Global Ambition – Industry Insights webinar series

Enterprise Ireland will host a series of Global Ambition – Industry Insights sector focused webinars for clients, to deliver market intelligence on the evolving international export opportunities across global markets. The five sector market webinars will focus on:

  • Construction – 15th September, 9:30am – 10:45am

  • Lifesciences – 15th September, 2pm – 3pm

  • Travel Tech – 16th September, 3pm – 4pm

  • Agritech – 17th September, 11am – 12pm

  • Consumer Retail – 17th September, 2pm – 3pm

 

This webinar series will draw on Enterprise Ireland’s unique insight into key markets for Irish exporters lead by the Market Advisor in that sector and will explore crucial issues such as relationship strategies and the shift in consumer behaviour in the context of Covid-19.

You can register using this link. You can register for multiple webinars and all registrants will receive a copy of the webinar recording and slides.

happy employee

Irish talent tech firms boost global engagement and productivity

In this era of widespread remote working, employee engagement and wellbeing matter more than ever. Isolated workers need to feel a sense of community and get support from their employers in line with their company’s values.

Companies around the world are looking to Irish talent tech companies for cutting-edge digital solutions to enable streamlined, effective work by HR departments, managers and employees. From wellbeing apps to performance management tools, Irish companies are exporting best-in-class products to businesses in dozens of countries.

Most are also focused on integrating with the existing technologies used by companies, meaning those in charge of IT budgets can maximise their legacy investments. Discover how five of the best in Irish talent tech are meeting the needs of a global client base.

 

1. Workvivo: Engaging employees with a highly social experience

Cork-based Workvivo is an enterprise social network, designed to enable organisations to engage as well as communicate with their employee communities.

“We took activities such as posting, liking and sharing content to an activity feed, which people are used to on social media apps outside the workplace, but developed them in a business context, enabling people to more easily engage with one another and with their company.” says Pete Rawlinson, Chief Marketing Officer at Workvivo.

 

Describe your business

“Disengagement was an issue for as many as 70% of businesses before the pandemic,” he adds. “One-to-one communication tools such as email or messaging facilitate communication but don’t do anything to provide that sense of community and culture.”

“People  need to feel part of something, especially when they are working remotely.” Pete Rawlinson, CMO at Workvivo

Since the pandemic spread, Workvivo has seen a significant increase in enquiries. “Companies are seeing that many remote workers can feel isolated. Our platform helps bring employees together through a highly social experience. We see customers using the platform to host activities such as quizzes and competitions that really help create that important sense of community….and fun!”

Woodies found that its Workvivo activity went up when its workers were furloughed due to Covid-19. “These were mainly employees with no work email account or company device, but they wanted to stay engaged,” says Rawlinson.

Workvivo has sought to ensure it can integrate with existing communication tools such as Slack, Zoom and Workday, and also includes built-in engagement analysis through pulse surveys, he says, adding that many customers report higher levels of employee satisfaction and engagement than before they implemented the platform. “Higher engagement typically leads to increases in talent retention and acquisition,” he said.

Established three years ago, Workvivo now has customers in 35 countries with over 150,000 users on the platform. The company is headquartered in Cork, Ireland and has recently opened an office in Sacramento, California. Having recently secured $16m (€14.2m) in Series A funding, it is now focused on expanding its US client base and accelerating its product development plans.

 

2. Frankli: automating continuous performance management

While performance review cycles can strike dread into both managers and employees, Frankli aims to make performance management easier and more intuitive with its end-to-end platform.

“Our product allows managers to have much more meaningful conversations with people and support their development,” says Noel Dykes, founder and CEO of Frankli. “This approach is transformative and agile — we don’t set out to be a once-a-year annual cycle of goal-setting and meetings.”

A software engineer by background, Dykes worked as a consultancy practice manager in New Zealand and saw first-hand that younger employees were particularly keen on continuous feedback and recognition. “People want to be truly connected to the work,” he says. “They want to understand their purpose. Why are they there? What is the company they are working for trying to achieve?”

He adds that purpose-driven organisations will thrive, especially as remote working opens up a global marketplace.

“Managers are going to become coaches, rather than engaging in direct management in the office where they can see employees and know what they are working on. From now on, they will have to trust people and give them much more autonomy.”

Within Frankli, managers can set up regular recurring one-to-one meetings with their team members, setting priorities, agreeing action items and supporting accountability on both sides. The software suggests recommended talking points, based on insights from organisational psychology. Employees can also contribute comments and suggestions.

The product also enables businesses to offer more tailored learning and development opportunities, including a two-sided mentor marketplace tool.

Frankli has customers of all sizes in Ireland, the UK, Poland and New Zealand. While its core focus is midsize companies looking to scale, it already supports workforces of as many as 70,000 employees.

 

3. Empeal: personalised employee wellbeing at scale

While many employee wellbeing platforms work on a one-to-many scale, says Sohini De, founder of data-driven start-up Empeal, her business aims to deliver 1:1 wellbeing support at scale.

“If someone is having trouble with sleep, perhaps not doing too much exercise, eating unhealthy food or generally falling into bad habits, they can go through the programme on our system,” she explains.

“They start by completing interactive questionnaires and we can also integrate data from their wearable devices. They could be given a personalised programme to improve their sleep hygiene, for example. If they continue to have problems, their case is escalated to a sleep expert.”

With users in Ireland and India, Empeal is now focused on expanding those markets and pushing into both the UAE and the UK, So far, it has seen engagement rates of 60% on average, which De says is high for a wellbeing app. “We have also seen very encouraging results in terms of people achieving their health goals,” she says.

In addition to helping employees improve their wellbeing, Empeal also provides anonymised aggregate data to employers to enable them make better decisions, improve staff retention rates and attract more talent.

