Written by Sreeram Visvanathan, Chief Executive, IBM UK and Ireland
The pandemic continues to dominate our lives and news headlines around the world. The ever-changing pressures of the health crisis, along with changing customer needs and economic volatility emphasise how critical remote working, business agility and digital customer engagement are to business.
Business resiliency plans are continually being put to the test and business leaders the world over are reflecting on the need to build resiliency, flexibility and agility into their organisations. But in the long-term, this must be about more than survival. We must, as business leaders, find ways to transcend survival mode, revive, renew and work to thrive again. And we can start to do that now by applying the lessons we have learned from earlier stages of the pandemic.
Even prior to the pandemic, industries were compelled to innovate as they faced large-scale disruption due to shifting market dynamics. Incumbents faced pressure from ‘digital disruptors’ in what now in hindsight feels like a premonitory precursor of what was to come. And yet the majority of businesses had been taking an incremental approach to technology adoption, avoiding large-scale transformation. With many of our preconceived notions about how things have to be done now being challenged, now is the time to re-think. Essentially, we are being given a blank slate.
Necessity is the mother of invention – and never has this been more true than it is today. Throughout history, there are many examples of businesses that have reinvented themselves to face a crisis or businesses and societal that were born out of a need identified in a crisis. Without a doubt, this is the biggest crisis of our generation. And from a technology perspective, innovations including cloud, blockchain, IoT and more, setting aside emerging technologies like quantum and 5G for a moment, are reaching a stage of real maturity and robustness. They are there for the taking.
Considering technology as a life-jacket for survival offers a useful vantage point. In fact, a recent Omdia survey of over 300 UK companies commissioned by IBM discovered that 88% organisations agreed that technology helped them to mitigate the impact of the crisis. And 60% of organisations are considering changing their business and operating models, citing this as one of their main challenges beyond lockdown. New digital products and services, an intelligent supply chain, and omnichannel customer engagement are seen as priority objectives.
How have individual sectors risen to the unique challenges presented by the pandemic? And how can organisations in industries that found themselves lagging behind in terms of digital transformation progress take advantage now?
Digital by default
According to the same Omdia study, Banking and Finance organisations appeared to be leading the charge as compared to other industries, with over 50% having already completed or well into the advanced stages of their digital transformation programmes. However, almost four in ten (37%) of Financial Services organisations polled agreed that the pandemic highlighted shortfalls in their already advanced digital transformation projects. The Financial Services sector is dependent on both the economic health of businesses and on an uplift in household expenditure. Organisational agility, therefore, is a critical capability, but it can present a significant challenge for such a highly regulated a sector. In fact, almost half (44%) of business leaders in this sector see complying with workplace requirements and legislation as a main inhibitor to transformation progress.
Budgets may be constrained, but enhancing operational resilience and business continuity is a top priority post lockdown, particularly among the largest Financial Services organisations, marking a dramatic shift in priorities compared to those of only six months ago. Almost half (42%) are planning to significantly increase investment on workflow and business process management to enhance organisational agility and a similar number (48%) cite a need for more digital components in their product and service offerings, expressing a shared goal to become ‘digital by default’. More than half (61%) of respondents cited cybersecurity as a key investment area, noting that they plan to increase their investment in threat detection systems, while a similar number (53%) plan to increase investment in AI and machine learning to support customer driven insights.
Rightsizing for the future
On the one hand, the pandemic was punishing for most physical retail stores and call centres due to social distancing measures, and on the other, there were recruitment opportunities as e-commerce activity skyrocketed under lockdown. Savvy retailers quickly spent time “rightsizing” their footprints to strike the optimum balance between physical versus digital in order to improve margins and ensure future growth. Converting or enhancing offerings with digital technologies and re-assessing what the changing consumption habits mean for success in the short, medium and long terms is proving essential for retailers. In fact, 86% of our survey respondents agree that technology can help mitigate the effects of a crisis. However, at the start of the pandemic, just one third (33%) of companies in the sector reported being fully prepared for engaging customers ‘anywhere’. Given their accessibility to customers, retailers with established and advanced digital experience (DX) programmes in place were able to flourish, while those without (21%) were at a distinct disadvantage when the pandemic hit.
With 71% retailers anticipating turnover to remain below average for the foreseeable future, any efforts taken today to improve digital operations will help retailers go from ‘survive’ to ‘thrive’ mode. And indeed, retailers in the early stages of their digital transformations admit that they should have invested earlier in digital, data-driven and cloud technologies. Technology adoption is escalating, with two thirds (75%) of retailers investing in accelerating agility and efficiency, enhancing IT resiliency and business continuity, and 62% improving engagement with customers ‘anywhere’. 95% anticipate increased investment in AI specifically to gain better supply chain insights, and the same percentage plan to increase investment into cloud applications and cybersecurity defences.
The time to act is now
With organisations across all industry sectors now considering the extent to which a lack of progress in digital transformation hindered their pandemic response – and what digital investments can be made to improve responsiveness to future crises – the time to act is now. We believe businesses will emerge from this pandemic to be smarter and stronger. There are many challenges ahead, and doubtless, our business and societal environment will be indelibly altered. And Covid-19 is a turning point for digital transformation. What we have been given is a mandate for change.
Putting the lessons learned into practise is less about a restart and more about rethinking how business can emerge smarter and thrive. Truly transformational change is never easy, but by learning from each other, being willing to adapt our mindsets, and taking an agile approach, we can move forward. As business leaders the time to act is now. The question is how far will each of us open the aperture to new possibilities? Will we be incrementalistic or transformational in our adoption of mission-critical technology? How far will we challenge the art of what’s possible for our organisations? It’s up to us. Let’s rethink together.