COLOMBO : In delivering the Budget Speech 2020 the Honourable Prime Minister acknowledged that irrespective of the challenges the country is faced with, it must be acknowledged that there is a paradigm shift in the world economy, which moved forward with industrialization which has now entered into a technology driven economy. He further mentions that one must move away from outdated strategies in developing the Agriculture, Industry and Services sectors.
In order to understand how businesses and related stakeholders can do a paradigm shift in thinking and in effort, to survive and prosper through this Pandemic, Colombo Times spoke to Imran Furkan FCPA, FCMA, MBA, the CEO of Tresync. He has contributed in Senior Management and Board Directorship roles in industries such as Finance, Media, IT/ BPM, Commodities, and Professional Services in the Asia-Pacific region. He is the former CEO of the Sri Lanka Association for Software Services Companies (SLASSCOM) which is the national chamber for the knowledge and innovation industry in Sri Lanka also the former CEO of the Sri Lanka Press Institute (SLPI) and a former Non-Executive Independent Director of Trade Finance & Investments PLC. Imran is based in Australia and Sri Lanka.
In an exclusive interview to Colombo Times, Imran shared his views across diverse areas of interest covering Business Survival, SME sector, Education sector, young professionals, digital disruption, etc
Business Survival
Drawing from his experiences in strategic roles, Imran provided 3 key focus areas for business leaders to survive through this Pandemic
1. Quickly moving into digital channels for marketing, accepting orders and accepting payments.
As more people moved online and stayed there, savvy businesses that started taking orders online/via messaging apps, used social media platforms to market aggressively using both organic and paid advertising plus accepting online payments flourished. Some but not all went on to existing delivery platforms though this reduced profitability sharply due to high commissions charged by them. Therefore, key point here is be a digitally savvy business-fast!
2. Right sizing the business for a prolonged downturn
The effects of the pandemic would last for up to two years since it’s start. Hence the smartest businesses around recognized this reality early on and right sized their business to account for this. Cancelling long leases for office space and replacing this with shorter leases in shared spaces, laying off excessive employees however unpopular this was, pursuing mergers and acquisitions and going in for automation/digitation aggressively were the most effective strategies adopted for right sizing.
3. Only the paranoid survive- prioritizing cash flow as if your very survival was at stake
Anticipate that creditors would not be able to pay or pay late. Others will not survive the Covid-19 crisis and hence you will receive almost nothing. Also factor in the time value of money. Therefore, the smarter businesses did every conceivable thing to collect cash that was due plus initiated measures to get paid directly either by setting up online platforms, cash on delivery or selling directly to consumer bypassing middlemen they had used for years.
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Digital Disruptions – Response to COVID 19
Imran share his views on digital disruptions adopted globally and locally in response to the current COVID 19 situation
1. Massive transitions to remote work/ collaboration/ supply of services overnight
Sri Lankan tutors now teach Australian students’ for qualifications like CIMA while students do CIMA exams at home via remote invigilation by humans and software. Using QTake, which allows a director to be anywhere with an internet connection, and see a high definition, real-time view from inside the camera lens movies can be made in one continent for use in another and authorized by company authorities in a third with only an actual skeleton crew. Everyone from Yoga instructors to priests now peddle their services online and remotely to a global audience. This will be the new normal.
2. Digitization of previously manual activities overnight
For the first time in 126 years that the Colombo tea auction deviated from it’s conventional ‘out-cry’ system, requiring the physical presence of the buyers, to move into the electronic age with buyers recording their bids from remote locations. Like this many industries/companies and countries digitalized previously manual activities overnight.
3. Custody of last mile delivery
Curfew/ lockdown meant that products and services needed to go to the consumer as the consumer wasn’t physically able to go to the location of provision of that service as before- whether it was a business service, food consumption or education. Those that had previously used intermediary service providers to ensure final delivery are now doing it themselves to ensure quality, reliability and faster payment.
4. Utilization of ultra-local suppliers
Customer’s not only migrated online in droves they also used the full potential of technology to locate suppliers closest to their location so that they can be guaranteed their delivery as larger suppliers buckled under capacity pressures. They also wished to support the regeneration of the local community and local suppliers. This trend is likely to continue.
