The Ripple Effect Of Coronavirus Across Functions In An Organisation

The Ripple Effect Of Coronavirus Across Functions In An Organisation

In early 2020, when the news of a novel virus outbreak hit the international headlines, the world couldn’t predict the intensity of the situation. Within weeks, the rapid spread and aggravation of the virus took the world by shock – countries were compelled to shut down all functions and employ nation-wide quarantine. What followed was a chain of shock waves across the world economic spectrum – triggering a colossal transformation for businesses across the globe. The current pandemic crisis has impacted all functions in an organization and demands a holistic approach and tactful strategy modification to mitigate the looming risks. 

However, this isn’t the first time that the human race is amidst a crisis situation. In fact, if history and experience have taught us anything, it is the adaptability of humans in the face of adversity. Organizations and functions everywhere will adapt and evolve in the wake of these changes. 

In keeping with this, we decided to talk to the function leads and thought leaders at KredX about their view on how respective domains and the business world, on the whole, will respond to the crisis and evolve as a result of it.

Anurag Jain, Co-Founder & Executive Director, KredX

Impact Of The Pandemic

Supply chain finance has always been a vital ingredient in the smooth running of any vibrant economy. It infuses the much-needed liquidity into the supply chain, which permeates through multiple layers and reaches the last mile supporting small and needy businesses. In times of crisis, any disruption to this chain leads to a discontinuity in the value creation at each level and subsequently affects the profitability of vulnerable small businesses.  

The economic impact due to COVID-19 will be far-reaching and unpredictable at this moment. The current lockdown has already brought the economy to a grinding halt giving a severe blow on GDP, and with the reverse migration of labour and employees, it will be months before we see the activity returning to normal levels. 

Functional Adaptation In Response To COVID-19

Digital lenders and platforms will become more conservative in their disbursals which will affect the economy negatively and will further widen the working capital gap being faced by the MSMEs in India. Moratorium announced by the RBI might ease the situation a bit, but the question is more about the ability to pay rather than getting an EMI holiday. The worst part about the coronavirus pandemic is the uncertainty about its end and the potential impact it will have on not only the domestic market but also the global economy.

Post-Pandemic Trends In An Organisation

As per a study, most of the small businesses in India do not have a backup cash reserve of more than 27 days on average, and any extension of the current lockdown will severely challenge the sustainability of these businesses. “Unprecedented” would be the right word to sum it up. 

The Way Forward

KredX has been one of the very few truly technology-driven fintech companies, and most of our workflows are entirely online. With a strong technology foundation and conservative risk-based credit underwriting, KredX has been serving corporates and small businesses with their working capital requirements for the last 5 years successfully. By putting more stringent checks on the onboarding and listing, we are trying to weed out any potential stress which might get into our portfolio currently. We know that this is just an aberration and this too shall pass!

Devang Mundhra, CTPO, KredX

Impact Of The Pandemic

The pandemic outbreak has exposed the vulnerabilities of many nations. On the one hand, you see many nations crumbling to the rising number of cases, whereas on the other hand, countries like South Korea, Taiwan, and China successfully curb the outbreak. Countries that were quick to control the pandemic harnessed data and algorithms to combat the pandemic outbreak. A vital element in their approach was the widespread collection and use of data like location, health records, social circle, telecom data to ensure the safety of its citizens at low cost and large scale. These data are used in conjunction with algorithms developed by either private companies, government research labs, or both to allow them to follow different kinds of strategies. And, it’s only a matter of time that this strategy will become a case study for other countries to follow and replicate. Hence a lot of focus will be towards the data collection and processing capabilities of the government. There might be additional capacities added to collect data like putting up more and varied sensors at different places to feed into a common data repository.

Contrarily, the massive data collection will raise privacy concerns with debates around tradeoffs leading to questions on security, for instance, privacy vs health, privacy vs safety, and such. It is because this pool of data will become very lucrative for private companies. On the home grounds, India is already on the path to consent-based data sharing for financial data, and that framework might get leveraged for others.