To help companies navigate the coronavirus crisis, Empeal produced a free toolkit of resources and also made its community-level module free. “We were finding a lot of employers were asking, ‘How can we take care of our people at this time?’ — they were very concerned about how everyone in remote locations was coping not in touch with their workplace or workmates,” says De.

 

“The community engagement part of the platform, which includes fun challenges and community boards, helps employees feel connected and it’s very simple to roll out for HR teams.” Sohini De, Empeal founder

 

4. Peptalk: building community through connection and wellbeing

The three founders of workplace wellbeing platform Peptalk — all former sports stars — know more than most the value of wellbeing when it comes to performance.

“We had all been involved in high performance sports,” says CEO James Brogan, an all-Ireland winner himself and a cousin of Dublin GAA legend Bernard Brogan, another of the co-founders along with Michelle Fogarty, who represented Ireland at taekwondo. “We had seen that to get the best out of people, their lives need to be in balance. What you do off the pitch is as important as what you do on it.”

Peptalk aims to help companies build sustainable high performance cultures through its community-driven employee experience platform. The product includes an insights tool, management toolkits, an employee app and a real-time measurement dashboard.

“We’re helping organisations with those off-the-pitch activities. We’re helping humans to be better at what they do, to have more energy, and to be more focused and resilient,” says Brogan.

He adds that the Covid-19 crisis has exacerbated the issue of work-life balance: “Senior leaders have seen a different side to their staff. They’re now acutely aware that, unless people have proper support, they won’t be able to work to the best of their ability.”

During the crisis, Peptalk has seen increased engagement from existing clients, while also doubling its usual number of demos to potential customers.

Set up in late 2016, Peptalk has users in 10 countries, including Mondelez, McDonald’s and Paypal. “This is a global challenge faced by multinationals. We offer one solution that works across an organisation, so there is no sense of disconnection with different offices doing different things,” says Brogan.

With serious plans to scale further, Peptalk expects to close out its current funding round later in 2020. “This is the time for us to get out and support as many organisations as we can,” says Brogan. “It’s a challenging time and the need has never been greater for the type of services we offer.”

 

5. Wrkit: easy to implement and clinically-backed 

Founded two decades ago, Wrkit was originally a group benefits scheme, which evolved into an employee discount scheme. While users can still access thousands of discounts on holidays, food, clothes and other products, Wrkit has expanded to offer other services, including a learning portal with 4,500 personal and professional courses, a recognition portal and a wellbeing portal called Powr.

“POWR stands for Positive Occupational Wellness Resources, offering tools such as meditation, breathing exercises and reflective journaling” explains Jason Brennan, Wrkit’s Director of Wellbeing and Leadership.

“The big differentiator between Powr and similar apps is that it offers 430 clinically based behavioural plans put together by psychologists,” says Brennan. “These are based on six paths — mind, sleep, work, life, food and active. When users answer the questionnaires for these paths, they are given a personalised plan.”

“POWR users begin by finding out how they score clinically in the 6 areas of wellbeing and are instantly provided with personalised clinically based plans to improve engagement and growth in each area. During covid for example we saw a huge up take in the activity, work and life plans, helping not only users but employers by feeding back what is happening in real time with their anonymised and aggregated dashboard.”

Wrkit is based in Dublin, but also has offices in London and Massachusetts. Its clients include multinationals such as KPMG, FedEx and Boston Scientific. Its internet-based application can be launched quickly as it requires no specific IT infrastructure, says Brennan.

“All we need to launch is the list of employee ID numbers, and we provide lots of webinars and video tutorials to help staff engage with the tool, which is of course completely confidential.”

When Covid-19 struck, Wrkit quickly found demand rose. “We launched to 60 companies in eight weeks,” says Brennan. “We also quickly created a Coping with Covid portal to help users.”

ReturnWorkplace 1

Covid-19: Returning to the workplace safely

In four short months, the world of work has changed dramatically thanks to the Covid-19 pandemic. Many of us experienced remote working, changed working conditions, altered hours or even layoffs. But now, as the economy slowly reopens according to the Government’s phased roadmap, employers and employees are slowly returning to the workplace, albeit a very “new normal” type of workplace.

“The Covid-19 pandemic has impacted on companies in many different ways,” says Karen Hernandez, Senior Executive, People & Management, at Enterprise Ireland. “As a result, the challenges that companies are facing as employees return to the workplace tend to be different, but in general, there are a number of key considerations that companies will need to address to ensure a safe return to work.”

To help companies navigate their way through these considerations, Enterprise Ireland has produced Covid-19: Return to the Workplace Guide, which can be downloaded on the Globalambition.ie website. This is a practical guide that takes employers through four key areas: the health, safety and wellbeing of employees; employee communication and engagement; resource planning; and data privacy and GDPR. The guide also includes some templates that employers can use within their own business, such as a Pre-Return to Work form.

“The first consideration that employers need to address is the health, safety and wellbeing of their employees,” explains Karen. “The Health & Safety Authority (HSA) has issued the Return to Work Safely Protocol, which supports companies put measures in place that will protect the health and wellbeing of their employees as the economy begins to open up. Measures include completing a Risk Assessment, completing or updating your business’s Covid-19 Response Plan, and asking your employees to fill out a Covid-19 Pre-Return to Work Form.”

The HSA Protocol can look daunting at first, but Joyce Rigby Jones, Joint Managing Director at HR consultancy Voltedge, explains that it’s up to an employer to decide what is right for them. “The HSA Protocol provides a list of guidelines and protocols, and it’s up to each company to look at these and decide what is reasonable and appropriate in their case. But at the same time, as employers, we have to make sure we’re providing a good and safe base for our employees.”

Many guidelines include practical measures such as putting processes into place for suspected Covid-19 cases in the workplace, but another major part of ensuring employees’ health and safety is looking after their wellbeing, as Joyce explains. “We’ve all gone through major stress and there’s been such radical change that every employer has to take  onboard how this has affected employees.

