Companies Must Plan Ahead to Mitigate Operational Risks Amid Crisis

As the global crisis continues to unfold, companies must prioritize planning, risk management, cost control, and divestment decisions to ensure their survival. In a recent report, Accenture highlights four key areas that businesses should focus on:

Scenario Planning

With uncertainty at an all-time high, scenario planning is crucial for companies to anticipate potential outcomes and make informed decisions. This involves building a rapid scenario modeling capability using:

• Intelligent automation
• Machine learning
• Spanning the entire enterprise (customer demand, financials, workforce planning, supply planning)

Operational Risk

The crisis has significantly impacted operational risk profiles, with five major dimensions affected:

• Market risk
• Credit risk
• Liquidity risk
• Foreign exchange risk
• Country-specific risks

Companies must review exposure across all of these dimensions and set up controls for new threats based on analysis of cyber intelligence.

Cost Reduction

With rising costs and inflationary pressures, companies must take immediate action to reduce their cost structure. This includes:

• Scanning the value chain
• Taking inventory of general costs
• Implementing cost-cutting measures such as:
  • Reducing capacity
  • Deferring or spreading discretionary expenditure over a longer period
  • Smarter procurement
  • Outsourcing opportunities

Divestment Decisions

Many businesses have already made the decision to suspend or discontinue operations in Russia, while others are considering permanent withdrawal from the country. Companies must carefully evaluate their financial commitment in the market, consider legal and regulatory implications, and prioritize employee support and well-being.

Conclusion

In a rapidly evolving global landscape, finance and risk leaders must bring clarity to their companies by focusing on these four critical areas. By doing so, they will be better positioned to assess vulnerabilities, contain costs, and drive growth.

Disclaimer

This report is for general information purposes only and does not take into account the reader’s specific circumstances. Accenture disclaims any liability for the accuracy and completeness of the information in this document and for any acts or omissions made based on such information. Readers are responsible for obtaining professional advice from their own legal counsel or other licensed professionals.