Covid-19 is pushing companies to rapidly operate in new ways, from permanent work from home policies to retail coffee ranges. Systems resilience has been tested as never before. Countries are successfully flattening the curve, but even if we are able to fight the coronavirus pandemic and maintain continuity, its reverberating effects are likely to change how the world does business for many years to come. Successful recovery from locked-down economies will require us to maintain this increased level of adaptability for a long time yet.
To help accelerate response to the changes, businesses must consider five major areas as we emerge into the new normal.
1. Accelerate moving to the cloud
The effort to maintain operations during Covid-19 puts cloud computing at centre stage, and organisations that have delayed making the move in the past will need to rapidly skill-up in response to challenges to their business model. Digitally agile firms are adapting to the ongoing crisis more successfully, and it is highly likely that we will see a new cloud-first model become the standard. This will allow for scalability, reliability and distribution across zones and regions.
For the larger enterprises, the move to SAP S/4 HANA will take on a heightened focus as they look to accelerate their cloud ERP migrations. This shift to the cloud was always inevitable, but the pandemic has proven to be a live-fire stress test of many initiatives that were still in the process of being rolled out.
2. Reducing physical assets in your value chain
At the very start of the lockdown almost any process that could be rapidly digitised went virtual, such as video conferencing, document signing and electronic trading. This digitisation will continue with a reduction in physical assets, which lack the flexibility and scalability that businesses need in order to survive this pandemic and any future disruption. Resilience will become the new buzzword as we look to reduce reliance on single points of failure.
A digitised value chain strengthens capabilities in anticipating risk, achieving greater visibility and coordination across the supply chain, and managing issues that arise from growing product complexity. IoT technology can also represent a huge change in how businesses organise and digitise their assets, offering from real-time analysis of performance, trends, equipment status and historical data for optimum insights.
3. Re-configure your supply chain
Covid-19 has driven home the need to reduce global supply chain vulnerabilities – the disadvantages of a system that requires all of its elements to work like clockwork have now been exposed. Traditional structures are often optimised for cost and are not always equipped to cope with the unplanned disruptions and demands that lockdowns put on business. Organisations must re-configure their supply chains away from being rigid and linear to operating within agile, networked ecosystems.
For flexible and resilient supply chains, enterprises should focus on building intelligence-based capabilities to help them prepare for, sense and respond to future disruptive events. Simulations of the past, built on subsets of historical data rather than real-time data, were simply not advanced enough to model the impact of such a significant shock to global and complex supply chains.
While no one can foresee exactly what’s in store for tomorrow, we can work today on building a ‘smarter’ global supply chain that use technologies like AI, automation and IoT to better forecast and make decisions on future trends. Using these, businesses will be able to model and build elasticity into their supply chains while understanding the trade-offs between flexibility, cost and resiliency.
4. Move to a hybrid work model
Even when this lockdown eases, controls may be lifted for short periods of time and reinstated intermittently to ensure that the healthcare system can cope with demand, making the remote working footprint part of ‘business as usual’.
To prepare for future lockdowns, organisations must understand what response has worked with the current lockdown and retain it, as well as evaluating areas of weakness and improving or replacing them. Leaders can achieve this balance by capturing and aggregating performance data from across all jobs, teams and functions within their organisation. Which tasks are being performed better than before Covid-19? Which areas are falling behind? This data should also include employee feedback and experiences, which are critical to building a complete picture of the current business state.
Rather than looking at office vs. remote working, leaders will seek to find the best of both worlds, creating more flexible hybrid models of co-located and distributed work. These new work practices will prove their worth in multiple ways, from increased resilience to better utilisation of real estate, and, in the future, businesses will mark their success with greater checks on overheads and lower capital outlays.
5. Prepare for a post-Covid workplace
We don’t know what the future workplace will look like, but it is possible to consider the lessons of the past to think constructively about the future of the post-Covid world. Smart and emerging technology will penetrate our workforce, with AR and VR offering huge applications in delivering immersive learning content. I expect the traditional business structure, built on layers of management and hierarchy, will flatten, as trust and empowerment become more important than command and control. We may see an accelerated movement towards the gig economy as organisations question the need to hire full-time employees. Finally, the pandemic could give business leaders a broader mandate for sustainability. If ever there was a time for companies to demonstrate their commitment to the prosperity of their employees by addressing inequality in the business model, it is now.
Decisions made during this crisis may lead to a burst of innovation and productivity, and more resilient industries rising to the top of their markets. But the myriad challenges caused by the pandemic shows that companies will have to quickly adapt and flex their traditional business models to prosper.
Andrew Duncan, Partner and UK Head, Infosys Consulting