Digital Transformation is Even More Important Thanks to the Pandemic

Stephen DeAngelis

January 04, 2021

Change is always difficult, if unrelentingly necessary. Centuries ago Niccolo Machiavelli, in his classic The Prince, wrote, “There is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things, because the innovator has for enemies all those who have done well under the old conditions, and lukewarm defenders in those who may do well under the new.” Change management confronts even more challenges during difficult times like the conditions created by the COVID-19 pandemic. Nevertheless, Shashin Shah, CEO of Pimcore Global Services, insists there has never been a more important time to undertake digital transformation. He writes, “As businesses face a never foreseen or imagined, straight out of a dystopian pandemic fiction situation, where sustenance is all that matters — digital transformation is providing them the means to weather the storm.”[1]

The digital transformation imperative

According to Shah, “Isolated teams, overdependence on legacy technologies and processes, [and] siloed data must give way to transformation in operations, experiences, and tech ecosystems. The only way to deal with this massive disruption is by adopting cost-efficient digitalization strategies and focusing on delivering uninterrupted value to customers. A digital-first approach focused at achieving nimbleness, developing lean operations, exploiting technology to your best advantage, and freeing up your people for more analytically inclined, complex tasks — remains at the heart of this change.” From his perspective, “Those who embraced [digital transformation] in the past years seem to be winning the war against Covid-19 without fighting, and those who haven’t are fighting without winning.” He is not alone in this assessment, David Ahuja, head of AWS’s Consumer Packaged Goods (CPG) industry strategy, sees the same results in the CPG sector.

Ahuja writes, “One characteristic that stands out among CPGs on a clear path to recovery is agility. These agile businesses had already invested in digital transformation technologies and were able to successfully and quickly respond to process challenges. Meanwhile, digital laggards had to find partners to help manage disruption in their plants and distribution centers because existing CPG tools — that likely weren’t based on modern technologies — became obsolete overnight. Technology is the driving force behind agility to transform processes and overcome challenges with speed. It also gives companies end-to-end visibility into business processes to identify opportunities for optimization and growth. Agility and speed are no longer optional because all brands should function with a start-up mentality to be prepared for constant change.”[2]

Technologies driving digital transformation

Although digital transformation is about more than implementing new technologies, advanced technologies lie at the heart of change. Journalist Alison Job observes, “Digitalization has affected all aspects of our lives, the way we live, the way we work, and essential to your business, the way we consume. It has altered the way customers want to interact with your business.”[3] Jacques Fouché, Head of Strategic Advisory at Ovations Group, told Job, “Organizations should view technology as an opportunity to compete against those businesses that have set themselves up to make the most out of digital.” He explains, “The foundation of a digital enterprise includes the following four elements: 1) A set of standardized business processes across internal functions to ensure a consistent customer experience; 2) the ability to predict and respond to levels of customer demand and meet their requirements on time; 3) [the ability to use] your customer knowledge to drive personalization; and 4) the ability to deliver new products and features quickly — digital enterprises should be able to experiment and react at pace.”

To achieve the objectives laid out by Fouché many companies are turning to technologies like robotic process automation, cognitive computing, and the cloud. Steve Bates (@SteveBatesCIO), a principal at KPMG, asserts, “During the height of the crisis, the drivers of IT were clearly reordered: often, it was simply about helping the business survive.”[4] He adds, “The critical task is to focus ruthlessly on what really matters to business performance and assess how IT can facilitate and enable it. … Those with mature tech capabilities — Digital Leaders — will naturally be in a stronger position, and indeed one of the effects of the crisis will be a widening divide between these leader organizations and the rest. We find that Digital Leaders are more likely than the global average to have made additional technology investments, especially in areas like AI, ML, distributed cloud, and automation, as a result of Covid-19.” Cognitive computing systems are first among equals in the technology arena. Tommy Weir (@tommyweir), CEO and founder of enaible, insists putting in place the right AI strategy is critical to surviving the pandemic.[5] He offers five principles for getting the most from AI. Those principles are:

1. Reimagine Your Future and Use AI to Shape It: “The first and most important step is to refine your purpose and strategy. Get your team together and figure out where you could be in the next few years, especially post-recession.”

