How should companies prepare for the resumption of activities?

At the opening of the webcast “How companies should be equipped for the new times: Crisis management, resumption and labor issues”, held on April 14th by ABES in partnership with KPMG, Rodolfo Fücher, president of ABES, spoke about the fourth industrial revolution and the importance of, in the current context of the pandemic, looking a little at our history and seeing how conflicts drove innovation, including the expansion of large-scale aircraft manufacturing and use, the development of electronic components, and the creation of easy-to-cook foods, such as instant noodles. “What we see is that the challenges throughout history bring some benefits and the current war that we are experiencing with this pandemic has already stimulated the digital transformation. The software industry has played a great role and sustained the continuity of services in the midst of this storm, allowing for the holding of webinars, opening bank accounts, distance education, among other activities ”.
 

Rodolfo also recalled the importance of Brazil, which is positioned among the main ICT and Services markets in the world, has more than 140 million internet users and a population connected to social networks. Despite the current data and the potential for expansion, the executive recalled that the software sector is made up of many micro and small companies, which need to deal with the impacts of Covid-19 on business, with the increase in defaults, the drop in the number new customers, added to the weight represented by tax costs on the payroll.    

Importance of communication

Regarding the different effects of the crisis and how companies should be equipped, André Coutinho, KPMG's leading partner in South America and Brazil, pointed out that we have a scenario marked by unpredictability and concern, and entrepreneurs should be careful with resumption, a process that requires planning. The executive highlighted the importance of crisis committees on expenses and investment in communication with the market and employees. Make here the download the presentation made by KPMG.

For KPMG, the sectors most impacted by the pandemic have been travel and tourism, entertainment, traditional retail, as well as automotive and some segments of the real estate sector. The industrial sectors have great challenges due to the effects on the supply chain and the restrictions on the presence of employees on the production lines. In this current phase, initiatives that help maintain cash flows, reduce costs, promote remote work, transform business models for online services and seek alternatives for supplies and operations are very important. "The adoption of these measures also aims to avoid layoffs as much as possible, especially in the most impacted sectors", he stressed.

Different patterns of resumption

In the sequence, Dustin Pozzetti, leading partner of Technology, Media & Telecom at KPMG, highlighted that this has been a period of great learning. According to the executive, the resumption of the crisis may follow four possible patterns of resumption: 1) Growth: sectors such as online retail and software development for remote communication that are growing and will continue to grow, with greater resilience. He cited the example of Amazon that announced the hiring of 100,000 people; two) return to normal in some sectors after the fall of business due to social distance. They tend to recover more quickly, like financial services; 3) sectors that will need to transform in order to emerge from the crisis, such as tourism and leisure and oil & gas; 4) Restart: for sectors that, in order to recover from COVID-19, will need to reinvent themselves, as demand will remain low after the pandemic, with insufficient capital to avoid a prolonged recession, such as sports and aviation. Pozzetti recalled that software companies that are vertical will suffer more, that is, with businesses concentrated in any of these sectors that will have a more difficult recovery. 

Software companies

Felipe Catharino, leading partner-director of the Technology & Software segment at KPMG in Brazil, that customers of software companies are undergoing profound changes in priorities, which can affect the provision of services, that is, the change of plans is a important challenge to be faced. He explained that the behavior of the resumption will vary according to the segment in which the software company operates: development; distribution and services; security and platforms. Services related to the maintenance of technological infrastructure, for example, may be highly demanded in this period, but new projects may be postponed. "In any case, software and technology companies have never been more fundamental," he said. The executive also pointed out that the market is experiencing a trend of greater offer of applications and platforms at no cost to customers (fremium). On the other hand, it will be a challenge to convert these people and companies that have tried the resources for free into paying customers.

Federal government measures

With regard to crisis management and the implementation of a business recovery plan, Luis Navarro, managing director of Risk Management at KPMG in Brazil, said that companies were not necessarily prepared to deal with a crisis of this magnitude and, thinking that crises may reoccur, organizations need to assess some dimensions of the business: governance standards; the performance of the leaders; the infrastructure; The technology; the communication; to people; and risk and crisis management. 

Valter Shimidu, partner in the Labor and Social Security area at KPMG in Brazil, concluded the webcast and talked about the alternatives to reduce the cost of the payroll. He commented that he sees a real concern of businessmen in avoiding the dismissal of personnel; and he also highlighted the importance of making labor and social security relations more flexible, including for the implementation of teleworking quickly, without having any legal obstacles involved. Within the measures announced by the federal government that help with the cash flow, Shimidu cited the postponement of the INSS payment due in March and April for payment in August and October; the 50% reduction in the S system rate; and the postponement of FGTS payments for the months of March, April and May to July, with the possibility of paying the amount in 6 installments.

Watch the video webcast on ABES YouTube channel.
Make here the download the presentation made by KPMG.