Many employers have put into place an Employee Assistance Programme or Occupational Health Service to help employees with any issues they may encounter. But if you don’t have this, there are other things you can do, such as running wellness sessions or spearheading wellbeing initiatives.

There are some really nice resources on the gov.ie website called In This Together. The HSE website also has a mental health section, which is very useful. And of course, the Enterprise Ireland Covid-19 Return to the Workplace Guide offers some useful ideas such as a buddy system, which can be great for those working remotely. Communication is key – not everyone will be able to return to the workplace so talking to each individual and making them a part of the decision-making process will help their wellbeing and make sure any decision is good for them.”

Communicate, communicate and communicate some more!

The second key consideration identified by Enterprise Ireland is communication, which is essential during a time of so much change. “The HSA has provided guidance on a number of practical measures to enhance communication with your staff as they return to work,” says Karen. “Employers should be looking at all the changes in policies and procedures that must be made and ensure that employees know what they are.

A first step includes putting a Covid-19 Response Team in place, who will be responsible for completing and implementing the business’s Covid-19 Response Plan. At least one worker representative should be appointed, who will work with the team to engage with employees regarding any changes that need to be made as part of the Covid-19 Response Plan. All staff must also be trained.”

Enhanced communication will also help your employees’ wellbeing. “Everything about the workplace will change, from where you enter and exit to where you take your breaks,” explains Fredericka Sheppard, Joint Managing Director at Voltedge. “Change is difficult and it’s up to each employer to implement those changes, map it out, communicate with their employees and communicate again – you cannot communicate too much in this instance.

“Collaboration will bear fruit. You want to know if there are risks or if an employee is nervous about the workplace or feels unsafe. You want your staff working in a safe environment; if you are communicating with your staff through surveys, questionnaires etc on a regular basis, you will get greater engagement with your employees – and we know that in an environment where there is greater engagement, there is greater productivity.”

Successful resource planning

Inevitably, some businesses will have to take a hard look at their company and make some changes. Remote working will become a long-term reality for some companies, while sadly for others, redundancies may have to be implemented. Any changes in resources should be made objectively and with the constraints of employment law in mind. “Given current physical distancing guidelines, it’s highly unlikely that any company will be bringing back their full complement of staff initially,” says Karen. “Businesses will have to look at their resources in line with their business plans and their employees’ needs. For instance, some employees might have underlying health conditions and mightn’t come back into the office at first.”

“Some companies may have to look at restructuring or altering their business,” adds Fredericka. “They must pay attention to the legislation in this area. This hasn’t changed and the crisis won’t excuse you if you don’t do it right.

The Enterprise Ireland Return to the Workplace Guide has some useful information regarding this. Of course there’s a financial impact to this, but you must also remember that there’s a psychological impact too. The staff who are staying may be affected by any redundancies too – and this is talent that you have worked hard to get. Evaluate your business and market; you must keep this under constant review.”

On the other hand, this is a great opportunity to look at the skills of your employees and invest in your talent. “Resilience and good people management have never been more important and we need to support and invest in managers in developing these skills. Your marketplace may have changed, you may have to alter the product you offer – invest in your people to adapt to these changes and you’ll reap the rewards in the future.”

Protect sensitive information

A final key consideration is the tricky issue of GDPR and data protection. The HSA Protocol requires employers to collect information and keep records that could contain potentially sensitive information. It’s imperative that employers only collect the information they need, and that it is stored appropriately.

“GDPR and data security are more vital than ever,” says Karen. “The HSA is asking employers to keep contact logs, and there may be a need for some companies to undertake temperature checking too. There will also be health information included in the Pre-Return to Work Form. Companies need to be very mindful of their obligations under GDPR and data security. They must make sure that any information they request is reasonable and that this information is stored securely.”

These points, and more, are explored and expanded in the Covid-19: Return to the Workplace Guide. Enterprise Ireland has also launched a number of supports for businesses, including the Lean Business Continuity Voucher, which provides companies with up to €2,500 to help them put into place any guidelines or strategies needed before opening up the workplace again. More details can be found at https://globalambition.ie/covid-19/

Garrett Murray

Horizon 2020 – An unmissable opportunity for ambitious Irish innovators

Significant levels of grant support and equity investment are up for grabs under the Horizon 2020 European Innovation Council (EIC) Accelerator Pilot, and Ireland’s recent success shows that Irish companies have what it takes to win.

The EIC Accelerator Pilot supports high risk, high potential SMEs and innovators to help them develop and bring to market innovative products, services and business models that could drive economic growth.

In the most recent call, eight Irish companies secured a total of more than €31m placing Ireland second, jointly with France and Denmark, in terms of the number of companies awarded funding.

“The March call results have been particularly good for Irish companies,” says Garrett Murray, National Director for Horizon 2020 at Enterprise Ireland. “The success is a testament to the research and innovation capability of Irish companies and the vibrancy of our high potential start-up and commercialisation eco-system.”

Among the successful Irish companies were five whose innovations related to coronavirus. One of these, Aquila Bioscience, has developed revolutionary decontamination technology that helps protect people from dangerous pathogens and other viral infections.

“We are delighted to receive funding from EIC which allows us to substantially scale up production and deliver this technology more quickly to workers in Ireland and across the globe,” says Lokesh Joshi.

 

Support for applicants

With multiple EIC calls during the year there are ongoing opportunities for companies to pitch for a slice of the lucrative support, but, says Murray, it’s important for companies to realise that it is a very competitive process.

“We recommend that companies considering applying for EIC Accelerator support contact Enterprise Ireland first. Our team of National Contact Points are experts on the programme and work with companies to bring them through the process step by step including reviewing drafts of their application before submission.

“Applicants need to think clearly about how they are going to articulate three things in their application: the excellence of their innovation; how their product or service is going to impact in the market; and how they are going to implement their strategy to scale their business. These are the three major criteria on which the applications are judged,” explains Murray.

