In order to unlock the full business value of contracts, organizations will need to increase revenue, reduce cost, accelerate cash flows, and minimize risk.
- By Monish Darda
India has the third-largest start-up ecosystem in the world, with an average of three tech start-ups born every hour. The expectations were high for 2020, considering that 2019 was a blockbuster year in the history of start-ups in the country, with $14.5 billion in funds raised cumulatively. However, the Covid-19 pandemic emerged, disrupting financial markets and leaving the world teetering on the edge of an economic downturn.
The forecast suggests that there will be a permanent income loss of $620 billion in the Asia-Pacific (APAC) region on account of the pandemic. As a result, seed funding – a start-up’s first step towards raising capital – is projected to decline by 22 per cent in India (in Q1 2020 vis-à-vis Q4 2019). These short-term challenges can be turned into long-term opportunities for strong companies that are willing to transform swiftly. The Indian start-up ecosystem has been agile in adapting itself to the dynamic business environment. A case in point is that of online education, which, over the past few weeks, has helped students and parents alike across the bridge and develop digital skills. As the situation around the health emergency continues to evolve, start-ups are focusing their efforts on the ‘how’ and ‘what’ needs to be done to weather the impact of the coronavirus outbreak.
Focus areas – The ‘How’
While it will take a collective effort on the part of public and private enterprises as well as individuals to beat the pandemic, here’s how businesses can recalibrate themselves to meet the challenges. The unprecedented situation calls for businesses to commit to the health and safety of not just their employees, but also of the community, customers, and partners –the four cohorts comprising their ecosphere. The perspective involves straddling both inward and outward-looking approaches for shielding their ecosphere in a net of safety.
This net represents the four rings of responsibility, with the first or the core responsibility focusing on taking care of self. Individuals can do this once their employers empower them with the infrastructure and tools needed for working safely from their remote locations. However, it also requires organizations to take responsible steps to ensure the safety of employees Additionally, there should also be a focus on motivating employees to search inwards and exercise judgment while making decisions, solving problems, and thinking creatively about possibilities.
Once employees’ needs are taken care of, they need to be encouraged to shoulder the second ring of responsibility, which is enabling employees to focus on caring for their families. Here, organizations must account for and support employees’ families as they encounter a new work-life balance. For instance, some organizations are encouraging employees to introduce their family members and pets in virtual meetings, adding a touch of warmth to professional relationships, and building new bonds.
The third ring calls for going beyond the call of duty by caring for communities impacted by the crisis. It’s not uncommon to hear inspiring stories of individuals going out of their way to feed migrants or the economically weak. However, at an organizational level, there is a lot more that can be achieved in this regard: from arranging meals for children staying in school premises to donating PPE in hospitals and finding care assistants for the elderly.
The fourth ring of responsibility is to take care of business. While taking care of ourselves, family members, and communities, we also need to take on the responsibility of protecting our livelihood. Hence organizations need to identify creative ways of navigating through unforeseen issues in the face of crisis. This could involve moving business operations to the cloud, expanding customer support, and staying virtually connected with customers.
Combating Covid – The ‘What’
Several start-ups promptly started developing solutions for Covid-19 applications in the areas of prevention, detection, disruption management, and operational efficiency. For example, with Bespoke, Japanese residents and travellers can ask the chatbot different questions about their health and the virus (such as symptoms, treatment, or preventive measures). However, we can witness an increase in mounting pricing pressures that would gravitate toward takedowns on account of Force Majeure clauses in contracts. Therefore, in order to unlock the full business value of contracts, organizations will need to increase revenue; reduce cost; accelerate cash flows; and minimize risk while adopting these three pillars:
Accelerate: Derive Quick Time to Value (QTM) to rapidly improve the bottom line.
Protect: Identify and mitigate current risks and protect against future risks.
Optimize: Drive efficiency and agility with always ‘on’, anytime, anywhere contracting.
Expectations from post-Covid Scenario
The Covid-19 pandemic has been an accelerant for the adoption of remote working that has necessitated organisations to make provisions for easy transition. In addition, they are likely to focus on the existing security infrastructure and determine the workforce segments that will need an additional thrust of safety. This is anticipated to be followed up with training sessions for the workforce on rules around data protection and proper data use.
In order to offset any further uncertainty, organizations will ramp-up capacity for self-service web, email, IVR systems, chatbots, smartphone apps, etc. to assist customers to ensure better preparedness against any future shocks to business. Crisis begets opportunity for strong companies that are willing to change quickly. Start-ups that will be swift in capitalizing the underlying opportunities will unlock the potential for growth and, in the process, discover a new lease of life.
Monish Darda is the Co-founder and CTO of Washington-based Icertis. Views expressed are the author’s own.