Though the country is still battling the economic impacts of COVID-19, experts in the private sector markets are helping leaders focus on the following three areas during this recession: 1) theft and cyber risk, 2) business process automation and 3) liquidity. Brian Berning, partner, Tax Services at RSM, is seeing a lot of optimization/rationalization work as folks try to determine how they can operate more efficiently with fewer people and apply automation in ways that can help sustain them during this rough period.
“We’re spending most of our time helping our clients identify opportunities to add liquidity,” says Berning, noting that many businesses — have been severely impacted by the economic consequences of COVID-19. He’s believe the loan programs under Section 1102 of the CARES Act is just the tip of the iceberg.
“Companies are searching for answers to help them weather the pressure on cash and cash reserves, looking to take advantage of every dollar available them. It is extremely difficult to forecast cash flows during this unprecedented human health concern. The long term planning for capital investment is particularly difficult right now. Having a system and process by which to forecast cash flows, efficiently, is top of mind on many financial leaders.”
Dave Noonan, principal, Management Consulting at RSM, maintains that phase one largely revolved around business impact analysis as companies tried to figure out what just happened. Now he believes the country has entered phase two of liquidity.
“Liquidity is on the minds of every business, public or private,” says Noonan, noting that, during a recession, there’s always concern how the credit market is going to behave. He finds that people are spending a lot more time in zero-based budgeting or forecasting dynamic modeling. “Business continuity is a part of that as well as organizations that are thinking about liquidity and how they can continue to operate in an unstable state.”
In the wake of the coronavirus, clients are accelerating digital transformation via automating processes. They are not only looking where can they curve their expenditures but also figuring out where they can afford not to invest.
“The technology spin, in my opinion, has been curved a bit, but I think it’s just a redirection into other areas largely focused around process improvement,” says Noonan. “If clients can identify an investment in technology that will improve performance, reduce cost or improve revenues, then they’ll make that investment. But they’ll be more selective about which technology project is a priority now.”
The market has also seen increased instances of both theft and cyber risk.
“With people feeling under stress being home, I think we will continue see that trend,” says Noonan.
Not only are there cultural implications of having a remote work force, but it’s also changing the real estate market as a number of organizations opt not to renew their buildings’ leases in favor of shifting to a permanent remote work force.
Christine Zmich, director, Business Development at RSM, has been working with her clients to create value for their organization by leveraging technology to drive revenue, reduce expenses or mitigate risk. The majority of her time lately has been focused on cash flow and liquidity analysis, demand planning and process automation. Many of her clients are conducting a 360-degree review of their Customer Experience as they work to positively engage during a time when they cannot be face to face.
They are doing so by revisiting their go to market strategies including their website, their ecommerce, and marketing automation functions including portals, and all customer touch points.
“I have a lot of clients conducting strategic planning sessions and evaluating their business model and target operating model as a result of this post-Covid world we live in,” says Zmich. “They’re looking at their customer profitability, product offerings, supply chain, manufacturing processes, and their sales models, analyzing how they sell. Should they be selling through distributors? Selling direct? Or on Amazon? They’re looking at their company objectives and tying [them] to a digital strategy and a technology roadmap.”
Zmich has also received many requests from clients asking how they should be using their data in light of annuitizing their revenue stream through machine learning, artificial intelligence, and BI.
“They’re shoring up the quality of their data, making sure they have access to it and trying to figure out how to leverage internal and external data sources for actionable insights and a competitive advantage,” she says. “Undoubtedly, COVID has accelerated their digital transformation journey!”
RSM is located at 255 East Fifth St., Suite 2200, Cincinnati, OH 45202. For more information, call 513.619.2899 or visit www.rsmus.com.