In the pre-pandemic world, enterprises were under pressure to jump on the “digital bandwagon” The pandemic and the subsequent lockdown measures have only accelerated the collective push towards digitization. The transformation has graduated from good-to-have to must-have, and business survival is now among one of the top reasons to invest in emerging technologies.
COVID-19 has changed priorities and accelerated the adoption of digital technologies. According to the Digital Acceleration for Business Resilience report that surveyed 400+ business executives across the globe, there has been an increase of over 13 percentage points in the number of respondents who said that digital transformation is now a board-level priority within their organizations, compared to at the start of 2020. `
Reprioritizing Digital Investment – A Critical Ask
Going forward, emerging technologies and new working models will play a key role as businesses transition to more inclusive digital economies. These technologies are poised to play a critical role in ensuring stakeholder and customer trust, keeping the remote workforce engaged and connected, ensuring resilience of operations, and developing a strong foundation for future service and product innovation.
The range of technology solutions implemented by companies will vary based on distinct scenarios and requirements. Further, there will be emphasis on the challenges associated with the transition. Companies need to be able to move to digital quickly and reliably in view of the current business landscape. With speed and flexibility now indispensable to digital acceleration, identifying the potential roadblocks should be a key objective of every digital investment initiative.
According to the HCL Digital Acceleration report, almost 89% of the respondents stated that their organization faces at least one major challenge along their digital transformation initiatives. Data security and governance, legacy technology, lack of skills, and skill managing change are some of the most prominent barriers highlighted by the respondents.
It is safe to say that the organizations that will fare best during the crisis are the ones that revisit their digital investment planning and budgeting from scratch. The entire exercise necessitates active involvement from enterprise leadership, and forward-looking enterprises are taking steps to ensure that digital initiatives get due attention.
One particular sector which has been steadily ramping up investments to be more digitally mature is manufacturing. When the pandemic hit, organizations across the manufacturing sector were compelled to address critical supply and demand challenges with war-like urgency. According to various industry reports and surveys, manufacturers are looking to invest in specific technologies that can help them accurately predict decrease or surge in demand so that production can be ramped up or shifted to an alternative destination as a rapid response to disruptions.
Digital transformation doesn’t necessarily have to be expensive
One of the biggest fears associated with digital transformation initiatives involves significant upfront cost. The fear acquires even bigger proportions in the current business environment where organizations are unwilling to take major investment decisions.
However, while digital transformation does involve cost based on the scope of the project, it does not have to be end-to-end. It is worth noting that the majority transformation projects are often initiated with limited resources as low-cost pilots. They are eventually scaled up based on the results they deliver. When done with proper planning, digital transformation can be largely self-sustaining, allowing every incremental improvement within processes or operations to support the next phase of the transformation by bringing down costs or increasing efficiency and productivity.
Forward-looking enterprises are coming to terms with this realization. As per the Digital Acceleration survey 88% companies intend to reinitiate their digital transformation journey in the new normal, and the majority plans to invest aggressively in at least one (with an average of four) digital technology in the near future. Cybersecurity and cloud computing are expected to witness priority-investments from 57% and 55% companies respectively.
Strategic investments in such technologies can help companies realign targeted solutions to the unique challenges posed by the pandemic. A healthcare startup in India is working on an AI-based non-invasive heartbeat and respiration monitor that allows contactless health monitoring for patients. The solution leverages contact-less sensors to capture body-vitals in real-time without the intervention physical wires touching the patient’s body. The process of collation, filtering and alignment of data to intelligent ML models are done in edge devices.
Such innovation can be crucial in healthcare – an industry that’s already struggling with acute shortage of frontline workers.
Digitization can help foster a faster recovery
Past recessions have shown that controlling costs by enhancing operational efficiency can actually be more effective in sustaining a business through a crisis than depending on conventional cost-cutting measures. Harvard Business Review, in a survey conducted in 2010, analyzed the business strategies that helped corporates recover from three global recessions (the 1980 crisis, the 1990 slowdown and the 2000 dot-com bubble).
They thoroughly studied 4700 public companies and analyzed the data into three distinct phases: three years before the recession, three years after, and the recession years. The findings from this research highlight how focusing on operational efficiency can help a company bounce back from a crisis. Companies that depended on workforce attrition to manage costs had only an 11% chance of delivering breakaway performance post-recession. Those focusing on operational efficiencies over layoffs on the other hand, were more likely to emerge as the winners.
Process automation is clearly the way ahead for companies that seek to score big on efficiency play. Automation projects can help companies realize tangible ROI benefits, offsetting any upfront investments. The working principles of automation are simple: it allows the same work to be performed much faster and with little to no mistakes and provides companies with an opportunity to redeploy human capital resources for high-value tasks.
The business disruption caused by the pandemic can come as a blessing in disguise for progressive companies treating it as a stress test for their infrastructure and operations. The pandemic has helped uncover loopholes across existing operations and value chain. For smart enterprises, these insights can prove critical in helping guide long-term digital investment decisions and involvement from decision-makers in their digital acceleration journeys.
For more insights on how companies can navigate the current crisis through digital acceleration, download the Digital Acceleration report.
By Darren Doyle, Associate Vice President, D& A, HCL Technologies