Ontario Global 100 is pleased to announce that Tom Jenkins, Chair of OpenText Corporation, has been appointed to the position of Honorary Chair with OG100. Having served as OG100’s Founding Chair, Tom continues to support OG100’s mission, making significant and lasting contributions to Ontario’s and Canada’s business community and economic growth.
In our latest guest blog, Tom provides his insight regarding some of today’s top business concerns, such as inflation, cybersecurity, and global supply chains.
1. Regarding inflation, the Bank of Canada has one prediction while the CEO of RBC another. What’s your take, and how might businesses prepare for both scenarios?
There appears to one scenario that most bankers agree upon and that is inflation. The question appears to be how long and how high. What the central banks ultimately do is open for debate as they can tighten policy very quickly if they so choose. Jack Mintz recently shared a compelling argument (https://financialpost.com/opinion/jack-m-mintz-inflations-double-tax) as to why governments with high debt loads will prefer the inflation option as it will reduce their Debt/GDP ratios without resorting to higher taxes or cutting expenses – very politically expedient, so why not? The issue of course, is for those on fixed incomes and those that cannot price accordingly – ie. businesses that are highly competitive and find themselves as price takers will suffer. When I last spoke with OG100 members in the summer, we talked about rising inflation and the importance of COLA (Cost of Living Adjustment) clauses in maintenance and revenue-side contracts and their avoidance on the expense side of the ledger. Businesses that had the foresight and ability to prepare will come out of this successfully. Easier said than done of course.
2. Cyber-attacks are on the rise at exponential rates. How do businesses prepare in an environment of fast-evolving and increased security threats?
Yes, cyber-attacks are now a permanent fixture in the threat environment for all businesses with the most pervasive by far being ransomware. The shame for many organizations is that the primary fix for ransomware is simply investing in archive technology. It is easily the most pervasive cyber-attack, but also the easiest to recover from. For some reason, many businesses continue to NOT deploy decade-old solutions that exist and work. Proper records management along with archive and business recovery software will save your company money, time, and a lot of pain in the long run. There is no excuse in business to losses due to a ransom ware attack. Apply the simple fix and keep it up to date so you can move on to worry about other risks.
3. Global supply chains are currently in incredible flux – but in every challenge, there lies an opportunity. Where should business leaders focus to best navigate the current situation and set themselves up for the future?
I have one simple word for you on supply chains: RESILIENCY. This is going to be the new distinctive competence that will separate supply chain networks. In the coming year, resiliency will become a new metric that will run alongside efficiency as the figure of merit for a global supply chain. However, resiliency is currently undefined numerically. The simplest form of resiliency is rigorous second sourcing. We used to run all our supply chains during the cold war on this basis, but like so many other things, we sacrificed second sourcing for a single global source at the lowest price. Some supply chain studies indicate that if you are willing to absorb a 3% overall price increase you can have multi-source resiliency and assurance of supply. Think about the math: if you have a second source for 30% of your total supply needs and that source is 10% more expensive then your overall cost increase of that good or service is 3%. The bottom line is that business leaders need to document and explicitly use resiliency measures as part of their marketing, the same way that we use ISO 9000 to denote quality. This will take years to develop global standards, but it is coming and business leaders would be wise to identify second and third sources and create a standard set of metrics that identify resiliency from geographic location, service level agreement, jurisdiction, penalties for non performance etc.