Steering your ship in times of trouble.

US Navy film footage May 11, 2017

The stunning image is of the 30-year old 104,000 ton USS Abraham Lincoln undergoing sea trials in the Atlantic Ocean after a major refit. For the short video from where I clipped the image, go here https://youtu.be/EtkpDV6Gq0c, and to see it in "real action", check out the the soon to be released sequel, Top Gun:Maverick!

Watching this and thinking of the systems that are operational onboard this ship, from its nuclear power plant, weapons and defence systems, launch and recovery systems for 90 odd aircraft and helicopters, aircraft refueling, storage and maintenance, welfare and management of almost 6,000 crew and aircrew, navigation and communication over thousands of miles, and much, much more. It is truly impressive.

That "Abe" is undertaking this extreme manoeuvre demonstrates what the commander expects he or she will have to undertake to avoid real danger. Considering the mass and speed of data merging to trigger the course decisions, and the multitude of other consequential actions required as a result, is a little mind blowing. Every response is a key decision, mostly made by people, albeit highly trained and well informed.

I could stop the military references here, but the coronavirus pandemic has thrown the world into an almost war-like crisis. We are all in this and, as people and businesses, we are responding in the best ways we can. Intense unforeseen and new lessons are being learned, in real time. This is not a drill.

Are you able to see clearly where your rapid turning manoeuvre puts you in respect of your intended navigable route?

With the three months of UK lockdown milestone now passed and the shocks to businesses still being absorbed, I’ve set out a few questions you may wish to contemplate for when the storm winds of COVID-19 are suitably calmed.

My questions are:

• Have you identified all the information you need to confidently steer your business, and do your current systems support or provide a requisite depth of analysis?

• How is your data gathered and communicated, and do your systems provide a consistent, unmanipulated and seamless flow of data?

• Is information being relayed fast enough to where it's needed for hard course changes and actions?

• Are the people in their various positions (whether temporarily WFH or not) actively assigned, and do they have the appropriate tools to do their jobs?

• Are you able to see clearly where your rapid turning manoeuvre puts you in respect of your intended navigable route?

Some indicative answers from past client audits are telling, but not unexpected:

1 Many clients identify their KPI's to include client revenue, utilisation, job (or project) profitability, and overall company profitability. Few respondents ever mention the balance sheet, e.g. current ratio or the similar AR/AP ratio, although in fairness all have developed some form of hand-crafted cashflow forecast. A lot of KPI's are calculated manually in Excel. In one example, job profitability is determined by downloading invoicing and cost data from a basic accounting system, which together with time from another separate online time app, is summary-line keyed into an Excel-based project tracker. This is a time-consuming exercise, prone to error and they've already been torpedoed by the time the hard evidence of over-servicing or under-estimating is revealed. What other data do you need?

2 Every business transmits data across multiple systems, and indeed there is no "one system". However, systems are not connected so data is entered manually in often more than once and people are trained on (and may only be concerned with) their part of the process. Simple things like job names are typed ever so slightly differently from one system to the next, a supplier can be set up twice. Time is entered haphazardly into “buckets”. These might not be major issues in isolation, but when you are tracking a brace of Exocet missiles coming at you, which one represents the most immediate danger? How fixated is your client that your invoice details match exactly up to their PO, or worse a billing rate or total is misquoted on your Excel estimate? A recent McKinsey article, "Digital strategy in a time of crisis" (see https://www.mckinsey.com/business-functions/mckinsey-digital/our-insights/digital-strategy-in-a-time-of-crisis#) explores the bold steps a move to virtual operations entails and advises among other things, a quickening of data reviews and a focus on technology. The article pointedly asks:

"Where are the breaks and crashes happening as 100 percent of your interactions with customers, employees, and business partners go virtual?"

As our summary of audit results shows (see below), Excel is almost universal in being the front and back-end of systems "stacks" and, great as it is, it's rarely connected and so represents major clinks in their overall chains of data command.

3 We all have mission critical deadlines and that these are achieved in the current environment is testament to the skill and dedication of your crew. Yet companies still take two weeks, sometimes longer to close their hatches (sorry, books) at month-end. Waves have crashed over the bow, lower decks are flooding, energy and resources are spent pumping water out. In these scenarios, we’d say you need to map your existing systems layout, analyse the data structures and processes that support data flows from one system to another, and find solutions to speed production of key operational and financial information, for real-time and formal weekly review.

4 Virtual working has been brought on by necessity and it will play role in business life for the foreseeable future. Some business leaders, like Sir Martin Sorrel, are sceptical it will be engrained permanently. He does however firmly endorse the view the current crisis will “accelerate the digital revolution”. “If you have historic costs to write off, get it out of the way now and accelerate your digital transformation,” he said recently speaking on Sky News. Of course, this is easier said than done when companies are worried about cashflow and hesitant to invest, but vendors are businesses too who are also responding to the crisis. There are some good deals out there, and this is a good time to consider just what your requirements are and get the right combination of systems to steer your ship.

5 With eyes focused on the turbulent seas ahead, it is hard to contemplate what is over the horizon, especially as you are making the hard course changes this crisis demands. Yet this is exactly what you must do. The dilemma with tied down fiscal forecasts, is your world is flat and the edge is whatever your year-end date is. Short-term project-based businesses of course are doubly challenged in that their horizons can be a lot closer than year-end. When this is your perspective, it will be hard shifting forecasting method. Yet by joining up data from lead to cash within your core finance system and connecting forecast capability, you will be in a better place to start creating outlooks that incrementally roll (or zoom) forward. You can also develop and integrate zero-based budgets for those lines where it makes sense.

This is a good time to consider just what your requirements are and get the right combination of systems to steer your ship.