5. Compressed innovation cycles
From taking 10 years to develop a normal vaccine the World has developed multiple ones for Covid-19 in 10 months. Ruthless, focus competition and unprecedented collaboration has led to compressed innovation cycles and going forward this will also be the norm across multiple industries.
6. Changing customer needs/ expectations
There has been a profound shift to value and essentials, while loyalty is out as ability to switch digitally is almost costless. Home based activities are in and so are ones that can be done online. Seasonal spending is being replaced by spending throughout the year.
7. Cloud first applications
The need to provide remote access means almost every application has become cloud first and this has huge implications for the future in terms of how and where we work and service clients.
8. Near shoring and building redundancy in to supply chains
Irrespective of protectionst tendencies reducing after Trump’s defeat, the mere need to guarantee supply chain reliability means that companies will continue to bring supply chains closer to home, diversify suppliers and build in some stock levels of key components or end products.
9. Increased spending on the Cyber security
As remote work balloons and more workers access critical parts of company infrastructure via their home computers companies are scrambling to increase cyber security spending to secure company infrastructure even while ensuring easiest possible access to stakeholders amidst the pandemic.
10. Increased use of advanced technologies in decision making and operations
The disruption caused by the pandemic has brought in to focus the need to move away from key person risks by automating decision making to ensure faster decision making in a dynamic World. Hence technologies such as A.I and Machine Learning will be increasingly used in decision making and the Internet of Things, Drone technology, Robotics, Robotic Process Automation and 3D printing will come in to play more aggressively in operations.
Advice to Young professionals
Imran in response to a query on entering the job market at a time of crisis explained that “In a person’s career there are various phases. Some are growth phases and while others are survival phases. In a survival phase like this, the key is to obtain a job at any costs and if you have one keep it under any circumstances including accepting temporary salary reductions/ role changes/ transfers etc. proposed by employers. In the growth phases of your career you can recoup these losses in remuneration/positions. Also don’t forget to accept challenging projects that come up within your organization such as a corporate restructure including those outside your division, for these opportunities let you get noticed among important stakeholders”.
SME Sector
Imran shared his views on certain schemes adopted in other countries to support the SME sector which is a key focus area in any economy.
“Governments in some countries moved to give direct income support facilities to companies and industries badly affected by Covid-19 such as tourism, aviation and hospitality. Based on these schemes, some companies who met certain tests on the decline in turnover were given flat payments to pass through to employees provided layoffs were not undertaken. They also gave government guarantees on the debts for a limited period so banks can extend the debt moratorium benefits without fear of default by borrowers and also the banks’ ability fulfill Basle and other capital adequacy regulations were not impeded. Also, Central Banks can temporarily reduce reserve requirements and capital adequacy to permit banks to lend more. The Sri Lankan Government and the Central Bank can also undertake such arrangements.
Education Sector
One of the key areas that is disrupted due to the pandemic is education. Although professional studies are provided online, schools island wide does not have the required infrastructure to provide online courses for primary and secondary education. In responding to a query as to whether the Sri Lankan policy makers has addressed this matter adequately in the recent Budget 2021, “I think the current budget has outlined a good strategy of using widely available mass media such as television, radio etc. in addition to online platforms to get educational content delivered to students. The previous government was on to something when they wanted to give tabs to advanced level students. The budget envisages better island wide connectivity which in the long term is the key for making education accessible plus ensuring that children have access to cost effective devices to access this content. Finally, measures to ensure that adequate preparations are made for content to be developed and stored for widespread use of a hybrid classroom environment going forward is a must and needs to be pursued immediately”
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Interviewed and compiled by Rifka Ziyard, Director – Tax & Regulatory, at KPMG. She is a Fellow Member of the Chartered Institute of Management Accountants, UK, Chartered Global Management Accountant (CGMA), Fellow member of the Sri Lanka Institute of Taxation, and has a MBA and a Bachelor of Commerce from the University of Colombo. She is also the chairperson of the CIMA Sri Lanka Network Panel.