Functional Adaptation In Response To COVID-19

The ripples of the pandemic outbreak are being felt across industries and markets. Despite the aggressive measures and collective endeavours initiated by authorities, COVID-19 continues to challenge the global ecosystem, triggering massive health crisis and hitting businesses across industries. The pandemic has exposed the vulnerabilities of the business ecosystem. 

However, this isn’t the first time that the business ecosystem has been subjected to downturns. The dotcom burst in 2001, the financial crisis of 2008, demonetization in 2016, and COVID-19 in 2020 along with many domestic and international natural disasters will compel businesses to plan for much longer.

Businesses will get affected by the whole new norm of remote working; however, many of the issues pertaining to it will get addressed in the short term. 

Post-Pandemic Trends In An Organisation

Post the pandemic outbreak, companies will start to think about risk management much more acutely. They will begin looking at uncertainty with a different lens given the accelerating trends of black swan events – whether financial, political, biological or natural. 

Going forward, companies will need to become more responsive to situations given the speed at which information starts to spread and impact their markets and supply chain. For these, they will need tools and decision frameworks to be able to take rapid actions.

On the domestic front, India will lose its edge of cheap labour as a lot of the migrant workers who went back to their natives might not return, as they may find either government assistance or alternate employment in villages or nearby towns. Hence, companies will need to start relying a lot on automation – whether in terms of factories or processes.

The Way Forward

Hybrid remote working will become all the more common, and many companies will require to analyse how to have a productive and happy team in such an environment. Digital tools will be embraced in the workplace to manage remote working scenarios and improve responsiveness to fast-changing circumstances.

In the near future, business continuity plans will get tested in different scenarios. This outbreak will test a company’s resilience against rapidly developing scenarios, network and connectivity issues, and such.

Many productivity tools will see newer growth opportunities as more businesses adopt such products in response to the changing workplace culture and business requirements. These products might get further refined to be a niche for specific verticals or workflows.

Products will also need to adapt to the seamless movement of data between different data stores which might evolve into standardised interfaces for certain kinds of data. The rapid spread of information via messaging mediums has proven the level of adoption of technology, even at the bottom of the pyramid. Consequently, many companies will leverage that to create business opportunities, whether in payments, education, gaming, etc. An increase in demand for technical talent not only in IT companies but also non-tech companies trying to go digital will face challenges while hiring technical talents.

Moreover, security will become a vital issue as many new digital users will face an onslaught of hackers trying to take advantage of their unfamiliarity in the digital landscape. In such an ecosystem, the tech companies will need to be cautious and take proactive steps to protect not only their own systems but also their users from malicious activity.

Avishek Das, Head – Investor Sales, KredX

Impact Of the Pandemic

The COVID-19 outbreak has caused panic and confusion among investors, triggering a massive plunge in indices leading to the erosion of trust in asset classes. 

Functional Adaptation In Response To COVID-19

Amidst such situations, when the sentiment of the market is hurt, it becomes our duty to instil confidence and faith in respective asset classes and try and respond to as many queries as possible and to stay informed of the developing circumstances. 

Post-Pandemic Trends In An Organisation

With oscillation in traditional asset classes, diversification into newer and alternative asset classes will be the trends of the market. Investors will look at portfolio diversification through a different lens, leading to a tectonic shift and increased focus on short-term, alternative asset classes, along with long-term asset class holding.  

The Way Forward

For the days to come, investors are likely to be more cautious about investment. Still, it’s a favourable time to reach out to investors and make them aware of alternative asset classes and the potential it holds. 

Madhusmita Panda, Head – Marketing, KredX

Impact Of The Pandemic

As a company that functions as a Marketplace providing solutions to both business and the investor community, the impact is kind of multifold for us. The events prior, in the Indian financial set up coupled with the pandemic has wholly shaken the trust of the investor community while businesses are in a complete halt or shut down mode with logistics and inaccessibility being the biggest hassles. 

