In January, Blue Star, a maker of air conditioners, air purifiers and water coolers, set up what Chairman Shailesh Haribhakti calls the "information war room", a place where half-a-dozen people feed in data, which is then accessed by the company's key decision-makers. The aim was to track movement of every ship from China to make sure the company is in a good position in terms of supplies as soon as factories reopen. Like most manufacturers who depend on China for critical parts, Blue Star, says Haribhakti, "gets a lot of compressor parts from China. So, it is very important for us to monitor their availability." Going ahead, the war room will be an integral part of the company's business continuity planning, he adds.
Business continuity planning - the process involved in creating a system of prevention and recovery from potential threats - has assumed a central role as India Inc. looks to restart operations post the lockdown imposed to check the spread of coronavirus. The aim of the planning is to ensure that personnel and assets are able to function quickly in the event of a disaster. Business Today spoke to a range of leaders from different sectors, including automobile, information technology (IT), fast-moving consumer goods (FMCG), consumer durables, milk, pharmaceuticals, healthcare and education about how they plan to keep their businesses safe from future disasters. The virus seems to have taught companies a lot about components that every business continuity plan must incorporate.
The Key Aspects
"We have to think of information as the all-empowering resource. Any business continuity planning will need to take this into account," says Haribhakti. While remote working has been the preferred mode for some, there are other aspects too. For instance, a company is looking at onsite housing for critical operations staff and a consumer durables maker is seeking to automate more, adding a layer of monitoring for every sourcing option and tracking market diversification. The planning ranges from new ways of looking at strengthening the IT infrastructure to keeping a closer tab on discretionary spending and new sourcing strategies, apart from backward integration.
"At Blue Star, we will look for multiple sources to complete the value chain. We will also look at the possibility of backward integration and local production within India and create that kind of risk mitigation to ensure business continuity. This is because if a critical input of your production is not available in the country and the only option is to import it from a single country, backward integration becomes important," says Haribhakti. Before that, the company is working on factory reopening, which means planning for safe working conditions, ensuring that employees practise physical distancing. Also, "since manufacturing cannot have work from home, we will have to look at more areas for automation and some areas that can be monitored remotely. We will look for those opportunities on an ongoing basis. This will lead to better productivity," he says.
The head of a large auto firm in India told Business Today on condition of anonymity: "Globalisation is dead. You cannot export freely now, and if you want to sell to a country, you will be asked to make it locally. Nobody will depend on China or any one country as the single source for anything. Preference will be to make at least 60 per cent of what a country needs locally." This, he says, is going to be an important component of business continuity planning. This leading business head, who now takes part in three to four video conferences a day, compared with just one a week earlier, says, "First, you need to worry about your cash and people. Make sure you have cash to survive and all your people are safe. Profit and business will follow. The current situation will probably take six months to blow out." He points out three important components that companies will have to start working on - Firstly, flexible working practices, as everybody need not come to work to be productive, aided by lesser time spent on travel. To begin with, one could start planning for five days work from home in a month. Secondly, travel and related expenses have to be significantly lowered. And finally, business continuity will have to factor in reduced dependence on China as a major supplier, particularly in medical equipment and healthcare. In manufacturing, he says, a lot of research and development, finance and human resource-related work can be done from home.
What's in and What's Out
Agrees Swati Piramal, Vice Chairperson of the Piramal Group, which is into pharma, financial services, glass and real estate. Taking time off between the 10-odd conference calls from home that she does every day, Piramal says her group has taken well to the work from home format. "Our meetings have become shorter and nobody is wasting time. Everyone is direct and to the point." The group, she says, will include work from home in its business continuity planning going ahead, to bring in greater efficiencies and reduce costs. Travel bills will definitely be reduced. Even discretionary expenditure will be cut. Unfortunately, it will affect many industries such as hospitality, jewellery and clothing. But then, Piramal also sees new opportunities in sectors that have been hit hard. "What we have seen from data coming from China is that real estate has picked up and so has purchase of cars. The reason being that people do not want to use shared services, be it rented homes or ride-hailing cabs," she says.
Beyond WiFi and Network Adapters
Most IT companies are listing measures that need to be an integral part of business continuity planning. These include strengthening IT infrastructure at homes of key employees, stocking WiFi and network adapters for emergencies, allowance for broadband expenses that employees may need to incur at a short notice and finding ways to optimally scale down information technology-enabled services operations while meeting customer needs.
