Why Digital Transformation is Crucial During a Crisis
Now, more than ever, digital transformation is key to overcoming the challenges faced by enterprises around the world. While economic upheavals in the past may have put digitization on the back burner, experts make a case for why digital transformation should come first during a crisis.
Adapt or perish—it’s the law of nature. In a world besieged by the COVID-19 pandemic, it’s become the law of business. This global health crisis has accelerated digital transformation across industries, propelled by changes in consumer behavior.
From remote work and distance learning to e-commerce and telehealth, social distancing has pushed our world into the virtual space. We are turning to digital tools and technologies for everything we need and enjoy.
(Also read: Six Trends Emerging from COVID-19)
Investing in digital transformation during economic uncertainty may seem counterintuitive, but research shows it gives companies that do so the competitive advantage. A study by the Harvard Business Review after the 2008 Recession revealed that the 9% of organizations that reacted to the recession by changing how work was done “outperformed their competitors by at least 10% in sales and profit growth during the three years following the recession”.
The numbers support that same business move today. New research by Accenture has revealed that Chinese companies that successfully digitized their businesses remained competitive and resilient against the impact of COVID-19—recovering from the crisis more quickly and achieving better financial performance.
Dubbed “Digital Champions”, 63% of Champions returned to pre-crisis productivity levels within three months, compared with 47% of other companies. In addition, 74% of the Champions anticipated positive revenue growth in 2020, compared with 49% of other companies.
BDO, an international network of public accounting, tax, and advisory firms, enumerates the five advantages that digital solutions give organizations:
- Efficiency advantage: Digital technologies streamline operations and automate manual processes, resulting in less waste, greater speed, and more focus on revenue-generating tasks.
- Productivity advantage: With their employees already equipped for remote work, they can focus on leveraging collaboration tools and technology to maximize productivity and sustain company culture.
- Security advantage: They are better prepared for any cyber threats that could disrupt business operations or impinge on the privacy of their customers.
- Customer advantage: They mine customer data to monitor for shifts in demand and uncover emerging customer needs.
- Agility advantage: They leverage data-driven insight to make decisions faster and act on them faster. They have built-in cultural flexibility to adapt or change course at any point.
Digital solutions for your business
“All roads lead back to the IT operating model,” Steve Bates, global leader of KPMG’s CIO center of excellence, shares with CIO.com. “There is going to be pent-up demand and when this period ends there is going to be a tidal wave of spending and you want to be in position to take advantage of it.”
In the article quoted above, CIOs and IT experts share how digital solutions enable organizations to become more resilient in the face of adversity—allowing them to rebound more quickly than their competitors and pivot their strategy from defense to offense.
- Process automation. Machine learning (ML), robotic process automation, and a hybrid of both (intelligent automation or IA) will make companies more efficient. Work can be done faster and with fewer mistakes, freeing up human capital resources for more high-value tasks. More advanced machine learning tools can optimize processes to reduce to save on time and resources.
- Data analytics. Real-time data on customer behavior and business health will enable companies to adjust more quickly to consumer demands and take advantage of emerging trends. Equinix CIO Milind Wagle has seen a spike in data analytics requests from business leaders. “Data and analytics more important than ever,” Wagle says. “You’re making decisions daily with changing information and reacting to factors outside your control.”
- Cloud and XaaS. Cloud services and everything-as-a-service (XaaS) reduce costs and provide scalable IT infrastructure and services. With working-from-home (WFH) still in play, a variety of services and applications accessed on-demand over the Internet instead of on-premise ensures better customer service and employee productivity.
- Self-service. According to Wagle, self-service channels and platforms will help employees, customers, and partners access what they need with less supervision from IT. This could include improving contact center services so that customers can more easily find support.
Given the massive changes this global crisis has brought to how we live and work, they may be no going back to what we view as normal; this global shift to the digital realm may well outlast the pandemic. Companies that respond to these behavioral changes and keep their finger on the pulse of emerging trends through digital solutions will be better equipped to outflank uncertainties and challenges now—and in the future.
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