While I think the business community will bounce back faster and hopefully stronger considering this time, not just the government but the ‘World’ will be working towards a single goal. The investor community will maybe wait and watch before they take any decision.

Functional Adaptation In Response To COVID-19

KredX being a pioneer in the fintech space provides innovative solutions to both investors and businesses that aren’t directly available in the market. A large part of the job of the marketing function at KredX has been to educate about our offering, technology, and processes. The adaptation on the investor side of things will now be more in lines of gaining the trust back while also educating that segment about how the overall market dynamics will and have changed. 

The vendor community will have to be made aware of options and opportunities beyond the traditional formats. A more humane approach, which already is a part of how KredX functions today, will take the forefront in terms of how we reach out to the audience rather than just pushing a product.

Post-Pandemic Trends In An Organisation

Digital will boom on the business side, which has not been that advanced so far. Content marketing will be the top priority, as information, knowledge, learnings, and opinion will be sought after. Account-based marketing will foster since the approach will be more personalised. Additionally, partnerships and alliances will also experience a surge as the world now realises how working as a community is the need of the hour and the future as well.

The Way Forward

As a function, one of the most significant factors that we need to take care of is the expenses. While keeping cost to the minimum has always been a goal, it becomes all the more crucial now. Activities like relationship building, strengthening, educating, and partnerships will take a front seat.

Swapnil Kishor, Head – Risk, KredX

Impact Of The Pandemic

Just like the broader economy, COVID-19 will hurt all the lenders. The fact that fresh disbursal will witness slowdown is only a smaller part of the problem. A more challenging issue for all the lenders to tackle over the next few quarters will be collections. 

Functional Adaptation In Response To COVID-19

Financial activities will slowly pick up, and as a result, fresh disbursal will also see an uptick. However, the picture appears to be grim as far as collections are concerned. 

Post-Pandemic Trends In An Organisation

With most of the businesses shutting shop, it is expected to be a widespread default and consequent rise in NPAs of most of the unsecured lenders. 

The Way Forward

Going forward, lenders (especially unsecured lenders) should focus on capturing cash flows of the vendors to ensure that the Black Swan event does not strain recovery. Traditional lenders would also become conservative in providing any leverage over and above the collateral provided by the vendors.

Yogya Palit, Head – Operations, KredX

Impact Of The Pandemic

The coronavirus crisis will compel companies to acclimatise to the resultant negative or low growth environment. Consequently, the economic crisis will usher in a new set of operational challenges, driving businesses to take rapid steps like reducing expenses to thrive in the uncertain territories.  

Functional Adaptation In Response To COVID-19

Considering the current situation, Operational Risk Management (ORM) will become all the more vital for businesses. The average investment in ORM projects will increase, and more and more financial institutions will focus on ORM’s strategic business benefits. Companies will need to identify and factor the various risks associated with similar disastrous and sudden situations into their operating models and find corresponding mitigants. 

Post-Pandemic Trends In An Organisation

When the pandemic hit the shore, many companies were caught off-guard. This will compel businesses to move from a simple Business Continuity Plan towards charting out a robust crisis management policy that ensures smooth business operation. The plan should cover points like remote working facilities, staggered timings, tools needed, and insurance coverages for official travel cancellations. Tools like scenario analysis and stress testing should come out handy for businesses to establish procedures for such crisis situations.

Post the pandemic, the adoption of a customer-centric operational framework will become even more demanding and less forgiving. Customers will be less trusting, less forgiving, and will have higher expectations from the banks and financial institutions. Businesses will be required to modify the entire operational framework to suit the requirements of the customers – the processes will be more data-driven and customer-centric.

The Way Forward

There will be a massive acceleration in the customer’s demand for digital channels. Businesses who don’t have a strong digital presence or a platform will find it very difficult to operate and customise their deliverables. 