2. Unleash AI on the Assets You Already Have: “I guarantee you your organization already has a lot of the data and skills you need to help reshape the business and release its hidden potential — it’s just currently trapped in a plethora of systems that are not talking to each other, managed by people who are not talking to each other. AI can help connect the dots and uncover incredible new insights.”

3. Automate Where You Can and Create Better Human Roles: “Following on from the refining of your strategy and re-envisioning of your future, get your tech people working hard to scour the market for the amazing off-the-peg and licensed solutions already out there. Some judicious research from your tech-savvy people will result in cost-effective and flexible solutions to automate and digitize, where it makes sense to do so. At the same time, don’t neglect the very important (and what should be constant) refining of your human roles.”

4. Tackle Fraud Head-On with AI: “Recessions bring out the fraudsters. Recessions, coupled with AI, bring out the very smart fraudsters. The dark side of AI is that cybercriminals can use it too, and it means that businesses are increasingly grappling with the most sophisticated criminals the world has ever seen. Rely on traditional or outdated systems, and you could find yourself in big trouble. Along with identifying the most appropriate AI tools for your business, it is also important that you seek out the best anti-fraud AI solutions.”

5. Use AI to Boost Remote Worker Productivity: “Gartner, a leading research firm, suggests using AI software to not only improve productivity but lift worker morale and engagement in a post-pandemic world.”

Weir concludes, “If you are not doing all of the above, and your competitors are, then you are leaving yourself in a vulnerable position when it comes to future-proofing your business.”

Concluding thoughts

Boston Consulting Group analysts note, “As the COVID-19 pandemic continues, executives are finding their companies’ digital transformation more urgent than ever. … COVID-19 has put businesses on a new and accelerated digital trajectory. We expect to see digital transformation becoming one of the most significant determinants of competitive advantage as the recovery continues.”[6] As I noted above, digital transformation is about more than implementing new technologies. Tricia Wang (@triciawang), a self-described Tech Ethnographer & Sociologist, explains, “A lot of companies treat digital as if they are ‘doing digital’ — this is ‘digitization’ at its worst — as if it’s some checklist of things to do. It’s very transactional, and people are so busy doing digital they don’t even know WHY they are doing it in the first place! Whereas [some companies] embrace ‘being digital’ — this is ‘digital transformation’ at its best — it’s a total paradigm shift in the culture and operations — it’s not just about buying the latest digital tool, but about creating a new system, new cadence, new mindset.”[7] Transformation is never easy — and a pandemic only makes it more difficult; however, the pandemic also makes digital transformation essential to survival for many organizations.

Footnotes
[1] Shashin Shah, “Why Digital Transformation Remains Your Best Chance to Survive the COVID-19 Onslaught,” Business 2 Community, 31 August 2020.
[2] David Ahuja, “How CPG brands are Navigating the Path to Recovery,” Consumer Goods Technology, 4 November 2020.
[3] Alison Job, “Capabilities for the competitive digital enterprise,” ITWeb, 5 October 2020.
[4] Steve Bates, “Digital business transformation post Covid-19: the next wave,” Information Age, 22 September 2020.
[5] Tommy Weir, “Rebound from Recession with the Power of an AI Strategy,” Dataversity, 25 August 2020.
[6] Saibal Chakraborty, Tauseef Charanya, Romain de Laubier, and Akshaya Mahesh, “The Evolving State of Digital Transformation,” Boston Consulting Group, 25 September 2020.
[7] Trevor Miles, “Let’s be clear: Digitization is not the same as Digital Transformation,” Kinaxis Blog, 8 December 2017.