Trading in SA requires crisis management!
“Business as usual” is – quite simply – impossible in South Africa. Companies need to brace themselves for crisis management. That’s according to managing director of Cash Connect, Richard Phillips, who says that his company will be altering future business plans because of this country’s topsy turvy business environment.
Just one example is the recent strike action, which resulted in major effects on production. ATMs ran low on cash, petrol stations ran low on fuel, there were inflationary effects on food prices, not to mention costs to the economy of R1,2 billion per week (according to Softline and Sage). Phillips feels that this precedent has set the scene and the economy should brace for likely disruptions to follow.
The end-to-end cash management system will be planning its future strategies slightly differently from now on as it prepares for uncertainty in the country. “Due to the strike action, businesses must plan not only for transport interruption but for various other potential threats to the economy too,” says Phillips.
This is a harsh reality for the cash in transit industry where effects were really felt during all the commotion. “Cash could not be collected and transported safely,” says Phillips. “Stretched overdrafts, delayed settlement of accounts and impacts on routine trading were all results of this.”
He says that operators who may have utilised personal vehicles and in some cases untrained employees to ensure there was no disruption in service, took a massive risk to personal safety.“This hazardous behaviour, albeit well intended, cannot be justified,” he notes.
The impact of the strike was not felt immediately. “The reality of the strike only became apparent as business recoiled in the immediate after effects,” explains Phillips.
“Normal processes were severely backlogged during the strike, having far-reaching effects that perhaps few consumers were aware of,” explains Phillips. “Cash centres ran up to 10 days behind and retailers saw monies taking an excessive amount of time to reflect in bank accounts.”
According to Phillips, the cash that actually was collected and managed to reach cash counting centres, was further affected by unrelated interruptions such as cable theft (which delayed digital transfers). “The consequences of this meant further delays, aggravating the already high levels of frustration experienced in the business sector.”
“The key objective needs to be to minimise the delay in the transfer of value for the retailer so as to reduce the ever-present threat of interrupted supply of product,” says Phillips.
Taking the learnings of such a crisis, Cash Connect is realistic that, going forward, it will execute effective measures to deal with the negative realities of business in South Africa on a daily basis.
Has your company had to introduce elements of crisis management? Email email@example.com. We would love to hear about it!