Updating production and operational processes is an urgent task for many large enterprises. However, adaptation to rapidly changing external conditions due to the modernization of the algorithm of daily actions and operations performed is no less important. This is the topic of our conversation with the analyst of the Belarusian Institute of Strategic Research, Candidate of Economic Sciences, Associate Professor Irina Rusak.
— Economic activity in the pre-pandemic period was predictable, so organizations developed three medium-term development scenarios – optimistic, pessimistic and real, could predict the market situation, predict changes, and make adjustments if necessary. Events, as a rule, developed according to a real scenario. But over the past three years, major players in various markets have had to face a huge number of challenges since global geopolitical, economic, and social problems suddenly emerged.
Today, on the one hand, Belarusian enterprises, due to sanctions, to revise logistics, the cost system. On the other hand, internal decisions of the Government restrict pricing and cost planning of products. We are talking about the resolution of the Council of Ministers of the Republic of Belarus No. 713 of October 19, 2022, adopted to support the country's economy, as well as to maintain an acceptable standard of living for the country's population in conditions of uncertainty.
The shortage of qualified personnel, the struggle for labor resources are the main challenges that Belarusian enterprises have to face at the moment. Therefore, they need to restructure planning systems in such a way as to understand how to work in new conditions and achieve positive results.
It is necessary to take into account many factors and not rely only on the large Russian sales market. The level of competition there is now growing, as agriculture and the processing industry are rapidly developing, which bears further risks for our manufacurers.
— What does economic science provide?
— Let me remind you that in the classical model of business processes functioning, the so-called SPOD model of the world perception, dominating at the late 20th and early 21st century, everything was quite clear. Then came the VUCA model. It was based on rapid response, innovation, but failed to take into account all factors of the last three years.
SPOD: S – Steady, P – Predictable, O – Ordinary, D – Definite.
VUCA: V – Volatility, U – Uncertainty, С – Complexity, A – Ambiguity.
BANI: BANI: B – Brittle, A – Anxious, N – Nonlinear, I – Incomprehensible.
The changes that have had an impact on the global economy dictate the need for planning in the current conditions that cannot be predicted, i.e. in "brittle" ones. This model of building business processes is called BANI. The development of an enterprise development strategy within its framework is the introduction of artificial intelligence, the latest patented technologies and the replacement of labor resources, which are now in short supply, with machines.
— Which mechanisms exactly belong to the BANI model?
— Specific tools depend on the specifics of a particular enterprise. It is important to understand the essence of the model itself.
Brittleness refers to a situation where large enterprises can collapse overnight due to an inconspicuous "crack in the foundation". For example, during the coronavirus pandemic, the service sector suffered, especially tourism and the restaurant business.
Anxiety is the result of dependence on information. The need of a modern person to always be aware of events leads to the manipulation of consumer behavior in the market through the media. Many people remember how the stuffing of information about the increase in the price of sugar led to a sharp rush for this product.
Non-linearity means that the results of actions are unpredictable. Bloggers who talk about their daily lives can unexpectedly gain millions of audiences for themselves and receive income unthinkable for them yesterday. And efforts to position large enterprises risk being wasted money. In particular, major European airlines influenced potential consumers by advertising themselves, but in the case of COVID restrictions and sanctions, they cannot fly to a number of countries, and advertising does not pay off.
The introduction of artificial intelligence into our lives is associated with incomprehensibility and both positive and negative experiences. If an enterprise approaches the AI implementation process qualitatively, the synergetic result is maximal, the effect is tangible, and profit is made. But there are companies that use the emerging digital opportunities to develop the shadow economy, blackmail or deceive customers.
An example of big data interpretation is appropriate here — drawing trends in the development of the world economy, corporations, and markets. Every organization now needs not only to occupy its market niche, but also to have a pessimistic development scenario in stock. It should imply either a sharp change of niche, sales market, or the launch of a related or, most difficult, a new product for the enterprise.
All this requires huge material resources, a flexible lending system, an established cost optimization mechanism, and an adjusted state policy of economic management.
Within the framework of the BANI model, implementing business process criteria should be monitored not once a year (as in the case of SPOD) and not once a quarter (as in VUCA), but once a month. The difficulty lies in the fact that the responsibility for the final result falls on the owner of the business process. This aspect is typical mainly for organizations of private ownership. In order to adjust to the conditions of the external environment, the owner of the business process (an employee) does not always have time to coordinate his actions with the owner and implements changes in his activities in real time under personal responsibility. Government organizations working according to the templates prescribed by the technical processes will need changes in the structure, approval systems and adaptation of document flow to new realities.
— How do we break this down?
With regard to the business environment, the BANI model assumes that accelerating the pace of development and implementation of new technologies, including using artificial intelligence, will adjust the rules of the game in whole industries in a short time. In order for the company's team to respond promptly to this, the owner needs to launch mechanisms for motivating and stimulating the work of staff.
There are few examples of using BANI model by Belarusian organizations. The process of detailed analysis of the state of strategic planning in enterprises is time-consuming. As far as I know, there are flagships in the field of mechanical engineering that have begun to pay attention to adapting the strategic planning system to new realities. In two or three years it will be possible to estimate the result. Food industry has also introduced a number of modern planning mechanisms (automation of business processes, change management, work with personnel), that is, positive changes are observed in this direction, which lead to the desired result.
In my opinion, the most significant achievement is the adaptation of the public administration system to new realities, in particular, the work of coordination centers, point solutions for enterprises that have had a positive effect. But this is just the beginning, there is still a lot of work ahead.
In the Belneftekhim concern, a properly launched strategic management process, taking into account sanctions and the niches released in the EAEU market, will improve the condition of enterprises and increase their competitiveness. The main thing is not to stop there and act in accordance with the model of adaptation to changes.
PHOTO by Elizaveta Lukashun