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Did lockdown kick-start digital transformation by stealth?

(Image credit: Image Credit: Chombosan / Shutterstock)

Digital transformation is a major topic of conversation across businesses in every sector, driving huge levels of investment in the race to replace traditional ways of working with more effective tech-based alternatives. For many, it represents an existential tipping point for the future of business, effectively summed up by Amazon’s Jeff Bezos who said: “There is no alternative to digital transformation. Visionary companies will carve out new strategic options for themselves - those that don’t adapt, will fail.”

However, it’s clearly not yet a priority for everyone. Recent research carried out by IJYI to assess the impact of lockdown revealed that 47 percent of businesses are not currently thinking about or have established a digital transformation strategy. Just under a third (32 percent) say they are focusing on digital transformation, either in the planning or implementation stages. A fifth (21 percent) didn’t know its status within their organization.

The organizational and technology issues created by Covid-19, however, suggest that more businesses should be closely examining their strategic use of technology. Identifying processes and functions where it can bring efficiency and resilience is vital - recent experience has demonstrated that point beyond any doubt. This serves as a note of caution that organizations should be taking a holistic perspective on digital transformation, and avoid just using technology as an emergency remedy to an emerging crisis.

An unlikely catalyst for tech-led change

What’s also clear is that other trends are at play. There’s growing evidence to suggest, for example, that lockdown and the need to deliver home working technologies has given digital transformation a stealthy kickstart in many businesses. Looking at some of the major tech brands illustrates the point: in late April 2020, Microsoft CEO Satya Nadella delivered a quarterly earnings report to Wall Street - the first where Covid-19 would play an important role. In it he shared one of the major effects of lockdown on technology strategy when he said, “we’ve seen two years’ worth of digital transformation in two months.”

That’s an unprecedented acceleration in momentum. In April alone, for example, Microsoft reported more than 200 million Microsoft Teams meeting participants in a single day, generating more than 4.1 billion meeting minutes. Looking elsewhere underlines the point: back in December last year, Zoom, the standout videoconferencing success story of 2020, was hosting 10 million meeting participants a day. That sounds impressive until you see that by April, they were running at 300 million.

We can see this further reflected in IJYI’s research data. A massive 98 percent of respondents said that their technology had enabled them to work effectively during the pandemic. As a result, the vast majority of businesses plan to retain home working, with only 4 percent stating it will cease completely in a post-lockdown setting. And despite widespread speculation that remote working would negatively impact productivity, 94 percent said it had either improved (42 percent) or was unchanged (52 percent). Only 6 percent said it had got worse.

What’s more, half of organizations taking part in the research said their technology strategy is now in a better position than it was before the onset of the pandemic. No respondents said that it had become worse, with 44 percent stating that it was ‘unchanged’. This suggests that businesses are working through a potentially seismic shift in the speed of their digital transformation. They are doing so whether it was already in their business and IT strategy or not, and irrespective of whether they formally define it as ‘digital transformation’.

Capturing the benefits

In addition, 92 percent of employees were given access to all the data, information and systems required for effective home working”. Only 8 percent of respondents said they didn’t have access to the data, information and systems they needed. The vast majority - a total of 92 percent - were provided with those key components necessary to carry out their role.

This underlines a broadly consistent pattern of organizational effectiveness, enabled by pragmatic investment in reliable services. Indeed, despite the various challenges, 92 percent of respondents give their employer either a four- or five-star rating for their effective implementation of home working technology. Given the problems presented by such an unexpected and rapidly unfolding situation, and the fact that no-one had any comparable experience to draw on, that’s a remarkable achievement.

Taken collectively, the data suggests that any business leaders who may have been opposed to the practicalities of remote working - and wider digital transformation - should rethink their position in the light of broadly positive experiences. In many places, structural changes in working policy are already happening, and companies worldwide have gone on the record to announce permanent changes in office culture, with remote/home working assuming a central role. In July, for example, Fujitsu revealed plans to offer “unprecedented flexibility” to its 80,000 workers in Japan. Flexible hours are being offered to all staff and working from home is to become standard practice wherever possible. And they are far from alone, with well-known brands such as Twitter, Salesforce, Amazon, Google and Facebook just a few of the businesses now offering more remote working options - temporary and permanent - than ever before.

In addition, businesses now have further broad evidence that outsourced technology infrastructure and services are able to adapt to emerging challenges head on. Service providers were able to meet the needs of existing and new customers in a time of crisis, and the ability of cloud-based technologies to scale was demonstrated time and again. The flexible, opex-based pricing models offered by so many SaaS providers offered thousands of businesses exactly what they needed at such short notice: the ability to add new IT infrastructure and applications as required and without the need for sudden, unplanned and significant capital expenditure.

The accelerated adoption of new tech has shown that digital transformation can be achieved at scale and at pace. The apparent lack of awareness and implementation of digital transformation strategies raises concerns that organizations are not fully recognizing its potential, and as a result, are storing up potential problems for the future. Business leaders should take the vital experience gained during this period of adversity and re-examine the way they focus on technology as a route to success. Ultimately, why wouldn't every organization want to capture the benefits of digital transformation in its wider business strategy?

Chris Pont, CEO, IJYI