The Volatility Index (VIX) of the Chicago Board of Options Exchange was developed to gauge the implied volatility of the stock market over a short period of time. Nicknamed the fear index, it inspired many investment companies and stock exchanges to create VIX for their own indices.
However, businesses can’t base their decisions on short-term volatility seen in stock prices and commodities if they want to succeed. What might be more relevant is an index that can help gauge the medium and long-term impact on businesses. At WNS, we have developed such an index called Business Disruption Measure or BDM taking into considerations a wide range of disruptive forces that will be in play in 2016 and beyond. The impact of these macro and market factors, collectively called ‘Business Stability Disruptors’ or ‘Disruptors’, would compel CXOs to make adjustments to their business and investment strategies, and gear up for fundamental changes in business models.
To begin with, WNS surveyed over 300 senior finance executives (including over 100 CFOs) across a cross-section of industries to understand which Disruptors could potentially impact medium- to long-term business goals. We determined that there are six major Disruptors that can derail businesses across industries such as travel, banking and financial services, insurance, healthcare and manufacturing. WNS then created the BDM index by mapping these six major Disruptors to predict business uncertainty or volatility.
Based on the survey results, we further identified the top three Disruptors that will push companies to revamp their operating strategies. As business partners, we need to work together with our clients to help them address this evolving paradigm in a comprehensive manner. They are:
- Ever-changing and increasing burden of regulatory compliance
- Evolving customer expectations — need for ‘omni-channel’ experience
- Shift in the competitive landscape due to the entry of technologically advanced companies (such as Google’s foray into the healthcare space)
By identifying and evaluating the impact of Disruptors, the BDM score and the relative importance of Disruptors, help businesses to invest prudently and mitigate business volatility. Companies who are equipped to steer through choppy waters and handle the effects of Disruptors will maximize their shareholder value. But the critical question is, ‘How can companies be ready to cope with the adverse implications of Disruptors?’ Connect with the author here.
To know more, visit us at WNS DecisionPointTM | Top Business Disruptors in Focus