There is currently a widespread concern regarding the coronavirus which has affected communities, businesses and consumers across the globe. There are several forms of general guidance regarding this outbreak that we have prepared: what business leaders in the United States should know, focusing on critical areas regarding workforce, supply chain, tax and trade, crisis management, and financial reporting. It also involves technological solutions such as data management, mobile device management solutions, and cyber security.
Most companies do have continuity plan set up, but they may not be able to address this outbreak which is moving very fast, in fact faster than they had planned for. These contingency plans are designed to help with things like natural disasters, power outages, cyber incidents, and many other problems that may arise. In general, they do not take into account quarantines, travel restrictions, extended school closures, and anything else that may relate to a global health emergency.
During this crisis, we have been faced with several unique challenges. For example, the CFO Pulse Survey of the PwC regarding Covid 19 focuses upon the top concerns of the United States and Mexico.
Crisis response and management
Areas of technology that may be affected:
As the pandemic evolves, there is a certain amount of uncertainty regarding business continuity plans.
There have been many cancellations for these businesses which are trying to develop opportunities.
Travel related results and fewer client interactions have diminished businesses greatly.
these are some of the issues that the technology industry may face:
Dealing with situations regarding contractors, delivery workers, drivers, gig workers, and also the full-time employees that currently work for these businesses.
A limitation revolving around the slowdown of recruiting new workers despite having a large pipeline of skilled workers that can help.
The risks related to cybersecurity and how this affects those that work remotely.
Supply chain and operations
These are technological issues that they may face:
Production can become extremely slow as a result of supply chain disruptions.
Problems can occur in regard to cash flow because some companies do not have the capital to handle such an outbreak and may be led to finding alternative sources for money, and also products, as we face the aftermath which may lead to subsidising.
Businesses may have to have workers work remotely, plus integrating in-store and social distancing protocols, which will lead to a higher demand for engineering and developer talent that will be needed. You must also retain the top talent that you have as it will be essential to the survival of your business.
The smart phone industry, which is a very labor-intensive business, can be highly impacted because of this outbreak. The production of smart phones has been shown to decline as much as 12% YoY in the first quarter of 2020; server revenue may also decline as much as 16%, all of which will happen in the first quarter of 2020.
There is substantial disinformation proliferating on digital platforms.
The sharing economy inventory will also be negatively affected.
There are some manufacturers that develop components which may also need to work with as many as two suppliers.
Containment zones around the world can lead to bottlenecks of shipping and delivery.
These are technological issues that this industry may face:
Workforce, operational, and also supply chain disruptions can cause financial problems such as being unable to properly record future and current reporting for the business.
There are public companies that will be under increased amounts of pressure to disclose how they are pursuing the impact of COVID-19.
Taxes and trade
The following issues may affect the technology industry:
Local and new state tax implications may affect workers that now must work remotely because of this pandemic.
Compliance with tax operations, especially for newly acquired or positioned to remote employees can lack information.
For the short term, there will be changes in income statements – especially regarding short-term losses – that will adversely affect the forecast itself.
Reconfigurations and triggers within the supply chain can have definitive tax implications.
Common issues that the technology industry may encounter:
Prolonged or sudden economic downturns can lead to significant budget cuts which will virtually eliminate discretionary spending.
If you are doing remote work, such as providing an online education, this type of social distancing will limit the effects of these services, as well as any products that are sold, especially in the tech industry.
This type of a crisis will underscore the resiliency of business models, their flexibility, and their ability to maintain cash flow as the supply chain is impacted along with commercial channel partners.
When company valuations are done, this can lead to cash rich companies, one sitting on the sidelines, maintaining their focus on becoming more successful.