The crisis has forced us to work in accordance with new procedures using new technologies. Business processes, such as alternative investment capital, were redesigned in an unplanned revolutionary manner and at unprecedented speed.
A positive effect of the pandemic has been the rocketing digital adoption with levels that previously took several years to achieve being arrived at within months (McKinsey Digital, 2020). When asked why their organisations didn’t implement these changes before the crisis, the majority have said that they weren’t a top business priority. The crisis removed that barrier.
Businesses are proving to be more agile and adaptive as digitalisation transforms the world of work, increases process efficiency and improves data transparency, and requires employees to acquire new digital skills.
As a result of digital transformation, fundamentally new capabilities are created. It is not technology in itself that changes an organisation, but it enables new processes to be adopted, contributing to cultural and social transformations. The true value of technology is determined by the increased capability it brings to a business.
At the same time, the pandemic has been a reality check for companies that have been reluctant to embrace digital transformation and now find themselves woefully unprepared.
Going digital in itself isn’t a panacea to all that ails businesses in the current economic environment. They do, however, have significantly more tools at their disposal to not only weather the storm, but to come out the other side stronger.
Crisis breeds ingenuity, and good ideas put into practice can propel any business to breakout performance. Organisations that rest on their existing digital laurels can be surpassed by those that invest in adapting their digital capabilities for the post-coronavirus future.
Organisations that embrace digital solutions have greater resiliency in the face of adversity, a major competitive advantage enabling them to recover faster and pivot from playing defence to chasing growth. The main advantages include:
- Efficiency: digital technologies streamline operations and automate manual processes- resulting in greater speed, less waste and more focus on revenue-generating activities.
- Productivity: With employees already set-up to work remotely, focus can switch to leveraging collaborative technology and tools to maximise workforce productivity.
- Added Security: Better prepared for and more resilient to the proliferation of cyber threats.
- Awareness of Customer Needs: first party data is unique to your business and gives a clear insight into your customers and the types of products or services they ultimately want.
- Agility: Data-driven insights allow faster decisions and the implementation of the required changes. Digital organisations have a built in cultural flexibility to adapt or change course as and when required.
Fortune Favours the Brave
Though it may seem counter intuitive, crisis is the ideal time to double down on digital transformation. Rather than putting digital transformation plans on hold, organisations need to go all in.
It shouldn’t be prohibitively expensive. Some of the most successful transformation projects start with low cost pilots and limited resources that are scaled up once the kinks are worked out and the results are proven. Done in the right way, digital transformation can be self-sustaining, with each incremental improvement paying for the next leg of the journey.
You can actually save money. Past recessions show that controlling costs by improving operational efficiency—a task for which digital solutions are perfectly suited—is more effective in sustaining businesses through financial turbulence than traditional cost-cutting measures alone.
Business reinvention isn’t always a choice. Many businesses are experiencing supply chain impacts, forced shutdowns, a significant pullback in consumer spending, or all of the above. To counter these setbacks companies need to shift focus to their existing digital channels or make a bigger pivot to a digital business model.
There will be no “return to normal”. Wide-scale digital adoption—will outlast the pandemic. Savvy organisations will focus now on leveraging advanced analytics to extract insights from their customer data and continue internal and external data integration efforts to develop a more holistic view.
Continuing to experiment and innovate. Digital solutions will enable businesses to come out of the fray stronger, more agile, and more customer-centric than before enabling companies to stay ahead of their competition.
The 4th Industrial Revolution
As covered in our previous article – How to profit from the 4th Industrial Revolution – emerging technologies, digital innovation, and technological ecosystems are bringing the majority of value for businesses. Businesses were already using or planning to leverage Robotic Process Automation (RPA), Artificial Intelligence, and Data analytics to make their processes and their decision-making more efficient and transparent.
Businesses are now keener to use digital automation platforms, which include the above technologies.
COVID-19 Has Brought Forward Digital Transformation by 5.3 years
A recent study by cloud communications platform Twilio surveyed over 2,500 businesses globally. The analysis provides a snapshot of how businesses have addressed the complex challenges posed by the crisis and how they will continue to evolve moving forward.
Customers in nearly every industry have had to identify new ways to communicate with their customers and stakeholders – from patients, to students, to shoppers, and even employees – essentially overnight. The scale, speed and agility of the Cloud has enabled organisations to innovate faster than ever.
