As the novel coronavirus continues to spread, businesses around the world are feeling the economic effects of the global COVID-19 pandemic. This has quickly raised a significant challenge for companies in various industries like hospitality, tourism, retail, transportation and manufacturing who are struggling to maintain continuity of operations.
Facing this, companies must take a systematic approach to strengthen the resilience of their current business models and ensure their ongoing operation. Chief information officers will play a key role in this process, as digital technologies and capabilities influence every aspect of business models. CIOs should grasp the opportunity of the COVID-19 outbreak as a driver for contributing to increasing business model resilience, setting up their foundation to become true business leaders and win more trust from their CEOs.
Here is a five-phase approach that CIOs can take to help strengthen the resilience of their organization’s business model and minimize disruption during the coronavirus outbreak.
Phase 1: Define the business model
Facing the contingency of COVID-19 outbreaks, companies should first focus on their core customers who are essential to their continuity of operations. Then, CIOs can engage with other senior business leaders to begin the process of defining their current business model.
Ask the following questions to help define the business’s key customers, value propositions, capabilities and financial models:
Phase 2: Identify uncertainties
CIOs should work with other leaders to identify uncertainties relating to the COVID-19 outbreak. This can be done through a strength, weakness, opportunity and threat (SWOT) analysis, or in brainstorming sessions. CIOs can share some of IT’s potential threats, such as issues with IT infrastructure, applications and software systems. Be sure these conversations involve participants with diverse backgrounds and interests, as they can help identify uncertainties and threats beyond IT.
Companies should focus on the risks that the uncertainty poses to specific components of the business model. For example, if a key offering is a food and beverage product, an uncertainty could be that some products may become less popular and have high inventory levels, while others see a stock-out. Or, if a key technological capability is an on-premises POS for retail sales, a threat is that customers may be unwilling to have contact with store clerks during a transaction.
Phase 3: Assess the impact
Multidisciplinary members should form a project team to assess and quantify the impact of the identified uncertainties. These impacts can be financial, legal, regulatory, reputational, environmental, health/safety-related or productivity-related. CIOs can share potential impacts from an IT perspective.
Phase 4: Design changes
Design change strategies to mitigate potential impacts. While some impacts can be addressed easily, some may be more difficult, or even impossible to address. However, at this point in the process, the emphasis is to develop tentative strategies rather than estimate their feasibility. CIOs should leverage digital technologies and capabilities to facilitate the designed changes.
For example, if a food and beverage retailer identifies uncertainties that could result in fewer customers coming into the store, a potential change could be to convert part of the store into a distribution center for the online business. Be sure to identify an estimated timeline and costs for any proposed changes, as companies must be able to act fast and within their budget to increase their chances of survival.
Phase 5: Execute changes
The decision on which changes to execute is principally a decision for senior leadership teams. Once senior leadership teams select the business and IT change initiatives, CIOs should apply an agile approach in executing them. They can form an agile product team of multidisciplinary team members, enabling the alignment between business and IT and ensuring delivery speed and quality. In crises such as the COVID-19 outbreak, agility, speed and quality are crucial for enabling the continuity of operations.
Learn more about how to lead organizations through the disruption of coronavirus in the Gartner coronavirus resource center, a collection of complimentary Gartner research and webinars to help organizations respond, manage and prepare for the rapid spread and global impact of COVID-19.
Daniel Sun is a Research Vice President on the Gartner CIO Research team, and is based in Beijing, China. He is a digital transformation expert and evangelist, who focuses on exploring how to leverage digital technologies and capabilities to enable digital business success.
The InformationWeek community brings together IT practitioners and industry experts with IT advice, education, and opinions. We strive to highlight technology executives and subject matter experts and use their knowledge and experiences to help our audience of IT ... View Full Bio