Page Text: Capacity constraints
Cybersecurity breaches
Continued and potentially severe disruption will come as a result of Russia’s invasion of Ukraine. The conflict brings with it both localized supply chain challenges and global impacts, such as inflationary pressure and supply issues with raw materials and finished goods. Organizations will need to increase supply chain risk readiness to combat market disruption.
To counteract instability in your supply chain, immediately start creating first-tier visibility into existing supply networks. Continue to commit to and secure product supply volumes for the most fragile supply chains, and increase resilience by deploying strategic redundancies.
Manage SC Impacts
Enterprise Risk Management
The Russian invasion of Ukraine represents a moment of intense uncertainty, one that places an additional premium on risk-based decision making. Executive leaders who make defensible, risk-informed choices are more likely to navigate their organizations with resilience, from response through recovery. Geopolitical risks often move quickly and unpredictably while imposing an extensive impact on business performance. Leverage location-specific risk management strategies to equip your organization to manage these urgent threats.
Manage Risk in a Crisis
Finance
Finance leaders need to prepare for material changes to protect cash flows while their organizations navigate the operations and revenue impacts of this crisis.
Organizations with material operations and/or revenue generated in the regions impacted by the Russian invasion of Ukraine can expect to experience disruption and severe cash-flow challenges, if they aren’t already. Survival, not growth, will be the priority for organizations and will depend on maintaining cash flows and income while continuing to be innovative with technology in unaffected parts of the business.
For organizations that are materially impacted, it will be important to quarantine cash flow by assessing risk, cost and value in decision making. Also define new spend levels by identifying what you need and how much you can afford to pay for it in this harsh economic reality. Reduce strains on current cash flow by proactively canceling projects, eliminating services and reducing service levels. Anticipate spend increases in essential areas to ensure business continuity, while eliminating — or at least freezing — all nonessential spending.
Even less directly impacted organizations will face supply-chain and revenue disruption that threatens to push up input-price inflation . Mismanaging costs in this environment could rob your organization of the capacity needed to fuel its postpandemic plans.
What’s needed now is a strategic approach to managing costs related to pricing, personnel, raw material supplies, IT contracts and demand planning.
Gartner research shows three key success factors for strategic cost management : consistent use of cost frameworks across functions, clearly defined measures of success and cross-functional collaboration on cost management.
Strategic Cost Management Guide
Legal
Legal leaders have the special role of understanding the complete risk landscape beyond obvious and immediate threats. Amid urgent actions and triage, legal leaders guide their enterprises to the soundest solutions. Right now, with threats from cybersecurity rising, it’s important to be familiar with the fundamentals of cyber risk and its legal implications.
First step: Understand the key concepts underlying cyber risk to ensure you can participate in value-added conversations with critical partners across your organization.
Cyber-Risk Topic Guide for Legal
Sales
Chief sales officers (CSOs) play an important role in ensuring commercial efforts are aligned with the organization’s broader response to Russia’s invasion of Ukraine.
The first step is to determine the most appropriate next action in existing and potential relationships. Pay close attention to and create guardrails around seller-crafted messages. Today, 80% of consumers indicate a preference for buying from brands and companies whose actions align with their beliefs and values. It is better to err on the side of caution and, if necessary, temporarily halt outreach during this humanitarian crisis.
Sales teams will likely feel the impact of supply chain and logistics disruptions today and in the months ahead. Sales leaders should work with their supply chain counterparts to locate and quantify all product inventories, then conduct a vulnerability assessment and create scenario plans to assess potential impacts on sales channels, indirect partners and inventory levels. While there are few supply chain disruptions a CSO can stop, well-developed plans can mitigate the impact of disruptions and enable sales teams to quickly adjust as necessary and keep clients up to date.
Actions for Sales
Marketing
As organizations set in motion plans to react to the Russian invasion of Ukraine, chief marketing officers (CMOs) should take pains to understand the attitudinal mindsets prevalent in each market. Gartner’s global consumer survey data of the U.S., U.K., French and German markets offers a view into the cultural conditions immediately prior to the invasion and provides directional insight into how consumers may think and act in the face of this ongoing conflict.
Consumers across all four markets say they trust “big brands” more than their country’s government. This puts corporations in a highly visible position as they decide which, if any, actions to take at a moment of global crisis — at a time of growing demands among consumers, employees and other stakeholders for organizations to have a strong social and environmental conscience .
CMOs and their teams also need to leverage scenario planning exercises as a way to consider hypothetical future business scenarios now that many of the variables considered during scenario planning may have changed. Scenario planning is an important tool to identify critical uncertainties, guide near- and long-term decision making, and build organizational resilience during volatile times.
Considerations for Marketing
Customer Service and Support
The effects of the Russian invasion of Ukraine are being felt around the globe, prompting the need for customer service and support (CSS) leaders to show empathy and support for affected partners in the region, and address questions about their operations and potential implications to the business.
If the COVID-19 pandemic taught us anything, it’s that CSS leaders must assess the potential risks of this humanitarian crisis to their customers, company and business process outsourcing (BPO) partners and agents. This includes disruption caused by the displacement of workers, complete work stoppages and now, the unsettling risk of increasing geopolitical tension. This could result in lengthy delays and ongoing negative effects for operations that impact customers. CSS leaders must develop and implement business continuity plans to mitigate further disruption, recover and remain viable.
In the near-term, focus on offering support and understanding to any affected partners or agents in the region. If your organization partners with BPO vendors affected by the Russian invasion of Ukraine, confirm if they have or will move customer support to a new location. If so, determine the anticipated disruption to capacity and what communications are being delivered to customers and staff.
Demonstrate flexibility to meet business needs by shifting support to less directly impacted regions. Be willing to staff non-native language speakers, as it may be increasingly challenging for your BPO partners to source native speakers who can serve your customers.
Managing BPO Disruption
Technology and Service Providers
Outsourced software development and IT services will see significant impacts as a result of the Russian invasion of Ukraine. This is creating people and business-continuity challenges for many organizations.
Businesses and service providers with software development or other IT service centers (captive or outsourced) in the impacted region will need to take immediate, pragmatic and specific actions to manage the risks. The top priorities are:
Protect people: Place human needs above all other actions. Do all you can to protect lives, and regularly check in with your employees in affected regions. Ask how you or your organization can extend support to individuals and their families.
Protect your organization: Segregate local networks so that cyberattacks can be contained locally. When communication is needed, provision satellite phones, portable satellite data terminals or hot spots locally or regionally. Ensure appropriate country-level business continuity plans and third-party contingency plans for all other key jurisdictions from which you receive goods or services in case the conflict spreads.
Protect your information: Move master copies of all code, data, designs, documentation, test scripts, configurations and any other artifacts critical to business to servers in your home jurisdiction, protected by immutable backups. If work needs to continue in affected regions, use copies of the master data in the cloud and replicate it in home jurisdictions at least daily.
Protect your service: Invoke your downtime procedures, disaster recovery and business continuity plans, and work with your service provider to move work from impacted cities and countries to your or your service provider’s alternative sites.
Protect your suppliers: Ask service providers in affected countries for alternative payment methods that do not violate sanctions. Collaborate with your accountants and auditors to legally move money in and out of impacted countries.
Watch Gartner experts and panels discuss the key issues
Complimentary Gartner Webinars Related to the Russian Invasion of Ukraine