COVID-19 has greatly impacted businesses across the globe. As the situation in Hong Kong is slowly coming under control, it is time to evaluate and consider what can be done to help your business recover, and measures that can be taken to sustain and minimise business disruption when facing critical challenges such as this.
Government grants and subsidies
The two rounds of Anti-Epidemic Fund announced by the HKSAR Government on 21 February 2020 and 18 April 2020 allowed businesses to obtain much needed subsidies to elevate their short-term cash flow problems through various industry-specific relief measures and the HK$80 billion Employment Support Scheme.
However, have you considered how to 'future-proof' your business, including applying for other IT-related grants that will bring longer-term benefits? COVID-19 has highlighted the importance of using technologies and technological solutions to improve productivity, upgrade or transform business processes in many enterprises.
It is essential that companies adopt the advancement in technology as it not only strengthen the competitiveness within the market, but also allows their business to be more efficient and sustainable. Despite so, many companies are hesitant to commit to business transformation, simply because the related investment costs could be very high. If that is the main reason, please be reminded that there are available government schemes and grants that businesses can utilise.
Distance Business Programme
Under the Anti-Epidemic Fund, the Government launched the Distance Business Programme (D-Biz Programme) which aims to provide funding and support enterprises to adopt IT solutions for developing distance business. The Programme covers 12 categories of IT solutions for distance business, with a view to supporting enterprises to continue business and services during the epidemic. These categories include online or cloud-based financial/human resources management systems, remote document management, cloud storage and remote access services, virtual meeting and conference tools, and many more. More details on the application are expected to be announced shortly.
Technology Voucher Programme
Companies could also consider to make use of the Technology Voucher Programme 科技券計劃 (TVP) which aims to subsidise non-listed local enterprises/organisations in using technological services and solutions to improve productivity, or upgrade or transform their business processes (https://www.itf.gov.hk/l-eng/TVP.asp).
TVP was first announced in the 2016-2017 Budget, and since 1 April 2020, the Government has not only relaxed its requirements, but has also further enhanced the TVP, increasing the funding ratio in each approved project from two-thirds to three-quarters, and at the same time, increasing the funding ceiling from HK$400,000 to HK$600,000.
As with all grant applications, the process can be tedious and it may take up a significant amount of time to understand the requirements and prepare the necessary paperwork. Companies could therefore, consider searching for a business partner with experience to advise them on the process, leading and assisting them through in the steps and collecting required application documents for submission.
Strengthening ability to face business disruption
Some biggest takeaways for companies during this pandemic would be the importance of:
► Business continuity plan (BCP)
Some businesses may already have a BCP in place, but never before has it been tested in such a sudden and prolonged way, while some others may find it difficult and too costly to put one in place. Moving past this pandemic, businesses would have a clearer understanding of what works, and what needs to be improved so as to prepare their organisation for future disruptions.
► Distance business enabler
The sudden onslaught of changes gave companies little time to ensure that their IT infrastructure could handle the onslaught of demand as businesses have had to operate and run their teams in a dispersed manner.
Companies can look into investing in IT solutions and infrastructure that would allow business be operated and managed remotely, employees to work offsite, such as secured web-based Enterprise Resource Planning (ERP) system, online collaboration tools that would allow reports and documents to be circulated in an electronic format, video and tele-conferencing tools, web-based processing facilities and e-signature arrangements for review, approval and signing processes, cloud storage, etc.
Not only core business functions are important to maintain. It is equally important to ensure that back office functions are handled in a continued and effective manner. In addition to or other than just looking into improving IT systems and infrastructure, companies can also look into outsourcing their process driven but yet important back office tasks such as invoicing, collection management, payroll handling, payment processing, accounting and financial reporting etc.
During and after a crisis, it is important to free up time of your staff to focus on meaningful strategic work. For many businesses, it will also help a lot if they can convert committed fixed costs to flexible service fees, centre own IT spending on core business operating system and infrastructure while riding on capabilities, readiness and professionalism of service providers who have already invested heavily in IT infrastructure, solutions, people and crisis management plan for carrying out required processing and compliance tasks.
In summary, do not miss the chance of utilising the government grants and subsidies that are available and relevant to your businesses to ease your short term cash flow problems. Seek professional help if you have difficulties or resource constraints in handling the application. Look into investments and working alternatives that your business may benefit from on a longer term basis.
How can BDO help?
BDO is experienced in advising clients on TVP Funding application, and also offer assistance in applying for other government grants and subsidiaries such as those under D-Biz Programme, Employment Support Scheme etc. Our Business Services & Outsourcing team has 40 years of experience in delivering quality and personalised services to companies which elect to outsource their business process driven processes (https://www.bdo.com.hk/en-gb/services/business-services-outsourcing). If you are interested to explore into these areas, please feel free to contact your existing contact at BDO or contact our team at [email protected], or +852 2218 8288.