was happening inside and outside their respective industries and countries; revisit their strategies regularly; and cultivate flexibility and agility while taking a pragmatic approach. The speakers urged resilience and capacity-building, reiterating that hybrid ways of working were here to stay. Despite the possibility of other crises, a lot of things had gone back to normal; what may have changed were the design, recovery and handling of the situation.

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