Challenges and costs of business continuity during a lock down

As small and medium-sized companies struggle to remain afloat and viable at a time when the Jordanian government has imposed a lockdown on virtually the entire country, fears are increasing that a large number of SMEs will collapse from the costs of dealing with the challenges.

The suddenness with which the coronavirus, labeled COVID-19, spread across the world, has forced most governments to announce severe and often draconian measures to constrain its effects. On March 17, 2020, after closing airports to all incoming passenger flights, King Abdullah invoked a defense law that granted Prime Minister Omar Razzaz broader authority. Soon, the army began deploying on the main highways leading to the capital and major cities across the country.

Most shops shut their doors in response to a government order that malls and shops close except for food stalls and pharmacies. Police later sealed with red wax stores that had defied the government decision, Reuters reported.

Caught unprepared by the speed of response, businesses not considered essential had to hurriedly put in place emergency operational plans that included asking all staff to go home, stay at home and work from there.

Business in the age of COVID-19 imposes a whole new set of challenges, as small to medium enterprises (SMEs) started to realize soon after the lockdown went into effect. These new challenges have brought additional costs to the companies’ balance sheets. These include:

Cloud operations

Most SMEs have needed to invest in large amounts of cloud storage and remote operation software to ensure that critical functions continue without interruption. Training staff to use the new software has added to the costs.

“At the same time, we needed to invest in higher bandwidth for people who are working from home but did not have high-speed internet. They may have not felt the need for it in the past, but now it is crucial for certain types of operations,” said Abdelsalam Al Khawsaneh, Chief Technology Officer at iCallerz, a company that provides call center solutions.

Network security

One of the biggest additional costs that companies are being forced to bear is the cost of security and access control. As sensitive files become available via cloud storage to staff working from home, the IT teams are putting in place systems on an emergency basis to ensure that the right file is accessible by the right person. “More than that, we don’t want the wrong file to be accessed by the wrong person, so this is critical infrastructure we need to invest in,” Al Khawsaneh added.

Communications breakdown

Inter- and intra-office communications are another challenge that companies are finding costly to overcome. There has been a rush to implement new communications technologies that leverage the higher bandwidth that has been acquired. This too has meant an outlay on training staff to use the technologies.

Call centers have witnessed especially tough challenges as they race to put in place solutions that reroute customer calls to agents’ mobile phones or home telephones. Some companies have agreed to pay the mobile and home phone bills of their staff, adding to the increasing burden on costs.

Supply chain disruptions

Small manufacturing units are facing stringent challenges in keeping operations going in the face of reduced, delayed and uncertain supplies of raw material from vendors.

“We used to have a reliable source of raw material from a vendor in China. This dried up virtually overnight,” said Tareq Al Majali, owner of a local garments factor. “After a period of disruption in our business, we are now sourcing from two new vendors from Eastern Europe and Turkey. However, this has meant an increase in costs, so we were forced to raise the price of our product in the market. Not sure whether that will be sustainable, though.”

Motivation

“One of the biggest challenges we faced in the early days of the lockdown and the work-from-home regulations relates to keeping staff motivated. It is natural for humans to slow down and take it easy while working from home. We were worried that this would make matters worse for the company,” said Hani Dirani, an HR executive at iCallerz.

The company decided to use a new communications platform it implemented to schedule twice-weekly departmental meetings and a weekly town hall for all staff. Problems and concerns are addressed at these meetings and solutions are assigned to relevant teams. Additionally, the CEO and the department heads have been asked to record and broadcast updates to their teams to keep them motivated.

Deliveries and transportation

Micro-sized home-based businesses that depend on delivering food and other products to customers have been asked by their delivery teams to provide masks and gloves to ensure that the deliveries are made safely.

“Most deliveries have become slower due to the social distancing rules. The agent has to leave the parcel in a pre-arranged spot and wait for the customer to pick it up. The agent cannot leave until the process is completed,” said Dina Hamadeh, who employs four people to run her food delivery business from home.

“At the same time, the work-from-home rules have put a serious dent in my business, as most office staff are saving money by cooking at home. The number of orders has become less than 30% of what I used to deliver when all offices were functional,” she said.

As companies in Jordan struggle to come to terms with what some people are calling “the new normal”, because no one is sure how long the world will be in lockdown while a coronavirus vaccine becomes available, business sustainability remains fragile and unknown.