Nasscom Chairman U.B. Pravin Rao says while it may be a bit early to spell out the specifics of what IT companies will do to ensure business continuity, "work from home is becoming a part of business continuity planning now. Earlier, business continuity planning used to factor in elements of working from some other centre in case of an emergency or natural calamity, but did not factor in a countrywide lockdown. Going forward, a considerable amount of work from home is likely to become acceptable to clients as well."
And it is not just for the IT sector. Even in sectors such as consumer durables, there could be new challenges. To address this, Voltas, a Tata Group enterprise, took to uploading "Do It Yourself" videos on YouTube to help customers with basic maintenance due to suspension of call- centre operations during the lockdown. Also, its operations and maintenance teams across India got down to providing support to "essential services" sites where customers needed operational, maintenance or breakdown support. The company, like many others, is leveraging technology to ensure business continuity. A virtual meeting room has been set up to ensure smooth functioning with help from Cisco. Elsewhere too, innovations are happening. For instance, Japanese companies Transcosmos Inc. and Transcosmos Online Communications Inc. on April 20th announced a "LINE-powered Business Continuity Planning package" designed for contact centres. It enables businesses to offer emergency chatbot services that will help businesses swiftly open support channels using LINE, a freeware app.
Break From the Past
Going forward, business continuity planning will need to focus on diversity of operations, where one facility is not completely dependent on a single activity, says R.S. Sodhi, Managing Director, Gujarat Cooperative Milk Marketing Federation, or the more popular Amul. Sodhi, who is getting used to four-five video conferences per day and face-to-face digital interactions with around 450 people across the organisation in just about five days, says: "We have learnt not to be dependent on either one distribution channel or product category. You need to have products in different baskets." For instance, he says, since none of the Amul plants was exclusively for ice-creams, "we could divert people to other operations." This flexibility, he feels, will become increasingly critical in business continuity planning. Echoing this, Dodla Sunil Reddy, Managing Director of Hyderabad-headquartered Dodla Dairy, says: "The focus will be on having a small team of people stationed at the manufacturing site, so that during emergency, the critical operations staff is available onsite."
So, it is clear that what worked in the past will now be looked at afresh, and not all of it will stay. A case in point is a recent article, What the Shift to Virtual Learning Could Mean for the Future of Higher Ed, published in the Harvard Business Review, written by Professor Vijay Govindarajan, the Coxe Distinguished Professor at Dartmouth College's Tuck School of Business, and Anup Srivastava, Associate Professor at Haskayne School of Business, University of Calgary. The piece raises questions such as whether students really need a four-year residential experience at all, or what kind of improvements in IT infrastructure, faculty and student training will now be needed for digital engagement.
The Hybrid Model
So, while there are business continuity issues in sectors such as education that need to be looked at, there are also solutions that are emerging. On April 10, stranded in Hyderabad during the lockdown, Srinivas R. Pingali, Professor of Business Policy and Strategy at IIM Udaipur, ended up playing a part in what could well become the first experiment at hybrid teaching by the institute. Between 11 am and 1 pm on a Friday morning, Pingali conducted a session on "digital transformation" in a format that combined instructor-led online teaching with a self-learning programme on online learning platform Coursera. Janat Shah, Director of the institute, who worked with Pingali to get this off the ground in a matter of three days, told Business Today: "The one big lesson learnt is the need to have all students and faculty prepared to move online at a very short notice." He is confident it will work, and cites examples of successful interventions globally like when the Singapore Management University took to strengthening the online medium during the SARS outbreak in 2003. "Typically, in most IIMs, there are 15 courses in an academic year and each course has 20 sessions. We at IIM Udaipur want to have at least one online session in each of the courses going forward."
The transition to a new normal is throwing up fundamental questions. While for clients, operations will mostly be seamless, will the nature of people engagement become highly transactional, driven by the here-and-now needs of companies which need to buy stuff, process it and move it? Compare this with the pre-coronavirus era when the purpose of travel was also to understand people, engage with them and build an emotional connect. Without sitting across a coffee table and chatting and understanding each other, will leaders be able to motivate, inspire and get people to deliver? Can all of this happen in a Zoom-enabled world? An FMCG industry veteran feels the post-coronavirus world will not be an "either-or case" and will perhaps be a nuanced mix of both.