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If you went to sleep a little early on New Year’s Eve 2019 and woke up early in March 2020, you’d be forgiven for thinking you had woken up in another time, or another place, or both. Political maneuvering in the region, a plunge in the price of oil and stocks and the COVID19 pandemic, have all contributed to a sense of dull ache and unease, to put it mildly.
How well you respond to these jolts, as an organization, depends a lot on how well prepared you are. The more precautions you’ve taken, the wider your margin of tolerance for uncertainty and the more calmly you can respond.
This is the argument made by Vuk Prevelic in his article Fix, sell, or close? The author argues that companies are “forced to navigate evolving complexities on a daily basis.” As such, it is important now to “take a step back and consider a plan for non-core, or underperforming operations that could benefit from a change in trajectory.”
In essence, the article is about building resilience and at no time is this more pertinent than now. Bart Cornelissen and Yasmin Fansa discuss resilience in the oil and gas industry as it faces its biggest crisis in decades. “Future-proofing organizations is building resilience and placing it at the core of the organization’s strategy,” they say, “addressing strategic drivers of various market environments to determine implications for industry dynamics and building optionality to gain flexibility to react to the most recent market developments quickly.”
Another good example of being prepared is IFRS 17. Despite the standard not being effective until 1 January 2022, Elias Ma’ayeh and Zeeshan Abbasi believe it is important to be discussing it now. “The reason lies in the complexity of the standard itself, not only with respect to its application, but also in relation to its interpretation,” the authors say in their article New kid on the block. Here are two people who will not be surprised when the standard comes into effect.
If you cannot always be prepared—and it does happen to the best of us—then it is important to remain agile, as advocated by Ziad Zakaria and Adeel Khan Legari. In their article on the importance of the role of the Project Management Office (PMO), Transforming tradition: the Project Management Office, they argue the case for the PMO renouncing traditional practices to better respond to technological disruption. “While some organizations are thriving,” they write, “others are losing their market share […] organizational agility is the need of the hour. The PMO can be a key differentiator.”
Arjit Bhattacharjee agrees. “With the rapid advent of information technology and globalization,” they write in their article The hammer of economic substance: Will the shell crack?, “physical barriers and distances were no longer an impediment. Businesses had to become agile.” And the ones who did, managed to reap great benefits, especially when it came to taxation. Now the world, or the European Union at least, is trying to catch up. New Mandatory Disclosure Rules that come into effect on 1 July 2020 will allow EU member states to “promptly react against harmful tax practices and close loopholes, undertake adequate risk assessments and carry out targeted tax audits where necessary,” write Abi Man Joshi, Martin Walker and Jallu Fehar in My house, my rules.
Perhaps the best way to stay prepared is to keep up with the knowledge. The more informed we are, the less surprised we are, the more prepared we feel and the less our instinct to panic. Our other articles in this issue, Challenges of IFRS 9 modelling in the UAE banking industryby Firas Anabtawi and Marcelle Hazboun and Keeping pace with financial crimeby Nick Athanasi, Nipun Srivastava and Nicki Koller, also serve to inform and educate about current challenges in global finance. With the Middle East Point of View, you can always be sure to stay updated on the issues that matter for your business, so you can always stay calm and be prepared.
The views and opinions expressed herein do not represent nor reflect those of Deloitte & Touche (M.E.) LLP (DME). Opinions, conclusions and other information in this blog post which have not been delivered by way of the business of Deloitte & Touche (M.E.) LLP (DME) are neither given nor endorsed by it.