Innovation, agility and customer orientation are often at the top of the list of companies’ strategic goals, and now the most pressing priority is resilience. Given this new urgency, it is worth looking at the basis of resilience and how they could be used in any industry.
In retrospect, many are not surprised that Amazon, the now global technology giant, survived the “dot com bubble” as an early online marketplace. Recently, it has become a critical business partner for many companies and a lifeline for individuals and families around the world during the COVID-19 pandemic. With operations across many industries, Amazon is in a unique position to respond faster and more smoothly than so many other companies in part because of their ability to predict the next shopping experience by optimizing their resources to please customers and as a result of investments in innovative technologies.
To say COVID-19 has disrupted everyday life, and every aspect of corporate operations is an understatement. Organizations of all sizes and types have felt the impact of staff availability changes, changes to online marketplaces, a practical halt to air travel, renegotiations with suppliers, and financial concerns.
Go to analytics to improve resilience
Lean manufacturing methods have not stopped the stress. Cost-saving initiatives have been implemented at every link in the supply chains, resulting in excessive trust in a few suppliers and distributors. But why have deficiencies affected the availability of certain products more than others? What tactics have emerged that leave some companies in better financial shape than others?
While leadership, vision and the ability to perform are all contributing factors, a similarity between companies surviving the pandemic is a mature analytical foundation. They demonstrate key elements of resilience by using reliable data and analytical capabilities during the crisis in significant ways:
- A global life sciences company measures engagement in a new online learning system for healthcare providers.
- An energy company that analyzes shift load requirements from commercial and industrial customers to balance power contracts.
- A global consumer business is navigating near-real-time changes to supply chains, source materials and expected demand to keep products on the shelves.
- A grocery store uses heat map technology to monitor room capacity and identify high-touch areas that may require more frequent cleaning.
- A pharmacy chain optimizes personal communication so that customers keep them informed through the right channels.
- A financial lender quickly adapts fraud detection models to cut identity theft by 80% and keep lines of credit available.
The five pillars of organizational resilience
And even with the confidence in their decisions made possible by applying advanced analysis techniques to critical areas, an important part of resilience is ongoing positive impact. To have the lasting effect, organizations can build the foundation for future resilience in five ways.
Integrate and protect data. This pandemic has revealed the inefficient solutions that many companies have used to fill gaps in data quality and completeness. Resistance for the future requires options to easily connect to the data you need, whether in the cloud or on the spot. Businesses need a comprehensive understanding of how managed data is used across the enterprise, and the ability to analyze it for data-driven decision making. Building such a data and analytics strategy will ensure that the analytics that unlock the value in normal times are resilient, regardless of the nature of the interruption.
Mitigated financial risk and fraud. Every day, companies are tasked with being attentive managers of capital and personal information. During a pandemic, it is even more important to evaluate financial interactions throughout the customer’s life cycle to reduce the risk of identity and digital fraud. Analytics can provide insights that protect all parties, while monitoring changes in customer behavior that indicate increased risk.
Upskill in forecasts and predictable modeling. Organizations that have already established skills in forecasting and predictable modeling know where to look for answers. Advanced analytical solutions extend this process by making models more repeatable and managed.
Evaluate and adjust the “optimal” supply chain. Estimate faster and more accurately the effects of product availability and revenue and total costs for different demand scenarios due to COVID-19 and other disruptions. Determine business plans that are consistent across the enterprise and that can guide operational decisions in detailed planning solutions to balance goals. Create a set of consistent and synchronized plans for all components in the supply chain.
Analytical wise leadership. This final catch may be the most important. It is the challenge of any leader to determine the way forward in the face of uncertainty. Whether entering new markets, determining product design, or adapting during a crisis, companies use analytics to model different scenarios and predict operational impacts. Even the most accurate prediction still has a certain margin of error, so the leader’s willingness to test and learn is crucial to success. Managers will shed light on companies’ resilience through their communication and actions.
It is unlikely that our global economy will recover smoothly in all sectors. There will be lumps and bumps due to the wake of the pandemic as well as greater social and geopolitical dynamics. Today’s “new normal” may continue for months and years to come. For companies of all sizes, it is clear that a foundation in data analytics will result in stronger and more resilient organizations in the coming decade.