CEOs are focused on the immediate impact the pandemic has had on supply chains, revenue and profitability and looking at how they can review their operating models to do business for touchless economy. These are defined by the activities that are possible without close physical interaction between people. COVID-19 has in many ways forced businesses and consumers to adopt both digital and contactless payment processes.
Preparing for the new normal
With some 49% of global businesses reporting profit margins that were either the same or lower than two years ago before COVID-19 swept across the globe, organizations are under a huge amount of pressure to survive, let alone thrive, according to a recent EY survey.
In addition, the increasing shutdown of facilities across the world has exposed vulnerabilities in many organizations’ supply chains. Over half of organizations told EY they are now looking to change the way they are set up, with 41% investing in accelerating automation.
“There is no playbook for this situation, and the C-suite is reconfiguring and readjusting its response in real time as events evolve rapidly. For most companies, the full impact on revenue across value chains is still highly uncertain,” explains Steve Krouskos, EY Global Vice Chair Transaction Advisory Services.
According to EY’s survey, 72% of organizations already had major transformation initiatives underway, driven by pressure on revenue targets. Organizations will now need to turbo charge this digital transformation, using the valuable lessons they have learned regarding unprecedented challenges in productivity spikes and mobilizing entire workforces to work from home.
Organizations that have been well ahead on the digital transformation curve have perhaps found it easier to adapt to the challenges COVID-19 has thrown at them. Over the coming weeks and months, organizations will be taking a hard look at the sustainability, scalability, security and robustness of their digitization strategies in light of what they have learned during the global health crisis.
Supply chains will also be re-assessed. During the pandemic, organizations started looking at new ways of operating that they hadn’t considered before. Some food manufacturers, for example, who previously sold through a distributor, have found it easier to sell direct to customers. This could result in hybrid models of direct and indirect selling appearing, according to Gartner. The analyst firm says chief supply chain officers (CSCOs) will need to look closely to see if these new ways of working should be continued and where opportunities to create strategic value have emerged and can be exploited in the future. Some of the agile processes created in supply chains during the pandemic will stay permanent.
A drive towards automaton and industry 4.0
In times of economic crisis and recession, organizations often increase their investment in automation, according to Forrester Research. Post-pandemic will be no different. As we emerge into the new normal, organizations will look to automation to mitigate risk that future global crises may bring.
According to a recent report by Forrester, automation has been a major force reshaping work since long before the pandemic. Now it is taking on a new urgency in the context of business risk and resiliency.
Prior to the pandemic, the Fourth Industrial Revolution or Industry 4.0 was garnering much interest. New digital systems emerging include industrial IoT devices, advanced robotics, big data analytics together with AI/cognitive solutions and augmented reality. These solutions could completely transform manufacturing by creating a totally autonomous, highly connected and intelligent ecosystem. In the longer term, they will make businesses more resilient, efficient and productive.
Taking digital transformation up several gears
One of the big lessons that organizations have learned from the pandemic is how important it is to be ahead on the digital transformation curve. This, however, isn’t as easy as it sounds. To be on an effective digitization path, organizations must have a solid strategy built on sustainability, robustness and security in order to better control the business and its costs.
No digital transformation strategy fits all, which is why it is essential to choose an experienced partner that understands both the business and the technologies. “When people think about digital transformation, they tend to emphasize technologies such as AI, chatbots or automation as these are the most visible attributes. But technology issues are usually the easier things to work through. The non-technological aspects, if not addressed, can mask the depth of organizational transformation required and become serious inhibitors,” advises Neil Osmond, Distinguished VP Analyst at Gartner.
Lead from the front
CIOs must lead from the front to make their businesses more resilient in the new normal. Gartner cites “lack of a clear digital vision, an overemphasis on technology and a passive resistance to change” as the big hurdles organizations need to overcome.
As we ease into a new way of doing business, CIOs need to run an audit of their current digital status and center transformation on business priorities. Ultimately, businesses need to transform to become more agile and powerful enough to adapt to any new crises that may flare up in the future.
Learn more about how Orange Business Services can guide you through the new normal with Business Consulting Services.
Jan has been writing about technology for over 22 years for magazines and web sites, including ComputerActive, IQ magazine and Signum. She has been a business correspondent on ComputerWorld in Sydney and covered the channel for Ziff-Davis in New York.