Technology As the Way Forward: The New Normal COVID-19 pandemic and the resultant disruptions have irrevocably altered the technology and digital adoption for consumers, corporates and governments alike.

By P.N. Sudarshan

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Digital and technology adoption in India has been increasing at a steady rate over the last few years, and the current COVID-19 pandemic has, rather unexpectedly, catalyzed the rate of adoption. It has made it imperative for the government, corporates, as well as consumers to rely on digital channels for accessing goods, services, information, and entertainment. Fortunately, the investments and capacity building we have undertaken over the years through initiatives such as Digital India and Smart Cities have come handy, for the government to effectively respond to the dynamic situation and to deliver relief measures.

Technology and digital has been an integrated part of our crisis response, and are used efficiently by the central as well as various state governments to monitor, track and to contain the spread of the virus, map hotspots, to keep people informed, and also to deliver welfare measures and citizen services, utilizing the Jan Dhan-Aadhaar-mobile (JAM) trinity.

In specific terms, Aarogya Setu App has been employed in contact tracking and reporting, using the bluetooth and location data of the end users phone, details of which are then mapped and cross referenced with the database of known cases of infection. High-tech command and control centers and COVID-19 dashboards are integral part of various state governments in monitoring the cases and hotspot locations on a real time basis, and various state police departments are also using technologies such as drones for monitoring people movements and enforcing discipline in containment zones.

For the corporate sector, the change has been swift and dramatic. In a very short period of time companies had to adapt to remote work arrangements and the ones that were better prepared were able to manage the operations in a seamless manner and minimize disruptions. Though corporate sector has been proactive and mature in technology adoption and usage, COVID-19 has catalyzed the technology usage and digital adoption to a new level, and now technology is fully integrated into the day to day functioning of enterprises, from managing remote work and employee engagement to managing customer experience, operations, as well as supply chain networks and partner ecosystems. Digital platforms that support live-video communication have seen a massive surge in adoption and this trend could very well permanently alter the pattern of business travel in the years to come. As digital tools have been integral to crisis response, the relevance of technology in managing and optimizing business operations is likely to only increase in the near future.

The current situation has also forced our hand on business continuity planning and investments in disaster recovery systems. Technologies such as virtual private networks, end point security, data security, etc. have become more relevant in the current context where the entire workforce is outside the perimeter of secure corporate firewalls. A range of technologies from broadband connectivity and cloud-based infrastructure to virtual private networks and teleconferencing solutions are enabling enterprises to manage work virtually. From CIO's perspective, there is increasing focus towards creating resilient, flexible and secure networks, disaster recovery systems, cyber security systems, etc., and also in ensuring the availability of mobility devices to enable remote working for employees. With major corporations around the world, especially in technology industry announcing their intent to embrace flexible/remote work from a medium to long-term perspective, digitally enabled future of work tools will likely become an integral part of core business operations.

In the medium to long term, we could witness an increasing adoption of emerging technologies such as data sciences, artificial intelligence, internet of things, etc., as business look to operational transformation in the changing global environment

From consumer perspective, the current situation brought about a behavioral shift in the usage of digital channels for high velocity everyday purchases such as groceries and medicines. Though beset with supply constraints due to lockdowns, e-commerce companies have been able to recover from the operational challenges, and have been integral part of the crisis response in many cities, especially in containment zones. Also, given the nature of their operations, it becomes imperative for e-commerce companies and hyperlocal delivery service providers to impart adequate precautions and safety measures in their operational processes, to ensure highest levels of safety for their large workforce and customers. This combination of behavior shift and safety requirements from consumers is likely to catalyze the growth of omnichannel retail, with the traditional brick and mortar retailers adopting home delivery options to survive and thrive in the changing market landscape. Other consumer segments such as education, healthcare, and entertainment have also witnessed a massive shift towards digital in this current external environment, and are likely to witness elevated adoption in the next two-three years as the market adjusts to this new equilibrium.

For companies, especially startups in consumer Internet and digital services segments, the current crisis is truly an inflexion point in their journey. Startups in domains such as online education, digital health, cybersecurity, cloud transformation, digital media, online gaming, etc., are likely to witness support from a positive demand environment in the near term. Startups in segments associated with discretionary spending are likely to face headwinds, as consumer behavior tend to shift from convenience/comfort to value in a decelerating economy facing slowdown in aggregate demand. The current disruption has also resulted in severe stress for business models with high cash burn and unfavorable unit economics. With the investor sentiments likely to remain subdued in the near term, it becomes imperative for startups to minimize cash burn, reduce operational overheads and also pivot to new segments and business models with favorable growth and unit economics in the near term. It should be noted that the current environment of extreme dynamism is naturally suited for agile and nimble footed startups to survive and thrive, and startups that are quick to adapt to the changing dynamics and seize the immediate opportunities are likely to survive through this phase and be better placed to grow faster during recovery.

COVID-19 pandemic and the resultant disruptions have irrevocably altered the technology and digital adoption for consumers, corporates and governments alike, and technology is also likely to play an important role in recovery as well. It's important for the industry participants to understand the strategic importance of the technology and bring a strong digital orientation in designing their products, services and experiences to survive and thrive in the changing market dynamics.

(M. Manikanda Prabhu, who is associate director at Deloitte India, contributed to the article.)

P.N. Sudarshan

Partner, Deloitte India

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