At the outset of 2020, most companies expected business as usual. For many of them, digital transformation was in the plan for the year as something worth exploring or taking a small dip into. In fact, some had been thinking about it for a while, but had been procrastinating: there were always other, more urgent, matters. Other firms saw it as an arena that warranted some projects, but certainly not as not their top priority. Quite a few, however, basically still deemed digital transformation irrelevant for their markets and businesses for years to come. Business as usual was good enough and here to last, so they thought.
And then the pandemic hit. All of a sudden, customers were locked up at home and turning to digital as their foremost means of purchasing goods and services. Coworkers too had to stay at home and had to be offered remote work connectivity. And suppliers were also at home and required electronically-based interaction. Organizations had to implement solutions they had dismissed or neglected in record time. According to a global McKinsey Survey, for many of these changes, companies actually moved 20 to 25 times faster than they thought was possible before the pandemic. In our consulting practice, we saw more than one of our clients move forward with digital transformation projects that had been shelved or left pending indefinitely at short notice and with remarkable speed. Yet a significant number of companies are still struggling with putting together a digital transformation strategy as opposed to simply generating isolated ad-hoc solutions to immediate problems.
One key aspect that all decision-makers have to internalize and act upon is that changes brought about by the COVID pandemic are here to stay. In the aforementioned survey by McKinsey, between 50 and 60 percent of respondents stated that they expect changes in things such as new customer needs, remote work / collaboration, migration to the cloud or online purchase of products and services to stick in any future scenario.
In a nutshell: disruption is here to stay and companies have to build coherent, comprehensive digital transformation strategies as opposed to mere tactical, temporary responses. Plus, the speed of digitalization has increased significantly and thus the race toward digital transformation will require greater agility than ever.
A case in point of how companies are responding effectively in a tactical way, but lack a deeper and comprehensive forward-looking approach is the collection and use of data. We have seen businesses in the media or e-commerce spaces experience enormous growth in traffic to their online properties. While they may have conducted design and/or capacity adaptations to handle the much larger flow of visitors, they still do not have a well-thought out data strategy. This is to say, they may not be collecting the right data, let alone have a plan to put them to good use because they have not yet defined what they want from data: what data are of value to them, how to best collect them, arrange them and utilize them in decision-making and further business applications such as personalization or the acquisition of new online customers.
The impact of the pandemic has been asymmetric in terms of economic activities and industries. While clearly travel, out-of-home entertainment and physical retail, for instance, are losers as economic activities, others, such as e-commerce, health care or cleaning products are booming. Yet, the pandemic has been egalitarian in that it has forced all industries to take some kind of steps toward digital transformation. How they tackle this challenge will determine if they will survive or not, thrive or not. Indisputably, many businesses will outright die as a result of the COVID pandemic. In some cases, they sadly had procrastinated too long. Others will get a second chance. Smart businesses will use this opportunity to build up the right capabilities and invest in digital competences in a cohesive
and holistic way that reflects a true digital transformation strategy and not just a collection of random or merely tactical digital initiatives.
Joke has it that the true leader of digital transformation in most companies has been the virus.
This may be true (and funny) to a certain extent. But in the end, it is irrelevant: what truly matters is how we drive digital transformation going forward, using the pandemic as an initial impulse that finally truly led us to action. The important thing is, as Nike would put it: to just do it. If you are unsure as to where to start, at Wonder Digital Transformation we can help you get a clearer picture and devise a road map. The clock is ticking.