If companies are successful at stage 1 they are called to interview in Brussels (currently via digital communications).

“Our team do mock interviews with the companies, putting them through their paces in exactly the same way as they will experience in Brussels, to give them the opportunity to refine their pitch.”

Companies can apply for grant support only, a mix of grant and equity, or initially a grant with the option for later discussion with the Commission in relation to equity.

“We always advise ambitious companies to seriously consider applying for equity particularly in the current environment where the availability of venture capital is reduced,” says Murray. “Getting equity from the Commission provides leverage to get more private sector funding.”

 

More than financial support

As well as financial support, successful EIC Accelerator applicants get coaching and mentoring, provided through the Enterprise Ireland team.

“The Commission regards that as a very important part of the process. It’s not just about awarding a grant or investing by way of equity but also helping companies develop their strategy.”

Kite Medical was awarded a grant in the most recent call. The company has developed a system for the detection of kidney reflux.

“This funding from the European Commission will allow Kite Medical to further develop the KITE system to progress into a clinical study. The funding will also support an additional six jobs at the company and establish our market launch strategy. The project outcomes will facilitate fund raising to support our commercialisation plan,” says Joan Fitzpatrick, Kite Medical’s CEO.

 

Future calls

There continues to be many opportunities for Irish enterprises and researchers under the EIC and across the Horizon 2020 Programme, including calls for proposals under the European Green Deal, worth around €1bn that will be issued in the autumn.

The next EIC Accelerator call for applications will be in October and will have a focus on female entrepreneurship where, should the first-round evaluation show that a minimum of 25 per cent of companies selected for the final-stage interviews are not led by women, additional interviews will be planned.

“We are particularly encouraging female-led companies to apply for the call in October. There are a lot of great female entrepreneurs in Ireland and this is a great opportunity for female-led companies to get additional funding,” says Murray.

SMEs of all sizes are eligible to apply for EIC Accelerator funding including start-ups, which tend to form the majority of applicants.

“There’s no disadvantage to being a very small company. The Commission considers how quickly a company is going to scale and whether EIC support will help accelerate that and get the innovation to market faster,” says Murray. 

“The only disadvantage that companies can have is if they’re not ambitious enough.”

 

For more information about support under Horizon 2020 please contact h2020support@enterprise-ireland.com

 

 

Inside Innovation Show – Combilift

Inside Innovation brings you the stories of Ireland’s leading innovators and changemakers. Across the series we will cover a whole range of topics from innovating in a crisis, to looking at the future of many business areas. We go behind the stories, to understand what drives these innovators and what the innovation success factors are, from capability building, to culture and leadership.

The podcast is hosted by innovation expert Aidan McCullen.

Episode 1 – Interview with Martin McVicar, CEO & Founder of Combilift

The first episode is part of a series ‘Innovating in a Crisis’. An Irish innovator who innovated in the Covid-19 crisis is CEO and Founder of Combilift, Martin McVicar. The Irish engineering firm leveraged the innovation skills that make it a world leader in forklift trucks, to solve a global shortage of the ventilators required to fight Covid-19.

Market Watch Industry Bulletin – Automotive

The spread of the coronavirus led to an unprecedented collapse of many important car markets in terms of producers, their suppliers and the distribution channels across the globe . Work came to a standstill in almost all countries. But as severe as the slump was initially, the return of production is currently giving the industry hope. A large number of vehicle manufacturers and their suppliers were able to resume operations, albeit only to a limited extent. In addition, stabilization strategies and aid packages have been developed in recent months.

In this latest industry bulletin, Enterprise Ireland has primarily surveyed leading market experts and industry leaders, and collected their views, gathering specific recommendations for companies, to stabilize, reset and recover from the current situation.

Read the full report here.

Resetting your business model

Resetting your business model in response to Covid-19

In preparing for tomorrow’s world, businesses need to reset their business model to remain relevant to their customers in the new environment

The Covid-19 pandemic has changed the world and transformed the environment and operating rules for business. Last year’s winning formulas have become failed propositions almost overnight, and many of yesterday’s compelling products and services are obsolete in the context of tomorrow’s needs.

This requires businesses to take a long, hard look at their business models in order to remain relevant to their customers in the new environment. They will need to reassess what they sell, who they sell it to, and how they make money from that. They will also have to examine why people buy from them and how that translates into profitability.

According to Business Financial Consultant Brendan Binchy, companies need to focus on four key areas when seeking to reset their business models:

  • Their current product offering and how can it be developed, changed, or delivered differently
  • Who their customers will be in future, both current and new, and if there is a need to drop some existing ones
  • The reasons customers buy from them, their new value proposition, and how they will do something unique; and
  • How they will make money – lower input costs, production efficiencies, premium price or volume increases.

When looking at the product offering, Binchy advises companies to ask the hard questions. “Have you got any inherent future proofing protection for your product or service? What is unique about it? What is its lifecycle in the market? How much of your revenue is dependent on it? What are most profitable products?”

The answers to these questions will help decide what products to retain or drop, as well as inform new product development efforts.

Customers should be subject to a similar analysis, he advises. “Who uses your products? What are their demographics? Who are your most profitable customers? Where are they? What defines your ideal customer and where can you find more of them? Why are you still dealing with unprofitable customers?”

This will assist in defining target customers. “Businesses should categorise customers into groups according to their profitability and different attributes, and then select which ones they want to deal with in future. This may lead them to stop dealing with some of them. Companies shouldn’t be afraid to fire customers who don’t value what you do.”

The next step is to establish why these customers will buy from the business. “Go out and ask your customers,” Binchy advises. “Bring them in and talk to them about it. Find out the defining attributes of your most important customers and find ways of meeting their expectations. This will help you pick the right people to work for; people who value what you do. If a multinational has been buying from you for the past 10 years, you must be doing something right. Find out what that is and build on it.”

