As technologists and business strategists emerge from the immediate scramble of scaling up distributed workforces in response to the COVID-19 crisis, they’re confronting the even more daunting task of adjusting digital transformation strategies and business models for sustainability in a post-pandemic world.
While everyone faces a great deal of economic uncertainty, and many industries are already being rocked by revenue standstill stemming from the public health measures to flatten the infection curve of COVID-19, analysts and experts believe that innovation is what will see the business world through the rest of 2020 and beyond.
In spite of near-term cash preservation stances at many organizations, leadership will still find budget to send many digital transformation efforts forward in the coming year. Here’s what’s happening, and why you’ll want to step up your efforts as well.
Transformation is innovation at scale
Necessity is the mother of invention, and digital transformation is a way of achieving innovation at scale, said Shawn Fitzgerald, research director for IDC’s Worldwide Digital Transformation Strategies practice. Even in just the first few weeks of widespread pandemic market interruptions, there’s already evidence of business innovation in action, he said.
“I’ll give you a great example. Hand sanitizer; good luck finding it, right? Well, all of a sudden we are seeing these spirit producers that make consumable alcohol turning what was once a waste stream of their production byproduct into a new source of value because the demand-supply curve for hand sanitizer is completely out of whack.” This is happening in real time, to satisfy an acute demand.
Fitzgerald is one of the lead authors of IDC’s recent digital transformation predictions report, “IDC FutureScape: Worldwide Digital Transformation 2020 Predictions.” While that report was written well before coronavirus was on anyone’s radar, many of the predictions included therein are actually even more prescient now, he says, with some adjustments, of course.
“The predictions themselves still have the right focus and gravity, but their relative priorities—and the timing for each—may shift because the dynamics of the world has shifted.”
How the pandemic changes things
For example, one of IDC’s 10 digital-transformation predictions is that most organizations are fast-tracking the support of their digital employees. That’s now more important than ever as the workplace goes remote, said Joe Garber, global head of strategy and solutions for Micro Focus.
“The top priority for organizations in a post-pandemic world will be to digitally transform in support of a new working paradigm. More business will be completed virtually, more traditionally in-person events will be conducted online, and more employees will be working from home.”
At the technical level, this is going to require IT to work extremely hard to bolster performance for radically changed traffic patterns.
“The primary impact in supporting more remote workers is to significantly increase traffic through network bottlenecks such as firewalls, gateways, and VPN devices. Most corporate networks weren’t designed with the scenario we are now facing in mind, where up to 100% of office workers are telecommuting.”
And so IT departments are in a mad dash to stress-test their networks, find bottlenecks, and mitigate them through new policies and infrastructure investments, he said. Companies will need to bake in more proactive performance monitoring to keep remote workers productive over the long haul.
Cultural issues at play here too
Beyond that, there are also more fundamental business culture issues that will likely drive some big adjustments in leadership styles, processes, and procedures to help digital workers get things done remotely.
“The priorities and the things that we need to do are still the same, but the modality with which we’re going to engage one another to get there radically shifts because of this pandemic.”
But that’s not going to come without some bumps in the road. For example, memes circulating on social media joke that maybe this is the time when some people finally realize that most of their meetings really could have just been emails all along. To which others reply irritably that, no, they’ve been in Zoom meetings all day long.
Early evidence at companies such as Hugo, a connected meeting-notes company, suggests that its customers are increasing some meetings and decreasing others, said Darren Chait, COO and co-founder of Hugo.
Across companies, the volume of external meetings—with clients, partners, and vendors—has decreased, while the number of internal meetings has increased.
“[This is] a sign that teams are struggling to resume normal business operations.”
Pandemic: The mother of invention?
However, it is just this sort of widespread friction that springs up during times of crisis that will accelerate transformation in ways not possible during times of calm, said Kevin Grice, director of digital transformation at Trace Solutions, which develops property management software.
“Large organizations are highly resistant to any procedural change, so it usually only comes about in response to a crisis. The current pandemic is just such a crisis.”
The need to work from home brings an immediate requirement to develop new online procedures and processes. The sooner companies adopt digital transformation, “the easier their lives will be.”
This is completely in line with IDC’s Fitzgerald’s thinking that 2020 will have enterprises working to emphasize cultural traits such as empathy, empowerment, innovation, and customer data centricity.
Others agree, stating that many organizations will come into the post-pandemic reality with stronger corporate cultures.
Without the physical office bringing people together, companies “will implement efforts—some extraordinary—to shore up their common values and unite people based on something other than colocation,” said Steve Cooper, CEO of NextUp Solutions, which runs training courses for businesses undergoing digital transformation.
Distance working will trigger a renaissance of employee-centered initiatives, and since office, commute, and travel expenses have been slashed, “companies will be able to justify investments in programs that unite people,” Cooper said.
Some tech will get a boost, too
As organizations work through the highest immediate priorities of engaging the remote digital workforce and facilitating shifts in culture, many are also likely to hasten some investments in other technologies that will help them change the modalities of how work gets done.
For example, Fitzgerald said, IDC’s prediction that many enterprises will be working to achieve AI at scale still applies in 2020 as businesses increasingly virtualize how people are interacting. Shoulder-to-shoulder work will now give way to AI.
“Everyone will be looking for ways in which that task type of work can be automated with robotic process automation that incorporates AI.”
The goal is to make sure that it’s dynamic, as opposed to traditional automation that was static and not responsive to the changes in context around it, he said.
Just how far those investments are going to go will be up for debate, and analysts including Fitzgerald are wary of making any kind of concrete predictions on spending levels until after coronavirus infection rates start to peak.
Certain initiatives will be put on hold or scaled back while uncertainty reigns. For example, while Fitzgerald believes that some organizations may be investing in platform modernization to support the business during this time of economic transition, cash preservation will be key, and some CFOs may hold their organizations back on that to capture more depreciation from existing assets.
Uncertainty still reigns
This is where some previous predictions go out the window until uncertainty starts to clear up.
“While the dollars may contract because of the uncertainty, I think an increased emphasis on those other attributes—of people, process, data, and governance, and threading it all together with the technology for that true value realization—is going to be emphasized, if you will, because of the situation we’re in.”
To read more about IDC’s digital transformation predictions, download the free report. Comment below to get a conversation going about how you think current conditions will shift digital transformation priorities in your industry.