How Business Process Redesign in ‘New Normal’ Can Help Maximize Value
When the going gets tough, the tough get going.
The evolving and complex circumstances of the COVID-19 pandemic, including catastrophic business interruptions and related market uncertainties, have created significant financial and operational challenges for businesses. As businesses reopen, an organization’s top priority must focus on mitigating a distressed environment and stabilizing the business. Now is the time to identify current and future sources of pandemic-driven business stress, triage these risks and develop mitigation strategies to position your business for long-term success.
Businesses across industries have begun to design and implement paradigm shifts to their ways of working in response to the COVID-19 pandemic. Enterprises are looking at business processes, people, technology, and risk through a different lens and adjusting conventional methods.
“More for less” is the new norm. And this will be the mantra that will inevitably get carried forward to the post-pandemic business landscape.
Evaluate and redesign business processes
Traditional business processes and their underlying internal controls worked well during the pre-pandemic era. However, the current crisis has imposed unprecedented resource constraints on businesses and has forced them to adapt their processes to align with the new reality. Many businesses are realizing that those redesigned processes and controls are working reasonably. Changed control objectives, altered control considerations, and changing perceptions of risk have challenged the time-tested notions of internal controls and the risks that they seek to mitigate.
This is the opportune time to evaluate business process design, streamline and redesign business processes, and devise rescaled systems of internal controls that will enable businesses to be resilient during the crisis, and emerge out of it leaner and more agile. Design disruption has already taken place and this is the right opportunity to make business processes nimbler by removing inefficiencies and eliminating redundant or inefficient controls.
Leverage the benefits of automation
One memorable lesson that we have all learned from this crisis is the role technology can play in the orderly conduct of business even in extraordinary and chaotic circumstances.
Businesses that embrace these changes can use technology-driven processes as a catalyst to drive sustainability in the near-term post pandemic and scalability as they position themselves for future growth.
Using intelligent automation (aka robotic process automation or RPA) not only facilitates faster and smoother turnaround of information across an organization, but also makes it possible to use technology for some controls, therefore requiring fewer man hours to test underlying automated information technology controls for operational effectiveness. It becomes possible for the organization to redirect time, effort and resources to other activities that can add more value to the business and its clients.
Facilitate collaboration through remote working
People working well individually and in teams have always contributed to organizational success. The pandemic has brought to the forefront the realities of remote and hybrid working, sustained group collaborative effort from various locations, and seamless offshore processing.
This is quite likely to be the norm in the evolving business landscape. If businesses augment the processes of remote and hybrid working by implementing well-designed controls, they have much to gain in terms of increases in productivity, process efficiencies and cost savings due to reduced travel and overhead.
Comply with regulatory requirements as before but with heightened focus
Notwithstanding the pandemic-related disruption, companies continue to be responsible to shareholders, investors and others that are interested in their financial information. The regulatory spotlight in recent years has been on complex business processes and higher-end controls, particularly those involving estimates, judgments made by management and transfer of timely and complete information among disparate systems.
After making their business processes more agile and deciding on the key internal controls to keep in place, management can focus its efforts on strengthening higher-end controls to financial statements and meet regulatory requirements.
Leverage opportunity while containing risk
During the pandemic, when the world was halted in its tracks quite unexpectedly, businesses may feel the need to do whatever it takes to survive.
In the post-pandemic era and beyond, the competitive landscape, the significantly altered business models and the tectonic shifts in working, while appearing at first to be daunting challenges can be overcome by redesigning processes and controls with a focus on “getting more done for less.”
A well-thought-out and implemented risk identification, assessment, mitigation, and management strategy would be the much-needed panacea and should be part of a business continuity plan for organizations to confidently leverage opportunity post-crisis. Businesses can take steps to protect – and enhance – enterprise and stakeholder value in a controlled and responsible manner through business process redesign.
Identify risks continuously and deploy sound risk mitigation measures
Companies will do well to continuously review exposures and figure out smart strategies for mitigation. There could be risks to the organization due to third-party resilience risk, supply chain disruption, employee health, cash flow management, regulatory changes, operational gaps, increased cyber vulnerabilities and economic setbacks.
Effective risk mitigation strategies must address and prioritize risk factors, realistically assess current levels of organizational preparedness, plan scenarios and consider the business impact of interruptions, design/implement internal controls and devise plans for management of incidents.
Schedule a meeting with our risk advisory services team for a practical discussion about helping you get the most out of your business process redesign efforts, and a risk assessment laser-focused on resilience, mitigating a distressed environment, and positioning your business for long-term success.
Chandrasekar Venkataraman, CITP, CFF, ABV, CIA, CISA, CFE, CIRA, CM&AA, is a Risk Advisory Services Director of Corporate Governance at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.
Ivan Garces, CPA, CFF, CFE, CAMS, is a Management Principal- Chair Risk Advisory Services at Kaufman Rossin, one of the Top 100 CPA and advisory firms in the U.S.