Grant Thornton tool benchmarks coronavirus resilience using risk-modeling engine

Grant Thornton is offering a Pandemic Risk Assessment tool to help companies benchmark their operations against factors critical to business resilience during the coronavirus pandemic.

“We designed our assessment tool to provide organizations with a framework to think through COVID-19’s many business impacts,” says Chris Stephenson, principal and Financial Management practice leader at Grant Thornton. “Our goal was to present new fact patterns and provide additional viewpoints that businesses can use to sharpen their response and recovery plans.”

Yvette Connor, a principal in the Risk Advisory Services practice at Grant Thornton, elaborates further: “In a pandemic, you cannot avoid complex and changing trajectories, but you can minimize the dips and recover more strategically as the crisis plays itself out.”

Grant Thornton’s tool allows companies to enter business data into a quantitative risk-modeling engine that generates tailored resiliency scorecards. The tool uses a sliding scale in four key categories:

• Cashflow management,
• People and labor,
• Supply and demand, and
• Hard-to-predict external factors.

The resulting scorecards benchmark companies against a pandemic risk-assessment index – and against the measures public companies in similar industries are taking to blunt the impact of the coronavirus crisis. The scorecards also provide information related to removing blind spots and proceeding with resilience efforts.

Pandemic impact factors

Grant Thornton’s assessment tool emphasizes that cashflow is the most important factor for coronavirus resilience.

“Our tool makes it clear that cash is king – and getting an immediate handle on daily cash needs is paramount,” says Connor. “This is going to be a challenge for many companies: We expect working capital to drop by 15% over the next 90 days.”

Labor, too, is emerging as a make-or-break factor for risk assessment. “While there are the obvious issues like managing a remote workforce, there are hidden issues as well,” adds Connor – who cautions businesses to “be ready for developments such as union disputes and surges in required wages.”

Similarly, in today’s climate, businesses should focus on supply and demand – scrutinizing what customers are purchasing now versus the kinds of products or services they were purchasing before the coronavirus outbreak.

“Pandemics change a customer’s buying patterns and in some cases the channels,” explains Jonathan Eaton, principal and national Supply Chain practice leader at Grant Thornton. “Demand has likely shifted and understanding the impact on sales pipelines is vital, as is understanding the required supply-side execution. These insights help companies update their projections for sales, inventory investments, capacity and labor needs.”

Finally, it is paramount for businesses to plan for additional unforeseen external risks.

“As hard as the coronavirus crisis is, there are other risks that could confront businesses even as they struggle with the pandemic,” says Connor. “These include financial-market pivots, regulatory and political changes, natural disasters and other black swan events.”