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March 20, 2020
By Trey Johnson
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In light of today’s launch of the Do Good with Data program, our Chief Evangelist Trey Johnson sets out his thinking behind the project.
“No Man is an Island” and the subsequent words of John Donne have never rung more loud or true than in the face of the COVID-19/Coronavirus pandemic. Mankind is facing threats it has never seen as this virus, which initially moved from animals to humans and then mutated further attacking the physiology of infected human beings, mounts a full, indiscriminate attack on humanity.
In the same way that humanity is under attack during this pandemic, so too are our businesses amongst us, many of which will not be in a good position to fight off the effects of the virus. And while humanity may recover quickly from their exposure, the sustained damages and prolonged recovery for businesses is very concerning.
For us at ZAP, like many of you, COVID-19 is personal on every level! Our employees are located in many countries and our global portfolio of customers are in dozens more. On top of this, ZAP largely serves the medium business segment or ‘mid-market’, a business segment which will likely suffer greatly for the duration of the pandemic and long after.
Sources like COVID-19: Implications for Business, March 2020, Executive Briefing set out very clear scenarios of economic impact but we are still in the midst of trying to determine when it will actually end and considering three different outcomes:
“The scenario assumes that younger people are affected enough to change some daily habits (for example, they wash hands more frequently) but not so much that they shift to survival mode and take steps that come at a higher cost, such as staying home from work and keeping children home from school… This scenario also presumes that the virus is seasonal…”
“The biggest factors are a fall in China’s GDP from nearly 6 percent growth to about 4.7 percent; a one-percentage-point drop in GDP growth for East Asia; and drops of up to 0.5 percentage points for other large economies around the world. The US economy recovers by the end of Q1 (of 2021). ”
Here in Florida (where I’m located), bars have closed, schools have closed, beaches have closed, even Disney has closed. Social distancing is important and we’re likely not anywhere near the peak of outbreak.
“This scenario sees much greater shifts in people’s daily behaviors… The resulting demand shock cuts global GDP growth for 2020 in half, to between 1 percent and 1.5 percent, and pulls the global economy into a slowdown, though not recession.”
A ‘global slowdown’ may be the nicest economic impact that we can hope for. Virtually no local economy can escape from the reality that the goodness we had a short time (weeks/months) ago may not be back for some time.
“This scenario is similar to the global slowdown, except it assumes that the virus is not seasonal (unaffected by spring in the northern hemisphere). Case growth continues throughout Q2 and Q3, potentially overwhelming healthcare systems around the world and pushing out a recovery in consumer confidence to Q3 or beyond. This scenario results in a recession, with global growth in 2020 falling to between –1.5 percent and 0.5 percent.”
Sadly, some of our global economies are going to feel more like a recession than a slowdown. The McKinsey & Company report aligns with many of the challenges I feel businesses will face in light of the pandemic.
So with all of this challenge, what is our view on what this ultimately means? What problems will businesses face?
The challenges of many supply chains are going to be rooted in the re-starting of supply from China and the inherit confusion facing many supply chain managers when it comes to availability and customer demand. For most businesses, the need to immediately stabilize their supply chain may be challenged by some of these aforementioned impossibilities. In addition, as McKinsey noted in their briefing, the shock of having NOT YET experienced disruption due to the initial Chinese shutdown (less likely as time goes on) can create ‘whiplash’ for a business.
This is the primary vehicle for weathering the storm. It will be the motivator to ensure Accounts Payable and Accounts Receivable are optimized. Reductions in cost (and force) are a strong consideration. Uniquely, the Mid-Market served by ZAP is not always aligned with reports like these from McKinsey but an area we often see, and may see MORE as organizations are pressed to the brink of survival is Mergers and Acquisitions. Well-positioned companies may use this period to grow, moderately positioned companies may merge and those poorly positioned with good residual value, will be acquired. Each of these positions requires different insights and the challenge of companies being brought together during this time may be unimaginable!
Amazon is hiring thousands of new staff, while hospitality organizations are laying them off at the same pace. It’s too early to know what demand is or how to 100% optimize expenditures to meet the demand. Customer Behavior and Consumer Demand is very likely to change as a result of COVID-19 creating a prolonged change of lifestyle. Welcome to the need for better information and analyses!
And if Supply Chain, Liquidity and Customer Behavior aren’t enough of a common denominator, the internal state of businesses will need acute quantification, too!
All of the above (along with COVID-19) introduces changes in staffing while displacing staff into alternate ‘Work from Elsewhere‘ settings, all with the need for the business to quantify if people are able to focus and produce results. But more than just looking at the performance of people, there’s also a critical need to get out in front of leading (or advanced indicators) of WHEN and IF the business is getting better! Many organizations will need all of these insights to better address/quantify the economic impact, especially in scenarios requiring governmental or external Recovery Assistance!
First off, your business doesn’t have to be an Island!
At ZAP, we are fortunate to be part of a large ecosystem of businesses including technology partners, sales partners, sister companies, consultants and customers. One such ecosystem is the Sage X3 community, where ZAP is a technology partner to Sage, particularly for their Sage X3 product. In this mid-market ERP ecosystem, like the others we serve, ZAP and our ZAP Data Hub product, is used by Sage X3 customers under the name Sage Data & Analytics (SD&A). SD&A, which is well documented on the ZAP and Sage websites, delivers a robust Data Warehouse, unlike anything else available, from Sage X3 and a customer’s other data sources. This data warehouse is augmented by a full range of analytics, dashboards and reports which support the areas of challenge I’ve covered above.
For example, the data and analytic solutions needed to manage Supply Chain during the period of exposure, impact and through the recovery include:
We have already touched briefly on some of the required aspects of solving for the financial points of exposure for the business. Comprehensively, the data and analytics solutions needed here include:
We also simply know if you were to follow the advice found in the McKinsey Executive Briefing, there is a whole range of ways ZAP can “Do Good with Data”:
Do Good with Data is announced today on our news pages and to will be shared by Sage and Partner staff throughout the Sage Ecosystem. Initially, this provides the ability for any existing Sage X3 Customer to measure and manage their business for 60 days using (ZAP’s) Sage Data & Analytics product free of charge. ZAP will provide a straightforward “Free Use” agreement, on a first come first served basis, that grants:
Where will the software run?
The software can run for free in the customer’s infrastructure (on-premises) or they can pay a nominal monthly rate to use the ZAP Cloud infrastructure. Sage X3 partners and customers will soon have ZAP’s hosting costs available on the Sage X3 pricelist. This cost will be the basis for calculating monthly hosting costs.
What if a customer needs additional help or wants a custom analysis?
Customers will have direct access to many free educational resources, ZAP will conduct open virtual “office hours” weekly and any pay for consulting services will be 50% of their normal cost.
To learn more about how ZAP will help you “Do Good with Data” in these uncertain times and to take advantage of this free of charge program, please contact us via firstname.lastname@example.org. You can also mention Do Good with Data when you request a demo of ZAP Data Hub on this site.
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