Observations from EVP, Europe – Ed Winterschladen on Friday 3rd April
At Proxima, we have a long history of working with global companies to help them overcome challenges with expert procurement assessment reviews. We’ve seen everything from bull markets to deep recessions – but it’s hard to remember a period that comes anywhere near close to how extraordinary the past weeks have been.
During this unprecedented period, we want to share our procurement assessment, based on working with a wide range of businesses and conversations in the sector, on how the COVID-19 pandemic is playing out so far and what the future holds:
What happened?
- The risks were assessed incorrectly – nearly all major businesses viewed COVID-19 in January and for most of February as a Chinese supply chain issue, not a business shut down risk.
- Decisions then happened FAST – the speed at which the threat of the COVID-19 pandemic became clear left many senior business leaders taking decisions within hours or days that will have an impact for months, if not years, to come. In some cases, the need to act was such that it was accepted that making a decision was more important than making the right decision.
- Business continuity plans and risk management processes went out of the window – much time had been invested in creating these plans, but when it came to the crunch these documents were often disregarded.
- Cuts were fast and deep – many companies have made drastic cuts to their costs very quickly. The hope is that at least in the short-term this has given them breathing space.
What’s happening now?
- Change is happening fast – this is especially true in the digital space where changes that might have been rolled out over five years are now being pushed forward on a timeline of a couple of months.
- Planning is taking place for a period of uncertainty – there is a realization that it’s very hard to predict when lockdowns will end and what the next phase will look like both in terms of social restrictions (e.g., social distancing staying in some form) and consumer demand.
- Companies are realizing there is a narrow window for innovation – many company leaders are recognizing that the coming weeks offer a window of opportunity for change that will likely close once BAU returns.
What’s next?
- Q3 and Q4 will present difficult choices – it is clear that as we emerge from the pandemic marketing and sales teams will want to ramp up spend in a rush to deliver results. But while driving revenue will be vital, business discipline must not be lost.
- Eyes are already turning to another potential problem – in both the UK and Europe, noise levels are growing that the UK government continues to press ahead with the end of year deadline for leaving the transition period with the EU. The time frame for striking a deal continues to look challenging and leaving without a deal in these circumstances would could create significant problems.
- Looking to the future – now is the moment when many businesses will be looking ahead to the longer term, thinking about how this crisis will reshape society (e.g. less business travel? A greater focus on digital) and grappling with how to invest in future growth areas.
Our hope is that these procurement assessment insights will be helpful to you and your business in these challenging times. Please get in touch to let us know what challenges your facing currently.
