Back to this blog after a decade and how?
COVID19 causing virus SARS-CoV-2 is neither the first coronavirus nor the last such to affect the human species adversely[i]. However, this grander SARS coronavirus has brought a pandemic of a scale never seen before in the modern world.
Pandemics and epidemics, of course, have social, cultural, and economic impacts. Businesses may shift from epicenters to other geographies[ii]. There might be reduced social trust amongst the survivors and their descendants[iii]. In some cases, wages improved because of the shortage of labor[iv]. Let us now try to look at the issues business may face and strategies to mitigate those during the current pandemic.
Since COVID19 spreads by human contact, most governments have turned to quarantine as a solution. The practice of social distancing for safety warranted most employers to let their employees work from home if possible. People are avoiding going to any place where they might contract the disease except for necessities. Thus, demand in various industries has gone down.
One person’s constraint is another’s opportunity. The firms which are ahead in terms of digital maturity would gain from this social distancing context compared to those which are less mature. The old definitions of digital maturity have also changed, given the context. The importance of touchless interfaces for hardware, for example, would possibly be a new priority that firms might not have given due weightage earlier. With recession being imminent, all firms would have to cut down costs and save for weathering it out. Thus, firms would have to make the tough choice of investing in digital transformation and better adaptation to make themselves more lucrative for customers and employees. Now, firms typically have Business Continuity Plans and even Enterprise Risk Management plans. But the new scenario we are facing today is not mitigated by only those. Today more than ever, firms need a digital strategy to prioritize and be prudent about their spending on such transformation. Let us see two such scenarios.
An electronics retail firm ABC, with an omnichannel distribution network, was upgrading the recommender system on its website before the onset of the virus. With cash crunch because of retail outlets seeing gradually lesser footfall and eventually being closed due to lockdown, ABC decides to save cash by pausing non-essential projects. Thus, the recommender system upgrade was stopped.
An insurance firm XYZ has been working on making the customer onboarding process digital with AI. With the coronavirus fear, their business is growing. However, both the customers and customer-facing employers are afraid of the face to face interactions. Thus, the digital onboarding process would be a massive advantage to the firm in such a scenario. Hence, the firm continued the digital transformation more carefully.
Without such an overwhelming situation as that of these communicable diseases due to coronaviruses, prioritizing the various aspects of digital transformation is already difficult. For different firms based on their industry, size, level of digital maturity, such prioritization can be worked out. Firms need to start with a two-part assessment to sketch out their approach. First would be an analysis of external factors. The most important activity would be to understand the impact of steps taken by the governments and regulatory bodies to counter the spread of COVID19. We need to look at how the coronavirus context has affected our suppliers and buyers. How are they responding and modifying their behavior? We need to check how the competitors are responding to all this. Digital disruption can have a bigger impact currently in the time of coronavirus. Cultural sensitivity, an ear to local stakeholders, and complementors’ strategies as well would be good. With all this, your firm would have the idea of what needs to be done.
Second would be an analysis of internal factors. To understand where the firm exists already in its path of digital maturity. If a digital strategy exists already, whether and how it needs to be tweaked is to be considered. Study the structure, staff, and their skill levels to understand what kind of changes are required. Check the systems in place to take stock of the resources and capabilities, and recognize the processes that would change. Based on shared values of the organization and management style, formulate a plan on how to transform.
With a combination of the two analyses, we could chart out a colored bubble map for parts of the digital journey with urgency vs. readiness of the firm to implement them as axes, ease of realization of value as color-coding, and budget required as the size of the bubble. It should help prioritize the steps to take.
This should help you with your digital transformation journey in these troubled times. Let me know if you think of any additional points to be considered. I’d be happy to elaborate on any part as needed.
Shailen Kumar Dalbehera is a Senior Advisory Consultant with IBM India. He has a PhD in Strategy from Indian Institute of Management Bangalore.
Opinions in this article are his own and may not reflect that of IBM India
Note: This article was posted first on my LinkedIn blog.
COVID19 causing virus SARS-CoV-2 is neither the first coronavirus nor the last such to affect the human species adversely[i]. However, this grander SARS coronavirus has brought a pandemic of a scale never seen before in the modern world.
Pandemics and epidemics, of course, have social, cultural, and economic impacts. Businesses may shift from epicenters to other geographies[ii]. There might be reduced social trust amongst the survivors and their descendants[iii]. In some cases, wages improved because of the shortage of labor[iv]. Let us now try to look at the issues business may face and strategies to mitigate those during the current pandemic.
Since COVID19 spreads by human contact, most governments have turned to quarantine as a solution. The practice of social distancing for safety warranted most employers to let their employees work from home if possible. People are avoiding going to any place where they might contract the disease except for necessities. Thus, demand in various industries has gone down.
An electronics retail firm ABC, with an omnichannel distribution network, was upgrading the recommender system on its website before the onset of the virus. With cash crunch because of retail outlets seeing gradually lesser footfall and eventually being closed due to lockdown, ABC decides to save cash by pausing non-essential projects. Thus, the recommender system upgrade was stopped.
An insurance firm XYZ has been working on making the customer onboarding process digital with AI. With the coronavirus fear, their business is growing. However, both the customers and customer-facing employers are afraid of the face to face interactions. Thus, the digital onboarding process would be a massive advantage to the firm in such a scenario. Hence, the firm continued the digital transformation more carefully.
Second would be an analysis of internal factors. To understand where the firm exists already in its path of digital maturity. If a digital strategy exists already, whether and how it needs to be tweaked is to be considered. Study the structure, staff, and their skill levels to understand what kind of changes are required. Check the systems in place to take stock of the resources and capabilities, and recognize the processes that would change. Based on shared values of the organization and management style, formulate a plan on how to transform.
With a combination of the two analyses, we could chart out a colored bubble map for parts of the digital journey with urgency vs. readiness of the firm to implement them as axes, ease of realization of value as color-coding, and budget required as the size of the bubble. It should help prioritize the steps to take.
This should help you with your digital transformation journey in these troubled times. Let me know if you think of any additional points to be considered. I’d be happy to elaborate on any part as needed.
Shailen Kumar Dalbehera is a Senior Advisory Consultant with IBM India. He has a PhD in Strategy from Indian Institute of Management Bangalore.
Opinions in this article are his own and may not reflect that of IBM India
Note: This article was posted first on my LinkedIn blog.
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