COVID 19: The Catalyst of a Global Digital Evolution
Opinion Analysis by Siriine ElKhalili, Contributor
March 14th, 2021
The COVID-19 pandemic has introduced new innovative ways in which companies from various sectors do their business. MIT principal research scientist, George Westerman, described a digital transformation as a “caterpillar turning into a butterfly” when done in the right way, but also a “really fast caterpillar” when done in the wrong one. Following the end of this pandemic, we have yet to see which business will fly with a set of wings.
By the end of March 2020, digital platforms exploded with Zoom’s shares rising to 112%, Slack adding 9,000 new customers in its first quarter, and an elevated demand for video-conferencing apps like Tencent’s, WeChat Work, and Ding Talk in China. There were several interesting finds on COVID’s effect on enterprises, in which the top 3 positive impacts included, according to an IDC survey, “improved corporate ability of long-distance collaborative work, gaining ability of online marketing and business development, and a wide recognition of the value of digital transformation and information technology among all employees”.
In reference to a “McKinsey Global Survey of executive”, the crisis pushed their firms to adapt in which they managed to accelerate the “digitization” of supply chain alongside customer communications and internal operations by over 3 years. They were also capable of expanding their ”digitally enabled products” by an astonishing 7 years. Not only did the respondents satisfy new market demand, but they also expect to maintain the changes they have made in the long term and have ongoing investments to ensure that happens. The funding for digital initiatives increased heavily, exceeding the number of individuals in tech roles as well as that of customers and cost increase. Technology has taken a strategic vitality in the world of business and not just as a method of cost reduction.
COVID19 Effect in the Digitization of Customer Interaction Source: McKinsey & Company (October 5th, 2020)
Surveyed results show the drastic user shift to online channels and the organizational responses, as well as the advanced adoption being years ahead, especially in Asia. “Respondents are three times likelier now than before the crisis to say that 80 percent of their customer interactions are digital in nature”. In the book “The Technology Fallacy”, an argument was made about “digital disruptions” where they are not perceived as a simple “bump in the road” and then things went back to “normal”, but rather as “the new normal”.
CEO of Zapier, Wade Foster, voices his concern that the present pandemic driven method will cause mistakes in remote work implementation. This might discourage some organizations from maintaining this policy when the crisis subsides. He explained, “The one thing I am worried about is that because it’s being foisted upon us, there will be companies that are simply not set up to do this well. I worry they will say, ‘Remote cannot work’”.
In 2011, Iceland faced a volcanic eruption in which it led to air travels in Europe shutting down for a week. KLM Airlines responded by using Twitter to reach out and communicate with customers since their call centers were overloaded. The airline then opted out of using the social media platform after the crisis ended. However, after six months, the CEO wondered why they avoided using something that brought a lot of marginal value, which led to KLM investing in Twitter as a component of its customer service foundation.
The coronavirus has also created a “stress test” regarding the digital transformation investments that organizations made, in addition to the rise in the cruciality of specific areas, addressing safety and health. An interview response stated, “when the tide goes out, you see who’s been swimming naked”; hence the companies that have been talking heavily about their digital transformation in the past will be exposed to what they were capable of accomplishing under the present circumstances. Deloitte interviews with senior executives imply that companies that will face drastic hit from the crisis, will simply “weather the storm” and return back to their pre-coronavirus business model, whereas individuals and enterprises that will emerge stronger are looking at a thriving future with digital reforms.
Similar to how a near death experience can provide a wake-up call for a person to change their current lifestyle, the coronavirus can offer an opportunity for new business to shift to structures and fundamentals that will optimize their performance.
Sources:
https://digileaders.com/how-covid-19-is-shaping-digital-transformation/