Making money is the other and perhaps most critically important part of the jigsaw. This will require the business to look at the key business model drivers of products and services, marketing and sales, and finance, in terms of profitability, cashflow and return on investment. “They are the what, the who and the how of the business model,” Binchy explains. 

“The enablers are your people and systems and processes that support the business. You can’t grow a business without all three drivers, being robust and in balance with each other. You can have great customers and products, but you won’t have a business if you’re not making money.” says Binchy

An analysis of those drivers, along with the enablers, will give you a clear view of the revenue and cost bases of the business, and will help identify how the pathway to profitability can be bridged. “A business might look at reducing materials, labour or other operational costs. It can also look at production efficiencies or seek to increase prices if it can be positioned in a premium segment of the market.”

The remaining question is how to finance the transition between the old and the reset business models. “The money and support are there to help companies bridge between the two. We just have to hope the transition period between them is going to be as short as possible,” Binchy adds. “The Enterprise Ireland Covid-19 Business Financial Planning Grant is there to help businesses start the journey. It offers a 100% grant up to the value of €5,000 to fund the cost of a financial consultant to prepare a financial plan that shows exactly how the company intends to reset and adapt its business model as it emerges from lockdown. The Lean Business Continuity scheme offers vouchers worth up to €2,500 to fund the cost of training and advisory services.”

He points to the €450 million Covid-19 Working Capital Loan scheme and the €200 million Future Growth Loan Scheme available through the Strategic Banking Corporation of Ireland as potential sources of loan finance for companies.

In addition, there are the Enterprise Ireland Sustaining Enterprise Funds which offer funding up to €800,000 to fund the implementation of stabilisation and viability plans. Smaller businesses can also apply for funding of up to €25,000 or €50,000, depending on the size of the business.

Both schemes feature repayment moratoriums for the first three years, a very important consideration according to Binchy. “That is very attractive when the company doesn’t have repayment capacity for the moment. They can’t go to the banks if they are in that position. Businesses have to dance very carefully when seeking funding, and these schemes certainly help with that.”

Learn more about the Enterprise Ireland supports available in our Accessing Liquidity & Managing Cashflow webinar

Adapting your business model

Adapting your business operations in response to Covid-19

As businesses reset and recover, every aspect of a business’s operations should be examined and analysed to identify efficiencies and better ways of doing things

Having identified a pathway out of the crisis, made required changes to the business model and developed a cash conservation strategy, businesses need to turn their attention to operational matters if they are to adapt quickly to the changed environment.

Every aspect of a business’s operations should be examined and analysed to identify efficiencies, better ways of doing things, or things which shouldn’t be done at all. Companies around the world are already engaged in this process and those that delay will find themselves at a competitive disadvantage, according to Business Transition Consultant Brendan Binchy.

He points to a survey of 3,000 CEOs carried out by the Economist Intelligence Unit which found that almost all of them are going to implement operational agility measures as a result of the Covid-19 crisis. “That train has already left the station as far as they are concerned,” he says. “Every company should take a quick and hard look through the whole functional side of its business.”

He offers a checklist of the five core functional areas of the business which require attention – products and services, marketing and sales, finance, people, and systems and processes.

“They need to take a walk through that checklist and identify areas where they can improve effectiveness and efficiency,” he adds. “For example, when looking at the operational model they should ask if it is possible to morph to online, or if product and service delivery modes can be changed.”

On products and services, he advises careful management of stock levels as a starting point. 

“New product development should also be reviewed, you have to look at the cost to bring it to market and how quickly it can generate new revenues streams or if you need to do it at all at the moment.” says Binchy

Similarly, expansion plans should be subject to reappraisal and put on hold if not justified by a clear payback. Supplier relationships are also important, and discussions should be held with a view to reducing costs and achieving efficiencies.

“With international supply chains, some companies are moving away from “just in time” policies to making sure there is “enough in time” to meet demand,” Binchy adds. “There is risk associated with internationalisation, and companies could consider moving to a portfolio of multiple suppliers to deal with this.”

Other considerations relate to the production process itself. “If the company is starting up again, what needs to happen in the production flow? Does everyone need protective screening measures? Will you sub-contract some things out which had been done internally?”

Turning to marketing and sales, he recommends a selective appraisal of investment, but with targeted reductions based on return on investment rather than wholesale cuts which could cut off the market cycle.

Another area to look at is pricing strategy and the potential impact of discounting. Care should be taken to avoid a situation where discounts lead to volume increases which in turn may cause problems in the production process and perhaps divert resources from more profitable lines. It’s a classic case of weighing up the price volume trade off.

The finance function should become more fully integrated into the management of the business, he advises. “The finance team should be a core part of the overall management team. This means you will know all the things you need to know about the business and its finances as they happen, rather than find out about them in a report two or three months later.”

Binchy says communication is vital when dealing with people in your business. “You have to remember that you’re dealing with human beings and you should support them in the same way as you support your customers. When you are faced with implementing inevitable pay rationalisation measures you should segment your employees carefully to ensure that those people who are adding most value are rewarded appropriately.”

The final item on the checklist is systems and processes. Along with people, these are the underlying enablers of the business and every element should be assessed to ensure it is delivering value to the business either in terms of revenue generation, service improvement, or efficiency and productivity gains. Regardless of how good a process can appear there is always a better way, Binchy notes.

Businesses seeking to adapt and modify their operations to meet the changed environment created in the wake of the Covid-19 pandemic can avail of support in the form of Enterprise Ireland Lean Business Continuity Voucher and the Covid-19 Business Financial Planning Grant.

The Financial Planning Grant is worth up to €5,000 to pay up to 100% of the costs of an approved financial  consultant to work with the company on the development of a business and financial  plan, while the Lean Business Continuity Voucher is worth €2,500 and can be used for training or advisory services to help them identify and implement the measures needed to ensure they can continue to operate during the current period.

