Six months ago, if you had asked, “Who is driving your digital transformation?” the response would have been entirely different from today. Now, the response is: “COVID-19!”
In the last two months, McKinsey’s research published information confirming that companies have “no time to lose and the imperative to accelerate their digital transformation now.” In this article, I summarize McKinsey’s findings and the question of who’s driving your digital transformation?
COVID-19 has turned the world upside down. Yesterday’s ways are not the new normal of today. For one thing, many companies were still in the early stages of digital transformation. So, with COVID-19, companies have had to fast-track their status to keep up with the demand of working remotely. According to DMEXCO, 70% of executives from Austria, Germany, and Switzerland said “the pandemic is likely to accelerate the pace of their digital transformation.” A key lesson is that moving quickly during any crisis is a necessity.
Who’s driving transformation?
Because of the crisis, companies have been thrown into moving forward digitally in a matter of three months. Many industries have had to adapt to new rules and requirements to keep up.
- Banks went remote during lockdown and customer service was by appointment only with social distancing and other measures in place.
- Numerous food stores upped their online orders and delivery.
- Universities and schools have had to adapt to online teaching and discover new platforms to keep up.
- Restaurants were mostly takeout if not closed in many countries.
Moving forward is the next phase. As countries ease lockdown measures, the question is how do companies get back to normal—or some version of normal? According to McKinsey, three pillars of change will need to be addressed.
- COVID-19 has changed the way we interact with the world. Let’s face it, digital use is now on the upswing. Less contact and interaction are the norm. These days, more stores are asking for credit card payments only instead of cash to avoid hand to hand contact. According to McKinsey, “75 percent of people using digital channels for the first time indicate that they will continue to use them when things return to “normal.” Companies need to be up to snuff to compete in a digitally changing world.
- As some companies deal with financial woes because of the crisis, many companies will deal with the overload. Navigating the landscape of digital transformation is uneven because of the forecast and the unpredictability of the future. New data must be built from the ground up to adjust for the future to make sound decisions.
- Most companies had to go remote during the crisis. Many people are still working from home based on Government recommendations. Companies have had to adapt to this fact and rapidly mobilize to deliver results. Companies are adapting to remote working and deciding if this will become the norm.
90-day strategic plan
To adapt to the new order, McKinsey offer’s a 90-day plan.
- Customer’s expectations are changing, so companies need to refocus digital plans to adapt.
- AI can improve business operations.
- Choose your modernization selectively.
- Organizations can be increased strategically.
Refocusing an enterprises’ mindset and making way for a new strategic plan is necessary to adapt to the future. Companies have to think swiftly and move vigorously.
The COVID-19 crisis has given enterprises a roaring wake-up call and digital channels now need to be more flexible to adapt to a customer’s needs. Digital is no longer something to put off in the next quarter or next year, it has to happen now.
B2B Digital Interaction
On the B2B side, the numbers are up for digital interaction with B2B customers. More broadly, we know from McKinsey’s research into economic downturns that “companies that invest when valuations are low outperform those that do not. These companies divested underperforming businesses 10% faster than their peers early in a crisis (or sometimes in anticipation of a crisis) and then shifted gears into M&A at the first sign of recovery.”
A new generation of digital consumers
Let’s face it, the time for digital customers is now. The McKinsey consumer-sentiment analysis has revealed, “whole new consumer groups trying out digital products and services for the first time.” Companies don’t have the luxury anymore of testing and waiting for long-winded results. We need value and proposition to propel digital consumers forward.
As McKinsey stated, “The time of “digital-lipstick” is over.” Companies that fall behind in their digital efforts need to adapt at warp speed. What was once an idea to go eCommerce for a company is now a reality. Online businesses exploded and are now interconnected for cross functions.
- Reprioritizations to free up the cash: Companies are now finding a huge potential to free up cash and IT costs. By extending hardware- and software-refresh cycles, rapidly renegotiating vendor contracts, and restricting cloud workloads by turning off non-critical jobs, cost-effective solutions are possible.
- M&A is coming: Mergers and Acquisitions are now imperative. No company can accelerate the delivery of all its strategic imperatives without looking at M&A to speed them along. This is particularly true with a digital strategy. Now’s the time for companies to gain talent and build capabilities for the future.
- Learning at scale: The real-time ability to learn during a crisis is the one ingredient that can turbocharge your ability to scale quickly.
- Cybersecurity remains a priority: Continue to pay attention to cybersecurity. Much of the rapid IT work carried out during the COVID-19 crisis might have created new cyber-risk exposure. Companies need to think outside the box to keep up with this threat.
- More time to focus: We have seen that the reduction in time spent traveling has given CEOs and their top teams more time to focus on new initiatives. This is a positive sign.
Scaling in the time of COVID-19: To scale properly, companies have to adapt to the new digital identity. There’s no time to sit around and ponder, act now.
If companies fail to keep up and adapt to the changing evolution, they will simply fall off the wayside. Bold initiatives have to be adopted and quickly for digital transformation. There’s no time to waste!
As the COVID-19 crisis forces your customers, employees and supply chains into digital channels and new ways of working, now is the time to ask yourself, “What are the bold digital actions we’ve hesitated to pursue in the past, even as we’ve known they would eventually be required?” Take note to move forward with digital channels to propel your enterprise in the right direction.
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- The COVID-19 recovery will be digital: A plan for the first 90 days
- Digital strategy in a time of crisis
- The digital-led recovery from COVID-19: Five questions for CEOs