Summary Bullets:
- Ericsson provided the most level of detail yet on the steps it has taken, both internal and customer-facing, in the wake of COVID-19.
- Advanced planning emerges as a key feature of Ericsson’s approach, helping drive a number of important steps that should serve as a template for managing future crises.
As it released its first earnings report since COVID-19 began its rapid global spread, Ericsson took the opportunity to outline the various steps it has taken, both internally and externally, to plan for the known impacts and to predict the unknown effects. The actions taken by the company, which was one of the earliest to make the difficult decision to withdraw from this year’s MWC event in Barcelona, should serve as a case study for ‘how to get it right’ in the case of a crisis. For example:
Assemble a Team (Early): Ericsson activated a ‘Crisis Management Council’ as well as country-specific taskforces. Decisions were made based on the recommendations of the World Health Organization (WHO) as well as local government mandates. Ericsson asserts that establishing close relationships with local governments and regulatory agencies in countries with critical delivery centers helped them obtain the documentation required to ensure continuity of services to customers.
Restrict Travel (Early): Ericsson imposed travel restrictions to and from China in January and then extended this restriction globally in February. These restrictions for non-essential employees have subsequently been extended through August at least. This also included Ericsson’s early withdrawal from MWC 2020, a controversial – but correct – decision that prompted many other vendors and operators to follow suit.
Encourage Work from Home (Early): Ericsson encouraged its employees to work from home beginning on March 13 and beefed up its workforce collaboration tools rapidly to ensure minimal disruption to ongoing projects.
Use Multiple Supply Sources: Ericsson indicates that its supply chain has remained relatively intact thus far during the COVID-19 crisis. That is in part due to its longstanding practice of ensuring some level of supply chain redundancy through “securing multi-source components and geographically spread multisite product plants.” Meanwhile, Ericsson has been able to get its Chinese production facility in Nanjing up and running quickly, partially resuming operations there on February 9.
Prepare for Delivery Issues: In anticipation of delivery issues, Ericsson increased its level of equipment and component ‘buffer stocks’ and, where possible, moved these supplies to local warehouses in closer proximity to customers.
Build Business Continuity Plans (Early): Ericsson relied on pre-existing business continuity plans which ensured that workloads for managed services customers could be shared and transferred between global and regional network operations centers (NOCs), all of which share the same set of IT systems and tools. The company also implanted procedures that maximized the amount of interoperability testing that could be done remotely.
To be fair, Ericsson is by no means the only vendor successfully navigating the many challenges created by the ongoing pandemic. And the company does concede that it is being impacted by a slowed delivery schedule. However, the company does appear to be doing many things right that should stand it in good stead regardless of how long the current crisis lasts.