The COVID-19 outbreak, also known as the coronavirus, is causing many problems for businesses, consumers, and communities situated around the globe. The following general guidance is prepared for those that want to know more about COVID-19. Business leaders in the United Kingdom ought to focus upon certain aspects of the business world including tax and trade, the workforce, the supply chain, crisis management, and overall financial reporting.
Business continuity plans are prepared by most companies, yet they are not going to be able to handle COVID-19 and all the problems that this outbreak can bring. They are hoping that they can ensure effectiveness in business operations, similar to how they would deal with power outages, cyber incidents, and many other problems like natural disasters. However, they will not take into account what widespread quarantines will do, or how school closures will affect communities, and if you add the travel restrictions that are in place, a global health emergency is certainly taking shape.
This crisis brings us new and unique challenges. The PwC’s COVID-19 inaugural CFO Pulse Survey and analysis has shown that financial leaders in Mexico and the US have shared many top concerns.
Proper Response and Crisis Management Issues
Issues that the technology industry may encounter:
- The type of preparation and planning that businesses have today do not take into account how a pandemic can cause a certain amount of uncertainty.
- These industries are going to have many cancellations which means fewer business developments may occur.
- Business travel is also going to be greatly diminished, which will lead to client interactions that will be minimal.
Issues that any business in the technology industry may face:
- If business as full-time employees, part-time employees, contractors, delivery workers, retail staff, or people that work as gig workers, staffing concerns are certainly going to arise.
- Recruiting new employees is going to be much slower, which indirectly means the future pipeline of finding highly skilled workers will also be adversely affected.
- There will be an increase in cybersecurity risks and for those that are working remotely from their home.
The Supply Chain and Operations
- Problems that the technology industry may encounter:
Production will slow down in regard to the global supply chain.
- Undercapitalized companies will see cash flow challenges that will require finding new sources of cash flow which may include subsidizing during this time and following in its aftermath.
- As businesses look for new ways of doing business, and address remote working in social distancing, they will need a whole host of new alternatives related to finding engineering and developer talent that will potentially increase. You also need to focus upon keeping your top talent with your business.
- There is going to be an impact on the smartphone industry because it is highly labour-intensive, as it supplies a large number of components for those that put phones together. In general, the production of smartphones has been in decline in the first quarter of 20 20 x 12%; it has also been shown that server revenue is bound to decline as it did in the first quarter of 2020, which revealed that it declined 16%.
- There is a proliferation of disinformation on digital platforms.
- The sharing economy related to inventory will also be affected.
- Manufacturers of components that are needed may have to come from more than one supplier.
- Containment zones around the world can lead to bottlenecks in delivery and shipping.
- Issues that may be faced by those in the technology industry:
Workforce, operational, and different types of supply chain disruptions can trigger problems in financial supporting now and in the future.
- There are going to be companies that will face the pressure of disclosing these revised guidelines, which will affect them because of COVID-19.
Tax and Trade
- Technological industries may face the following issues:
Local and state tax implications, which are new, will arise because of remote working which is leading to a crisis.
- Lagging tax compliance operations, as well as access to timely information, can affect these remote employees.
- The short term problems, such as changes on income statements, as well as short-term losses, can affect the forecasts as well.
- You may see supply chain reconfigurations which can trigger tax implications that will be hard to deal with.
- There are many issues that the technology industry could face right now:
The prolonged 10 sudden downturn of the economy can lead to budget cuts or the elimination of discretionary spending.
- Online education, remote working, and also social distancing can create a need for certain products, and even services, that must be delivered during this crisis by the tech industry, such as Fusion Voice and Data products.
Flexibility really is the key to maintaining a resilient attitude, and this may also lead to cash flow forecasting that will increase and impact commercial channel partners and supply chain participants.
The valuations of companies will soon become much more attractive, especially for the acquisition of companies that are cash rich, and ones that have been sitting off to the side and are also keeping their targets in mind.