COVID-19 was the digital accelerant of the decade. COVID-19 accelerated companies’ digital communications strategy by a global average of 6 years. 96% of UK enterprise decision makers believe the pandemic sped up their company’s digital transformation.
Previous inhibitors to innovation have been broken down. Almost four in five UK respondents say that COVID-19 increased their budget for digital transformation.
COVID-19 propelled some industries further than others. Those accelerating their digital transformation most significantly in response to COVID-19 were tech companies (78%), followed by energy (77%), healthcare (74%), construction (71%) and retail (70%). Notably, the greatest acceleration in digital communications has been seen by construction businesses (8.1 years) and energy (7.2 years).
Digital technologies have opened up ‘definite’ future remote work opportunities. Almost all (99%) of businesses surveyed agreed that digital technologies will open up a future of continued remote work.
Digital communication is the new lifeblood for business. Almost all global companies (95%) are seeking new ways of engaging customers as a result of COVID-19.
Omnichannel communication is taking on new importance. Digital communication covers online content, email, video, social media and SEO/PPC marketing. 92% of UK businesses say their organisation is likely to expand digital communication channels as the world reopens. On average the UK saw 5.9 different channels increase in usage dramatically during the pandemic.
How COVID-19 has pushed companies over the technology tipping point—and transformed business forever. In just a few months’ time, the COVID-19 crisis has brought about years of change in the way companies in all sectors and regions do business accelerating the digitisation of their customer and supply-chain interactions and of their internal operations by three to four years.
Necessity is the mother of invention, and the pandemic has been evidence of that.
The crisis has prompted businesses to break down the cultural barriers that previously stood in the way of adopting new digital solutions. This accelerated digital transformation offers a positive outlook for the future – armed with technology, businesses will now be much better-placed to adapt to any unforeseen challenges that may come their way.
The COVID-19 pandemic has exposed a clear digital divide: those companies which had already invested in digital operating models have fared much better than those which had not. In fact, for many businesses, the continuity of operations critically depends on their digital capabilities.
Organisations have to change, now. There is no option to continue on as they did before. It has to be done to preserve the business and the future of the business.
Boards and markets are taking note, and consequently digital transformation is likely to be one of the most strategic topics on the boardroom agenda. 69% of boards say the effects of the pandemic together with the ensuing economic and social crises are accelerating digital business initiatives. Before the pandemic most businesses moved their digital strategies forward at a steady pace with leaders wanting proof of success before investing further.
The current world context is pushing companies to make better-informed, faster decisions to survive in a rapidly changing environment.
As organisations begin to shift from the recovery phase of COVID-19 to the renewal, many are focused on what comes next and capitalising on the changes made to the business during COVID-19.
Disruption is useful: We need it to make progress. (See Creative Destruction – How Crisis Accelerates Innovation) We have an opportunity to make things better, rather than falling back on what worked before. Over time, we will build a new set of business practices, forever changed by COVID-19.
As the dust settles on 2020, a year truly like no other, many businesses are realising how agile and adaptive they have become. Others are realising what they need to do to thrive. A pragmatic optimism is emerging as businesses use existing digital capabilities as building blocks for the future. Digital transformation allows businesses to think big as we enter the recovery phase. Digitalisation can enable a re-imagined, more agile business model embracing opportunities that have suddenly become possible.
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Has COVID-19 Accelerated Digital Transformation? Renata Gabryelczyk University of Warsaw 15 October 2020
How COVID-19 has accelerated digital transformation Ryan Hiiginson Tech Radar 09 October 2020
Why Now Is the Time to Accelerate Digital Chris Howard Gartner 10 September 2020
COVID-19: The Perfect Storm for Digital Acceleration Sushant Rabra KPMG 01 May 2020
COVID-19 Accelerates Digital Strategy Initiatives Laurence Goasduff Gartner 06 November 2020
Coronavirus accelerates digital transformation Computer Weekly 25 August 2020
How COVID-19 has pushed companies over the technology tipping point Mckinsey 05 October 2020
COVID-19 has sped up digital transformation by 5.3 years Michele Grover Twilio IOT News 23 July 2020
Accelerate digital to increase resilience Dr T Contzen Deloitte 2020
COVID-19 has accelerated digital adoption – the time to transform is now Janusz Moneta Google July 2020How
The COVID-19 pandemic has accelerated digital transformation Business Process Management 13 August 2020
COVID-19 is Accelerating The Rise of the Digital Economy BDO May 2020