Where additional finance is required to fund new initiatives Binchy points to the Enterprise Ireland Sustaining Enterprise Fund which offers funding of up to €800,000 to eligible companies. There is also a fund for smaller companies which offers funding of up to €25,000 and €50,000 depending on the size of the business.

Learn more about the Enterprise Ireland supports available in our Accessing Liquidity & Managing Cashflow webinar

Industry Bulletin – Automotive – New mindset to focus on future solutions

AVL is the world’s largest independent company for the development, simulation and testing of powertrain systems for passenger cars and commercial and industrial vehicles and is directly exposed to the deepest and most rapid business downturn in the history of the automotive industry. Dr. Daniel Kürschner, Head of the Company’s Munich-based advanced driver assistance systems (ADAS) centre, remains optimistic, however.

He points out that AVL is not a traditional Tier 1 supplier to the industry and is not directly connected to the supply chain. It is therefore also not directly affected by vehicle sales as many other companies.

While some projects are subject to renegotiation and delay, there are positives to the current environment, he notes. “We as a German or European car industry need to see this crisis as an opportunity to rethink our traditional mindset and to focus on more sustainable, future-oriented solutions, following the CASE trends (connectivity, autonomous, sharing/subscription and electrification) and also noting different demands of the younger generations.” says Kürschner. “Car makers would have the time now to catch up on delayed technology developments which they have not focused on over the past decade. A lot of companies worldwide, particularly innovative start-ups, have technologies available that could be combined with those of the traditional corporations in order to speed up launching competitive products at the end.”

AVL is already moving into new areas such as e-mobility, fuel cells and ADAS. “We see a big opportunity to grow within these new business fields and it would be great to see a green economy emerge in the near future,” he adds.

As a direct impact of Covid-19, also AVL has successfully switched to remote working. “Like for others, it has affected us in the sense that people can’t come together in person , but that we are currently working in home offices but, luckily, our teams are experienced in digitalisation and web-based communication so that we can keep the productivity levels very high.”

The downstream effect of the industry downturn is being felt, however. “The car industry in general is very cautious at the moment, so capital expenditure is on hold and also AVL – as one player in the industry – has changed over to short-term work,” Kürschner explains. “As a technology and engineering provider we are dependent on the automotive industry reopening, and we will continue to provide our technological expertise as best as possible, trying to overcome all hurdles resulting from the crisis.”

 

Addressing future market demands

Many of the challenges the industry is currently facing, already existed before the current crisis, he adds. “The current situation just accelerates the formation of fundamental structural changes within the market. The structural changes basically result from the green trend and because younger generations are demanding greener and more sustainable yet still safe and superior technology. However, they are still willing to spend money for this, so the industry must adapt to these changing circumstances and take measures to understand and accept future market demands.”

This superior technology includes ADAS.

“More and more customers will expect to find ADAS and autonomous driving features within their cars,” says Kürschner. “Moreover, autonomous driving is providing the technical basis for future concepts such as mobility as a service.”

He also mentions the upcoming development of the centralised electronic control unit. “This has a lot of benefits for maintenance and remote updates. It allows the provider to keep the product updated all the time, and will also feature active safety and cybersecurity functions.”

Innovation will continue to play a major role in automotive industry, he believes. “As we had already seen in the e-mobility trend starting over 10 years ago, today, also ADAS and newer trends will cause shifting supply chains, with innovative solutions looking to alter and take over from traditional fields within the industry.”

He takes a positive view of the industry’s future. “Looking at the business perspective, the focus will be on measures over the near term to keep the industry and economy running, which is partially a government responsibility, but also the companies themselves need to sharpen their product portfolio, ready to keep up with the latest customer demands. People will continue to need mobility despite the deep crisis and despite the current uncertainty and therefore, for now I am not concerned that people will stop buying cars. However, in the medium and long term, I would focus on the technologies following the CASE trends in order to maintain our global competitiveness within the future car industry.”

 

 

 

 

businesswoman

Covid-19 Business Supports

From 5,000 to 800,000, Enterprise Ireland has a range of funding supports to help you recover

Enterprise Ireland has put in place a suite of funding supports to help Irish companies adjust to the immediate and future challenges presented by the Covid-19 pandemic. These supports are designed to help businesses stabilise and adapt to the evolving situation, in preparation for getting back on the road to recovery.

 

The Business Financial Planning Grant

The Covid-19 Business Financial Planning Grant is designed to help companies develop a robust financial plan and secure their viability in the short to medium term. The grant, worth up to €5,000, can be used by companies to pay up to 100% of the cost of engaging an approved financial consultant to prepare a plan which can encompass the documentation required to support applications for finance from banks or other providers such as Enterprise Ireland.

The plan will establish the company’s current financial position; examine the negative Covid-19 impacts on the business; establish where the company wants to be in three years’ time; identify a series of actions to be undertaken by the company to mitigate the effects of the current crisis; provide a framework to manage costs and identify funding gaps; and enable management to identify the finance required to sustain the business through the crisis and beyond.

The plan should also include a complete set of financial forecasts for three years.

Eligibility: The grant is open to all Enterprise Ireland clients as well as companies employing 10 or more in the manufacturing and internationally traded services sectors.

How to apply: Contact our  Covid-19 Business Response Unit at businessresponse@enterprise-ireland.com or your Enterprise Ireland Development Advisor.

 

Sustaining Enterprise Fund – funding of up to €800,000

Aimed at giving manufacturing and internationally traded businesses the liquidity and cash resources required to make it through the Covid-19 crisis, the Sustaining Enterprise Fund offers funding of up to €800,000 to eligible companies.

The purpose of the funding is to support the implementation of a Sustaining Enterprise Project Plan which will lead to the eventual stabilisation of the business and a return to viability. The Sustaining Enterprise Project Plan must outline the company’s liquidity needs and explain how the funding will remedy its immediate problems.

