A New Post-pandemic Business Recovery Model

Globally, enterprises today are in the post-pandemic recovery phase. This recovery is marred by new challenges in the form of supply chain disruptions, workforce availability, and worsening climate crises. The ability of an enterprise to adapt quickly to disruptions, while at the same time maintaining business continuity and operations has become critical. Building business resilience involves financial, operational, strategic, and leadership elements.

The pandemic showed how enterprises were vulnerable to demand shocks and supply chain disruptions. Seven out of ten organizations reported that they are planning to increase their investment in building resilience1. However, there was also disruption in the way service providers rendered their services to the end customers.

Disrupting pre-pandemic operating models

Before the pandemic, the entire governance was oriented toward managing people in offices, measuring, and rewarding them based on the tasks assigned to them. The pandemic has turned this operating model of work on its head. It has taught service providers that they must now closely align with the businesses of their clients. A large part of the team will have to work along with people who are client-facing, often cutting across geographies.

Another common trend before 2020 was that business resilience for enterprises was largely limited to achieving financial resilience. This trend is now evolving. A survey by McKinsey2 suggests that top executives have moved away from the past practices of risk management that were focused on a small number of well-defined risks, mainly financial risks. The executives say their approach to risk now encompasses a broader mandate of resilience management woven into their long-term resilience strategy development. Over 60 percent of the executives surveyed say their organizations have excellent resilience capabilities. Operating models were much simpler pre-pandemic. As service providers, we used to send a team across borders to coordinate with the client, but this model has changed. It has become a lot more inclusive, with teams across borders working seamlessly with the client with improved agility.

Exploring a collaborative operating model

For Mphasis, business resilience is not only about being available for the client undergoing a digital transformation, but also about delivering end customer outcomes. When we were helping a large financial conglomerate integrate its data warehouses and shift to the cloud, we formed a composite team, along with the client and created an operating model. A lot of our leaders are now based out of the client offices cutting across different geographies. The aim is to capture customer understanding and their requirements much better.

In this new operating model, the teams of the customer and the teams of the service provider now come together to problem solve and innovate. The way in which the operating models are created have also changed. It provides an inherent resilience especially, where the work requires service providers to look at the clients’ end-customer experience. ?

The coordination between the service provider and the client has become agile and seamless. Having in place common platforms and measurement criteria enables seamless handover between the delivery centers involved, and measurements of common outcomes.

A redistribution of key resources, knowledge workers, and leaders has become a part of the contracting to deliver outcomes. The trend also involves the service provider absorbing some of the client’s key people into roles where they help ensure that transformation outcomes are not endangered.

Adapting to change

The new operating model presents its own set of challenges. It is vital that the change management is worked along with the client because it has implications on the service provider’s organization structure. The defects that arise out of deliveries can best be resolved by using client resources, which was not possible in the pre-pandemic era. Because of the business criticality of transformation, the clients are happy to have some of their teams work with in close contact with the service providers. Their subject matter experts become available for us to resolve a problem and remove blocks, which will allow us to move fast.

Often, in a fixed price financial contract, not every cost gets discovered initially. Having an open dialog with the customer and working along with them as a team thus becomes important for the service provider to resolve price issues. The ability of both sides to be flexible and to work collaboratively becomes critical. Otherwise, it ends up in a logjam, which takes a lot of time and effort to resolve.

Achieving resilience

The culture within an organization plays a key role in achieving resilience. Businesses with healthy cultures provide three times greater total returns to their shareholders. It is sobering to think that over 70 percent3 of business transformations largely fail due to people and culture-related challenges.

It requires clients to study the evolved markets in North America and Europe where the digital transformation is already taking place. The client acceptability to test out operating models that help build resilience is important. The C-Suite executives have a major role to play here as they are best suited to leverage and stitch together the best of what the service provider has to offer. Organizational culture and leadership are bonded together and play a key role in achieving business resilience.

1 Global Crisis Survey 2021

2 From risk management to strategic resilience

3 Establish a performance culture as your “secret sauce”