With the global Covid-19 pandemic sowing fear and uncertainty around the world, the coronavirus could be dubbed the ultimate disruptor. It is certainly, if unwittingly, a tech innovator, according to Chirag Shah, the chairman of Simfoni, which has developed a free tool that is helping businesses to assess and mitigate their exposure to the economic impact of the outbreak.
The spend analytics and buying automation firm, which specialises in digital platforms for procurement professionals and has clients in the UK, the US, Australia and the Middle East, is making recommendations that include suggesting alternative suppliers to struggling companies, having used its software to classify more than 500,000 vendors around the world.
Three dashboards are used to process a company’s data, before Simfoni’s team formulates strategies to help procurement teams offset their risks. The software prompts businesses to consider factors such as temporary excess demand, market-price projections, closed ports and much more – and Simfoni is making it available free of charge, after four members of its team built the tool in just ten days.
Providing a future-proofed tool
Simfoni’s existing analytics platform enables customers to assess supply-chain risk in relation to factors such as natural disasters, environmental issues, regulatory changes and workers’ strikes, but Shah quickly realised that the coronavirus was a “whopping great big thing” that posed an entirely new set of problems.
“From now on, pandemics will have to be factored in, so we knew we needed to measure the risk and consider the impact,” he says, speaking from Dubai, where Simfoni has a regional office, alongside outposts in London and Chicago. “The more we looked into it, the more issues we realised there were. So we put a team in place, drawing on a skill set that’s well established within the business, to flesh out a methodology to assess the risk.”
Simfoni’s tool is particularly useful because the firm’s expertise lies in predictive analytics. Historical analysis is of limited value in a situation unprecedented in both nature and scale, so the company’s predictive spend intelligence algorithm instead uses data from previous years to highlight the suppliers and items that will be affected during the next three months. This future-focused approach may also provide some psychological reassurance, by arming business leaders with a tool designed to work in a very uncertain world.
How can the software help you?
The tool comprises three dashboards (a video on Simfoni’s website shows how these work). The first, which is kept updated with each country’s number of Covid-19 cases, reveals the global hotspots for the coronavirus. Because these are the same for everyone, Shah says, “the key is applying your own geographic spend profile” – in other words, looking at the countries in which your company actually spends money.
In the second dashboard, around a dozen risks related to the coronavirus are classified into four groups. “Production risk” looks at items that cannot be made because factories are closed or employees are ill, while “travel restrictions” relates to staff who are unable, or forbidden, to go to work.
“Excess demand” assesses the items for which demand has rocketed (for example, face masks and toilet paper), as well as those that are not being made because factories have switched their manufacturing to produce scarce goods. “Supply-chain delay” covers not only hold-ups at borders, but also secondary effects, such as the inability to transport items by air freight on (now-grounded) passenger planes.
The final dashboard not only identifies a company’s key risks, but also prioritises those that are both likely to occur and likely to disrupt its supply chain. “We’re giving people a methodology that enables them to focus on the top ten or 20 risks,” Shah says. Here, “the key point is not to follow the total spend”, but to assess the category in which money is spent – for example, identifying the items that would be hardest to replace in the event of disruption to the supply chain, rather than focusing on the parts of most value.
Get tailored advice in 24 hours
The automated process takes around 24 hours, depending on the quality of a company’s data (clean, well-prepared information on spending is crucial here). Simfoni’s team then analyses the results to provide a ranked list of exposures to risk, as well as strategies to tackle these. Some of the company’s existing clients are already acting on the tool’s tailored recommendations by liaising with affected and alternative suppliers, negotiating commitments on price and delivery, and discussing supply issues with key stakeholders to enable them to manage customers’ expectations.
Shah says that Simfoni is happy to produce analysis for any other firms that apply. In case his staff are overwhelmed by demand, he has shared the methodology in an article for the specialist blog Spend Matters that enables business leaders to assess the relevant issues themselves.
New ways of (remote) working
How has the UK-wide lockdown affected Simfoni? Most of its employees work remotely, which has minimised the impact, although the company has had to cancel on-site roll-outs, in which new customers are visited by a “task force” that configures software and provides training. “In the long run, this new way of working reinforces our business model, which is that we can provide our service remotely, but it’s always much easier to do business once you’ve met someone face-to-face,” Shah says.
The challenge of bonding with new customers via video-link will begin with a client in Memphis, Tennessee, where Simfoni signed a major contract just weeks ago, representing a significant contribution to its growth targets for this year. “I always look for the upsides, and if we can crack that problem, it will be brilliant, because it means we’ll be able to run our business remotely as we expand,” the chairman says. “When the pandemic is over, people will be more inclined to support this way of working, so it could be a game-changer for us.”
No turning back – we are all digital now
The crisis may change workplaces in the UK in a number of ways. If working from home proves efficient, employers may decide to reduce costs by renting less office space, meaning that struggling providers such as WeWork may not survive. Air-pollution levels have fallen in major cities worldwide, and this unexpected benefit for the environment could continue if business leaders conclude that expensive air travel can be replaced by technology such as the booming video-conferencing app Zoom.
“Do think about how your business will change as a result of the pandemic; it could change your requirements completely,” Shah says. “I think this could be the inflection point, or the raison d’etre, for finally making the leap towards digitalisation. The issue has been around for some time, but there has never been a burning desire to act. Now, we’ve had to do it – and once you’ve done it, you don’t go back.”
He cites one of Simfoni’s Middle East-based customers as an example – a company in which the owners previously insisted on signing every cheque. “It’s a 90-year-old family business, and that’s the way they were taught: ‘If you control the cheque book, you control the cash’,” he says. “They resisted moving into an electronic environment for decades, but as of last week, they don’t even want to touch paper any more. The shift could not be more extreme.”
Having witnessed such drastic changes in behaviour almost overnight, the chairman believes that “coronavirus is acting as a technology innovator. This has some positives in the long run: it will make businesses more efficient, as well as creating opportunities for companies like ours, which are driving the technology innovation process.”
Decency triumphs over despair
Shah’s decision to make the dashboards available free of charge is one of countless examples of kindness prompted by the pandemic. “Given that this is a global crisis, with businesses under a lot of stress, we thought that the tool was valuable to society – something we can share that others can benefit from. After securing funding from BOOST&Co in January, we’re lucky to have a bit of dry powder that puts us in a position to do something philanthropic,” he says.
“It may seem a ridiculous idea, but the only way to fight the plague is with decency,” says Dr Rieux in Albert Camus’s 1947 novel The Plague (copies of which are flying off the virtual shelves) – and Simfoni’s offer to fellow businesses certainly chimes with that.
“Most of the time, I try to avoid telling people at dinner parties what I do, because if I mention supply-chain procurement, their eyes glaze over,” Shah says. “So it’s a nice change to be able to do something that’s relevant, and to be able to do it in a positive, motivating, inspiring way.”
- Also in this series: Expert Views from our CFO Edd Hatfield and principal Richard Hallett
- Contact Jack Trowbridge at our funding partner Growth Lending to discuss short-term financing
- Get a copy of BOOST&Co’s comprehensive guide to the government’s support for businesses here
- Read BOOST&Co’s guide to dealing with the coronavirus here