Businesses can use the Covid-19 Business Financial Planning Grant to pay for the development of the Sustaining Enterprise Project Plan.

Subject to an annual administration fee of 4% (with 0% fee for the first six months) there is a three-year grace period for repayments on funding, which must be repaid in full by the end of year 5, and the achievement of the objectives originally set by the company

Eligibility: To be eligible for the fund, companies must have experienced a reduction in actual or projected turnover or profit of 15% or more, and/or a significant increase in costs as a result of the Covid-19 outbreak.

In addition, eligible applicants must be unable to raise sufficient capital from the market (or other sources) to meet the funding needs of a Sustaining Enterprise Project Plan.

Companies are not eligible if they were already in financial difficulty on 31 December 2019 or were experiencing difficulties for reasons not related to Covid-19.

How to apply: For further information, contact your Enterprise Ireland Development Advisor or the Covid-19 Business Response Unit at businessresponse@enterprise-ireland.com

 

Sustaining Enterprise Fund – Small enterprise

Similar to the main Sustaining Enterprise Fund, this scheme provides financial assistance to smaller manufacturing or internationally traded services companies for a three to six-month period to support business continuity. Eligibility criteria are the same as for the Sustaining Enterprise Fund, and the assistance is to be used to support the implementation of a Business Continuity Project Plan. Companies eligible for this scheme are also eligible for the larger scheme.

Companies can avail of the Business Financial Planning Grant to pay for the development of their Business Continuity Project Plan.

The scheme offers repayable funding of up to €25,000 to companies with turnover of less than €1.5m and up to €50,000 to companies with annual turnover of €1.5m–€5m.

As with the main scheme, there is a 4% annual administration fee and a three-year grace period on repayment. No administration charges are levied for the first 6 months and the advance can be repaid early if the company prefers to do that. Funding must be repaid in full by the end of year 5, subject to the achievement of the objectives set out in the Continuity Plan.

Eligibility: Companies are not eligible if they were already in financial difficulty on 31 December 2019 or were experiencing difficulties for reasons not related to Covid-19.

To discuss eligibility criteria or any other aspect of the scheme, contact your Enterprise Ireland Development Advisor.

If you are not an Enterprise Ireland client or do not know who your Development Advisor is, you should first contact the Business Response Unit at businessresponse@enterprise-ireland.com

How to apply: You can apply via the Enterprise Ireland Online Application System.

 

Lean Business Continuity Voucher

The new Lean Business Continuity Voucher helps enterprises to identify and implement the measures needed to ensure that they can continue to operate safely during the Covid-19 pandemic.

It offers eligible companies up to €2,500 in training or advisory services from approved providers. The services may take the form of management advice or training of management or staff within the company and must be related to the continued operation of the businesses during the current pandemic. It is expected that the services will be delivered online in most cases.

Project should focus on one or more of these categories;

  • Review of business strategy in light of changing marketplace/supply-chains & customer needs;
  • Introduction of new business practices in order to increase productivity (especially LEAN/Flow);
  • Development of processes for risk assessment and analysis for Business Continuity;
  • Development of working practices for staff safety based on government guidelines;
  • Development of strategy for or investigation of feasibility of doing business online (excluding website development or online marketing costs)

A listing of approved service providers can be found in the Enterprise Ireland Service Provider Directory.

Eligibility: The Lean Business Continuity Voucher is open to small, medium or large client companies of Enterprise Ireland or Údarás na Gaeltachta.

For more information, contact your development advisor or email the Lean & Operational Excellence team in Enterprise Ireland at: businesscontinuityvoucher@enterprise-ireland.com

How to apply: Companies can apply for the Lean Business Continuity Voucher scheme via the Enterprise Ireland Online Application System.

    Watch financial expert, Brendan Binchy and Enterprise Ireland’s finance team in our Accessing Liquidity & Managing Cashflow webinar.

    Managing Cashflow

    Managing Cashflow in a Crisis

    As managers reset the business for recovery, companies need to adopt a lean culture where expenditure is minimised and every cost is questioned.

    One of the greatest risks facing many businesses in the current environment is running out of cash. A company that can’t pay its bills, regardless of how profitable it is, will quickly go out of business. Cash conservation is therefore key to survival.

    While in the medium to longer term companies will have to look at reengineering their business and operational models in order to meet challenges presented by the post-Covid-19 world, the short term is going to see a focus on cash according to Business Financial Consultant Brendan Binchy.

    “There is much more urgency relating to cash now,” he says. “And there are many things a business can do to manage its cash. Almost everyone out there is availing of debt payment deferrals, for example. They are trying to hit the pause button on cash going out wherever they can so that they can preserve the status quo as much as possible. They are also looking at other areas like aged debtors. You almost have to look at it like a company threatened in a pre-receivership condition.”

    Binchy recommends a structured approach to cash conservation and this starts with the balance sheet. “The profit and loss account is a record of a business over a period of time, but the balance sheet gives a snapshot of the business at a particular moment in time.”

    Companies should pay particular attention to their gearing, he advises. This is the ratio of debt to equity on the balance sheet. “The lower it is the better, but losses will erode equity and increase the gearing ratio,” Binchy continues.

    A healthy gearing ratio will allow companies to borrow judiciously in order to bolster their cash position. “This can be very helpful, but companies need to be aware of the associated debt service costs.”

    The next step is to look at asset funding, where they may be scope for some reverse engineering. “Businesses frequently purchase assets for cash during good times,” Binchy notes. “They could be re-financed now with bank debt and this will improve the cash position. Generally speaking, the asset lifetime and the funding cycle should be the same. It is important to remember that trade debt, like invoice financing, is for working capital not capital expenditure.”

    The sales lead to cash cycle is the next area for examining.

    “It takes time for marketing effort to translate into sales leads, buying decisions, billing, and cash collection”, Binchy explains.