Moreover, digitisation will also be essential to cut down cost and operate with minimum manual efforts. As per a report, the world economy will go into recession with a predicted loss of trillions of dollars with serious trouble for developing nations, with the likely exception of India and China. Hence, the present situation might also lead to many companies shifting their manufacturing base from China to India. Given all this, the sooner the operational framework of the companies would respond to the stress, the faster they will be able to capitalise the situation to their advantage. Moving ahead, businesses should use the following strategies to ensure smooth operations: 

  • Rapidly develop and roll out an awareness/education campaign around digital capabilities and ramp up call-centre support for less tech-savvy clients as they transition to digital channels
  • Fill any gaps in the scope of services that can be delivered through online channels
  • Plan for changes to physical branch infrastructure is required to support vulnerable customers

Ashok Rajgopal, Manager – KredX Early, KredX

Impact Of The Pandemic

The pandemic outbreak has compelled large enterprises and companies to start conserving cash. Hence, making early payments to vendors is not the priority right now. Therefore even with existing cases and programs, we see a sharp slowdown or shutdown in early payment.

Functional Adaptation In Response To COVID-19

Considering the current situation, we should be able to focus on individual pockets of industries which are still willing to support their ecosystem of vendors in times of crisis and take our product implemented quickly.

Post-Pandemic Trends In An Organisation

More people will go digital with vendor payments and vendor invoice verification, specifically to avoid situations where physical movement is restricted, as people are no longer able to work in normal circumstances.

Way forward

It is crucial now more than ever to stay engaged with customers as during tough times. We will be able to navigate the way for them and find opportunities on the way to ensure growth.

Ramkumar N, Head – HR & Admin, KredX

Impact Of The Pandemic

The impact of coronavirus has been spread across sub-functions of HR operations. From onboarding new employees, joining formalities, to employee engagement – all the strata have been affected due to the pandemic outbreak and the consequent halt in business operations. 

For instance, most organisations during the recruitment procedure have a mandatory face-to-face discussion. However, with a country-wide quarantine, hiring has been stalled. Additionally, other HR activities like annual PMS cycle, annual day have been impacted due to social distancing. Today, the normal one-on-one discussion or grievance handling, something which used to happen in a cubicle, is happening via conferencing.

Functional Adaptation In Response To COVID-19

Going forward, leveraging technology would become an industry-wide norm. Earlier all onboarding and interviews were physical, however, now employers are getting used to the new-age virtual onboarding.

Learning and development are moving out from traditional classroom training to virtual training mode. However, this will also raise questions about data security and theft. HR policies will be relooked at – for instance, if employees are allowed to bring their own devices to work, then data should be audited once a month. Additionally, policy on personal hygiene like the use of sanitiser, kerchief while sneezing will be promoted. 

Post Pandemic Trends In An Organisation

HR response to the ongoing crisis will become more critical due to the economic ramification of the pandemic. Many companies have started employee assistance programs via telecon, video conferencing, and emails. Many employers have upgraded the medical coverage so that pandemic diseases are covered.

The Way Forward

With the pandemic outbreak and resultant economic fallout, employees are becoming anxious and stressed about job security and the safety of the organisation. During such situations, employers who show empathy to their employees would be the ones which any employees would prefer in an upbeat market. There were times when candidates were choosing employers basis the compensation offered, but going forward job security in times of economic meltdown would be considered

Moving ahead, ‘cost optimisation’ and ‘rationalisation’ would be the keywords reverberating across organisations. The direct impact of the outbreak will fall on PMS – an activity which used to be an annual exercise would evolve into a quarterly exercise wherein bottom performers and outliers would be informed to improve their deliverables. The future people managers are the one who can manage a remote workforce and engage them remotely, and this calls for leading by example the most.

The Bottomline

The coronavirus outbreak has reigned in a new set of challenges for the entire business ecosystem. Navigating through such a crisis requires businesses to respond quickly to the evolving landscape to maintain continuity and ensure seamless operations. While the immediate future may seem uncertain, there seems to be much to look forward to in due course as the pandemic shapes a new way of thinking.