Digital transformation priority jumps on the back of Covid-19
Since start of Covid-19, digital transformation as a priority has jumped by over 20%, according to executives in the US and around the world. A new HCL report checks up on digital journeys a year into the pandemic.
Amid global infection risks and restrictions on movement, digital has become the backbone of business, society, and the economy. Commercial operations have moved online, as has most consumer activity. Against this backdrop, a spike in the importance of digital is scarcely a surprise.
HCL surveyed more than 400 business leaders and tech decision makers at global organisations with $2 billion plus in annual revenues. More than 100 respondents were from the US – making it the most represented country in the survey. Other key markets are spread across Europe and the Asia Pacific.
In all regions, digital transformation is now a high priority at the board level for nearly 60% of respondents – with the US leading the global pack. At the start of 2020, this figure was in and around 40% worldwide. According to head of digital & analytics at HCL Anand Birje, Covid-19 was the wake up call here.
“It’s no secret that the pandemic has unveiled some unique weak spots across industry ecosystems,” he said. Birje’s perspective is backed up by the sector-specific attitude towards transformation. Around 10 industries surveyed all saw a spike in importance given to digitalization, with some making a bigger jump than others.
The highlight is life sciences & healthcare – where the overwhelming challenge posed by the pandemic shone light on infrastructure gaps. Since the start of 2020, the number of healthcare leaders putting digital transformation front and center has more than doubled as a result.
Other heavily impacted sectors such as manufacturing, oil & gas, and utilities have all seen a near double-down on the digital agenda, while banking, retail, logistics & transport, media, professional services, and IT services have all seen significant increases.
Benefits of digital
While the broad aim across the economy is to mitigate the pandemic impact, HCL asked leaders about the specific advantages they reap from a wider digital agenda. Top of the list is operational efficiency – an absolute essential in the wake of cash constraints and supply disruptions.
Interestingly, the second biggest benefit of digital is cited as better customer experience. Core pillars of the post-pandemic world are expected to be a highly discerning and demanding consumer, choosing from a highly competitive set of propositions. Per the report, the response should be to gear the entire business value chain towards customer-centricity – a priority for more than 60% of businesses.
Efficiency and customer experience aside, perks of digital transformation include the innovative capacity to launch new offerings, better employee productivity, deeper market insights, wider growth opportunities, and a platform to reinvent business models.
Between 30% and 60% of businesses recognize these advantages, and most have put digital atop their agenda as mentioned. The question remains: how many have actually taken effective action to this end?
So far, around half the organisations are poised for a transformation drive. These digital leaders have a written strategy in place – backed with a detailed roadmap for implementation. Most of the rest have devised a strategy, but lack the concrete guidelines to see it through. Roughly 10% are lagging far behind, with no strategy or roadmap.
The researchers took a deep dive into strategies that are in place, to see where businesses are putting their weight. For many, digital investments in the near future reflect a direct response to the pandemic. The two biggest business challenges emerging from the pandemic are moving operations online for continuity and managing the growing threat profile from an unusually stretched IT infrastructure.
A direct upshot: well over half of all businesses are planning heavy investments in cyber security and cloud computing. For the rest, Industry 4.0 tools such as data analytics, automation, internet of things, and data virtualization have all become interesting in the wake of the crisis.
Key to success
So the digital agenda is advancing, nuanced with specific priorities and survival strategies. That said, a core learning from transformation efforts in recent years is that investment doesn’t necessarily mean success – particularly in the digital sphere.
Per HCL’s survey, businesses have noted this distinction. Asked about the key to future transformation success, few leaders actually cited specific digital tools or levels of investment. Instead, the focus was on enabling factors, such as culture, mindset, and practices.
Most think the key lies in speed, flexibility, and decentralized decision-making. Others value customer-centricity, while a sizeable chunk also stress the role of a clear and focused strategy. Upskilling and talent; a data-driven mindset; strong tech architecture; and participation from leadership and collaborators are all key success factors.
For Birje, pivoting to these values will be key to survival in the future. “As global businesses rapidly transform to adapt to the new normal, it’s clear that we’re entering a new chapter in the adoption of enterprise digital transformation. To emerge as a winner, integrating these signals into your transformation initiatives will be the key to speeding toward the right outcomes.”
More information? Download the 'Digital Acceleration for Business Resilience' report.
