A Digital Armour For Business Digital transformation is a must for business survivability through a COVID-19 pandemic
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With the COVID-19 epidemic in full swing, major upheaval of the global economy is being witnessed. It seems that no industry or sector was untouched by it as organizations hit the pause button on their marketing plans and quickly recalibrated their messaging, operations and daily customer and employee interactions. Efforts to keep everyone safe and healthy became the operational watchword for survival in these times.
Interestingly, there are firms which have managed to adapt to these new normal faster than the others. With just a few tweaks to their business model, they not only remained unaffected but also managed to grow during this crisis. A digital-first business model has helped firms overcome the disruption of the pandemic and instead allowed them with an opportunity to grow.
Online education technology platform Byju's is an example of this. With a universal lockdown in India that restricted students' access to schools, colleges, and universities, the ed-tech unicorn opened their platform to students for free. Its users shot up by 150 per cent or 6 million within a short span of a few weeks after doing so. The company is now in a unique position to leverage its content across a larger user base to nurture this captive audience for future success.
For most organizations resorting to working from home for employees, it has become essential for them to look at securing their remote workforce and make a move towards digital transformation. Citrix, a US-based software company that assists organisations aid work from home for employees, has reimagined its product line comprising software as a service (SaaS), cloud, VPN services and security management. David Henshall, the CEO, in his March blog, pledged to extend business continuity offers to ensure customer safety and success. The company, which supports even frontline sectors such as healthcare, government agencies and food supply chain, has seen a remarkable change in its fortune with the crisis. Since mid-March, the company's stock has seen a remarkable growth of over 35 per cent and is trading at an all-time high.
Digital-first companies have taken the lead to trigger transformation and growth in their own sectors. Companies such as Google, Facebook and some other IT firms have allowed a $1,000 compensation to employees to set up workspaces at their home. The result will bring about a near seamless transformation in operations for these firms and even better productivity for some.
Even in non-technology firms, CIOs and CTOs are busy drawing up strategies for future digital transformation. They face the challenge of how to handle the opportunities and risks of digital transformation. In his book, The Digital Transformation Playbook, David L. Rogers, faculty director of the digital business strategy at Columbia Business School says: "Digital technologies are transforming not only the business aspects related to technology management but virtually all aspects of the company."
The IT function, which was so far a support function to the core business, is fast becoming the core business model itself. For policymakers, too, the strategy of "digital first' and speeding up digital transformation is gaining prominence. On June 15, India initiated the global partnership for artificial intelligence (GPAI). "This multi-stakeholder international partnership will promote responsible and human-centric development and use of AI," IT minister Ravi Shankar Prasad said in a tweet.
Other than securing some much-needed help for developing human-centric AI technology within the country, we should also look at developing strategies for the digital transformation of organisations. It is noteworthy that traditional firms, who commanded premium positions, have now taken the backseat as tech firms or tech-enabled business models gains prominence.
In India, the small and medium industries sector is the harbinger of over 60 per cent employment and 37.5 per cent GDP of the country. There has been telling impact on MSME industries and jobs generated by them, as a direct result of the lockdown and social distancing norms. Many manufacturers are now considering options of remote production and automation of their human-centric processes to ensure the survivability of their business.
With the adoption of cloud technology, AI can step in to detect defects in manufacturing or quality shifts without even setting foot on the factory floor. According to global manufacturing automation experts like Anna Katrina-Shedletsky, the manufacturing sector would experience five years of innovation in the next 18 months due to COVID-19. Her statement stems from the fact that with cloud data adoption, more and more manufacturers are having some level of oversight and normalcy, even when engineers cannot travel. In the long term, it is expected that cloud technology will lead to better optimisation of products and processes for manufacturers.
As digital transformation involves transformations of crucial business operations, affects products and processes, as well as organizational structures and management concepts, organizational leadership will need to start by developing a digital transformation strategy. Companies need to establish management practices to govern these complex transformations. An important approach is to formulate a digital transformation strategy that serves as a central concept to integrate the entire coordination, prioritisation, and implementation of digital transformations within a firm.
The exploitation and integration of digital technologies often affects large parts of companies and even go beyond their "processes', by impacting products, sales channels, supply chains and more. Potential benefits of digitization are manifold and include increases in sales or productivity, innovations in value creation, as well as novel forms of interaction with customers, among others. "As a result, entire business models can be reshaped or replaced," say Downes and Nunes in their book, Big Bang Disruption.
Experts like Christian Matt, Thomas Hess and Alexander Benlia advocate four essential dimensions to achieve digital transformation. This includes the use of technologies (attitude towards new technology), changes in value creation (need for different forms of monetisation for digital products/services), structural changes (to provide an adequate basis for new operations), and financial aspects (as both driver and binding force behind the transformation).
Due to its wide scope and the far-reaching consequences, digital transformation strategies should be carefully thought out and aligned with other functional and operational strategies.