The coronavirus outbreak has been a hard-hitting game-changer for businesses across the world. With new concepts like social distancing and lockdowns gaining priority, the primary challenge was to save the plummeting global economy from hitting rock bottom. As organizations grappled to come to terms with the new normal, the one thing that helped them build resilience during this crisis was the readiness to adopt digital technologies.
As the pandemic broke out, organizations were forced to divert from conventions and make radical changes in their business models overnight. To stay in the game in this new economic backdrop, companies quickly realized the strategic significance of digitization and came up with new digital policies and practices. In fact, in a matter of few months, companies across all sectors underwent several years of transformation in an incredibly short time. A McKinsey survey involving top corporate executives indicates that digital transformation sped up by nearly four years.
Organizations that managed to speed up their digital transformation survived, while the rest perished.
Expedited Digital Transformation for Enhanced Customer Interactions
As people tried to adjust to the new normal, there occurred a steep rise in online consumer interactions by almost eighty percent. There was a visible convergence of online and offline across all sectors. For instance, retail giant Target reported a 141% increase in sales from online channels during Q1 of 2020. Clearly, the digital transformation of businesses was inevitable to tackle the massive surge in consumer demands online. In the coming days, this trend is going to gain permanence; the digital channel will be counted as mandatory and will call for strategic digital investments.
The acceleration towards adopting a digital business model is indeed surprising. But experts at McKinsey say that the rapid pace at which companies started developing digital products and digitally-enhanced services, is more surprising. This is because companies needed digital offerings as immediate solutions to adapt to the ever-evolving requirements of online customers, courtesy COVID-19. Many organizations also enriched their portfolios with several kinds of digital offerings to help customers with easier interactions and boost engagement.
Also Read: What Exactly is Digital Transformation?
Quantum Leap to Digitize Internal Operations
Apart from customer-facing aspects, the acceleration in digital transformation was also observed in internal business functions starting from R&D, and back-office works to production departments. Companies started adopting digitally-enabled platforms much more readily than they would have in a pre-pandemic environment. The degree of digital adoption surged by almost seven years in this short period.
Under normal circumstances, when there was no pandemic, it would take a minimum of one year to come up with a feasible solution for the smooth functioning of remote teams. But while switching over to full-fledged remote working during the pandemic, surveys reveal that businesses leveraged digital platforms and moved at least 40 times faster. Microsoft CEO Satya Nadella says that almost two years’ worth of digital transformation happened in two months.
Companies have also successfully employed agile approaches and design thinking to spot newer digital opportunities that strengthen their business from its very core and prepare for large-scale digital transformation in the future. Starting from food delivery chains, to network service providers, businesses have already made specific investments to develop or extend their digital capabilities. Executives from 63% of the worlds’ top organizations said that they have increased their digital transformation budget due to COVID-19, as per a 2020 survey conducted by Forrester Consulting.
The standard of digital excellence has already skyrocketed during the pandemic, as businesses realize that no organization is immune to changes. But this exponential acceleration of digital transformation will help companies adapt to tail events better and become future-proof.