     “This can be quite protracted, and companies need to look for ways to get to close sales quickly and speed up invoicing.”

    The supply chain should also come in for attention to slow the outward flow of cash. “Companies should identify strategic supplier relationships, tighten stock management overall, improve workflows, and negotiate new arrangements such as stockholding facilities with key suppliers. Talking to key suppliers and developing strategic partnerships is a very good ongoing strategy for companies. The more they do it the better.”

    And then there are what Binchy calls the common-sense measures.

    “Defer capital expenditure and other spending decisions wherever possible,” he advises. “Companies need to adopt a mean and lean culture where expenditure is minimised, and every cost is questioned. But this must come from the top down and everyone must share the pain and to be seen to share it.” 

    Once those actions have been taken, it is time to put together a budget plan. “Having these measures in place means you already have your fingers on the pulse and you can make a budget plan to take you from where the business was before the crisis to what’s likely to happen afterwards. The most important thing about the plan is that it should be iterative. You’re not going to get everything right first time around. The plan gives you a framework to forecast and plan for what might happen. You can adjust it weekly and monthly rather than having to build new plans all the time.”

    And businesses don’t have to do this on their own. Binchy recommends the Enterprise Ireland Lean Business Continuity Voucher as a good starting point. This offers eligible companies up to €2,500 in training or advisory services to help them identify and implement the measures needed to ensure they can continue to operate during the Covid-19 pandemic.

    There is also the Covid-19 Business Financial Planning Grant, which is worth up to €5,000, and can be used by companies to pay up to 100% of the cost of engaging an approved financial consultant to assist them prepare a financial plan, understand their immediate financial position, manage costs and identify their funding requirement.

    When it comes to cash for the business, Binchy points to the Temporary Covid-19 Wage Subsidy which he says has been very helpful to businesses throughout the country.

    Sources of working capital and loan finance include the €450 million Covid-19 Working Capital Loan Fund and the €200 million Future Growth Loan Scheme fund available through the Strategic Banking Corporation of Ireland. Businesses which have difficulty accessing bank finance can apply for funding of up to €800,000 from the Enterprise Ireland Sustaining Enterprise Funds. There is also a fund for smaller companies which offers funding of up to €25,000 and €50,000 depending on the size of the business.

     

      Hear from financial expert, Brendan Binchy and Enterprise Ireland’s finance team in our Accessing Liquidity & Managing Cashflow webinar.

      manufacturing

      Seismic change on global auto production could offer opportunities for Irish suppliers  

      Continental AG addresses fresh challenges as a result of the Covid-19 pandemic

      The company was forced to shut down all of its global tyre manufacturing operations within a short space of time as a result of the Covid-19 pandemic and has recently begun a return to production. “During that period, we had to wind down operations efficiently as well as implement cost mitigation measures such as short-term work initiatives from national governments, having workers take holidays, as well as unpaid leave along with salary reductions at management level,” says David O’Donnell, Global Head of Passenger and Light Truck Tyres at Continental AG.

      The company is now seeing a welcome but slow return to activity among key automaker customers globally. 

      “We are observing more build-to-order in response to a concrete need for the vehicles in contrast to before, where they were built for an assumed level of demand.” said David O’Donnell

      O’Donnell believes it will be several years before production levels recover. “We will be looking at 2022 or 2023 best case before we get to anything like 2019 volumes. Everybody will have to react to the seismic shift in volumes. We are looking at 70 million vehicles this year versus more than 80 million last year. If you can get used to the current level somehow, then you likely have two years of growth. The question is do you hold your capacity to be able to access more opportunities, or do you reduce your cost exposure in order to go into a new growth mode in a different way? That will put pressure on cost management and will also make them look at systems efficiencies and internal company structures.”

       

      Focus on Agility

      One impact of the global pandemic has been an enforced increased level of agility on the part of manufacturers. “How quickly can you ramp something down? Can you run with a portion of the plant and do that cost-effectively? How do you align it better system-wise to orders?” O’Donnell asks.

      “They might have full orders for a certain vehicle and then change it completely from week to week or month to month. It will take time for people to get over their nervousness to rely on orders and feel comfortable with the new processes,” he adds. “Those who can adapt to that uncertainty will be winners in this situation.”

      He believes this may present opportunities for Irish firms, which have a reputation for agility and flexibility. According to O’Donnell, anything a company can offer in terms of productivity, improving potential efficiency or agility such as adjusting payment terms for a period, holding more stock, or quickening pace of production would be beneficial.

       

      Supply Chain

      Opportunities may also exist in the dual procurement structure and more localised supply chain which could result from the crisis. “When China went into lockdown there were war room discussions in our organisation concerning who’s going to stop the slide first. It was a pivotal moment because you had electronic equipment coming from the huge manufacturing hub of China and that affected the batches in Serbia, for example. The aftershock will see OEMs discussing a change in tactics with their purchasing groups, as well as sourcing from multiple and more local suppliers going forward.”

      Noting that the Trump administration’s policies have already led to a discussion about what operations can companies relocate to the US, O’Donnell says more nationalisation in Europe may bring more opportunities than in the past.

      “A friend and colleague of mine is doing relatively small batch production of printed circuit boards and prototypes. He’s based in Germany and he has had a lot of requests because he is both local and agile as well as an alternative supplier to China. He might be more expensive but he’s offering the flexibility these companies need.”

      But customers won’t be willing to pay higher prices forever. “Once the OEMs are back at full capacity with high volumes again, they will come very aggressively with price discussions as they try to regain profitability.”

      He advises suppliers to be proactive in going after these opportunities. “It’s a question of arguing yourself into that space as a potential partner and bringing the advantages forward. Become ready for agility and be customer-centric by assessing challenges they have, look at the macro picture and present yourself as a local and flexible supplier. If you can do something there, you may have an advantage in winning long-term business.”