Adversity gives way to innovation. That belief certainly has been tested in 2020, and a recent IBM study proves its validity when it comes to corporate digital transformation. Big Blue found that nearly six in ten global C-suite executives accelerated their organizations’ digital transformations due to the COVID-19 pandemic. About 66% of those executives admit that the pandemic prompted them to complete initiatives their organizations previously resisted.
“For many, the pandemic has knocked down previous barriers to digital transformation, and leaders are increasingly relying on technology for mission-critical aspects of their enterprise operations,” said Mark Foster, senior vice president, IBM Services.
“Whether reflecting on current conditions or future plans, business leaders’ needs for speed and flexibility have been amplified dramatically,” the study authors add, pointing to the pressure of unrelenting disruption, rapidly evolving customer expectations, and an unprecedented pace of change as motivating factors to innovate now more than ever.
The study, conducted by The IBM Institute for Business Value (IBV), reveals three survival tactics that C-suite executives have been using during the past critical months to transform how they do business: adapting to change, working smarter, and employee support.
Adapting to Change
Swift improvements to operational scalability and flexibility have been required across all business sectors. These improvements include permanent changes to organizational strategies.
“Adaptability is now a mandatory business competency, and an accelerated pace of change has become normal,” the study authors wrote. “It’s not that new tech was suddenly discovered and implemented; rather, the tools already at hand were deployed to fuller potential. Previous barriers to implementation were unceremoniously shoved aside, and those who moved first saw nearly immediate results.”
Moving ahead, 94% of study participants say they plan to participate in platform-based business models by 2022. Others report increasing partner network participation (IBV notes a 338% projected increase in partner network involvement by 2022). And the cloud? It’s the key to making it all work. IBV reports a 20% increase in cloud technology prioritization in the next two years, with more business functions, including customer engagement and marketing, being shifted to the cloud.
The pandemic has exposed weaknesses in critical workflows and processes. Intelligent technology has become a viable solution. IBV found 20% of executives are electing to prioritize AI technology, 60% have accelerated process automation, and an overwhelming 76% are prioritizing cybersecurity (according to IBV, that’s twice the amount deployed today).
McKinsey research has found organizations that rapidly adopted AI tools and algorithms, as well as design thinking, and used those to redefine their business at scale have been outperforming their peers. Chatbots are an example. According to Grand View Research, the chatbot market may reach $1.2 billion globally in less than ten years. We recently reported on the most effective use of chatbots for brands: customer service. That one simple tool can help save up to 30% in costs and improve customer response time, but it requires an expert balance of human versus machine interactions.
Even advanced tools like augmented reality (AR) and virtual reality (VR) are factoring in. Companies using AR have reported a 46% reduction in time to complete tasks and average productivity improvements of 32%. It’s not just available to giant corporations, either. Gartner expects 70% of small to midsize businesses will be looking to AR to enhance business operations by 2022. Plus, the prospect isn’t as scary to the workforce as one might think. A Mojo Vision report found that while about 75% of workers have never used AR/VR headsets or similar devices on the job, the vast majority (78%) are open to using the emerging technology if asked by their employers.
Some of the most surprising findings from IBV’s digital transformation study have nothing to do with technology. They’re about people.
“Participating businesses are seeing more clearly the critical role people play in driving their ongoing transformation,” IBV reports, adding that organizational complexity, inadequate skills, and employee burnout are the most prominent hurdles executives know they need to overcome over the next two years. In the immediate future, workforce safety and security are top priorities.
But what don’t they know? C-suite assumptions on how to support their talented workforce right now are off-kilter. While 74% of executives believe they have been helping their employees learn the skills needed to work in a new way, just 38% of employees agree. And while 80% of executives say that they support their workforce’s physical and emotional health, only 46% of employees feel that support.
If those stats sound familiar, they’re similar to what other organizations like Gallup have been uncovering during the pandemic. Employees need more from employers right now. Finding out how to close that gap isn’t necessarily magic. It starts with communication.
“Managers need to consider how transparent and clear they are about the process, and they need to consider how they can at least ‘touch base’ with employees more often,” Anne Walker, The HT Group’s Director of Operations, told us in response to a previous study revealing that only 17% of Millennials receive the meaningful managerial feedback they’d like.
Taking a Strategic Leap
“If there was ever a time to dig deep and take a leap into innovation, it’s now,” says Sam Wood, The HT Group Director of Consulting Services. “It’s been proven time after time: Companies that innovate during downturns are the ones that survive. The most accessible, safe, and cost-effective way to innovate right now is through digital transformation.”
But IBV’s study shows us that equal importance should be placed on technology and people. Innovation can’t happen with one and not the other. That’s the core premise of The HT Group’s Executive Advisor Team and Advisory Services: to help solve critical issues that often includes merging people and processes to transform business. Perhaps supply chain recovery is your top need, cybersecurity is keeping your executives up at night, or the right way to present IT initiatives for stakeholder buy-in is confounding your tech execs. Whatever the barrier to digital transformation right now, the best medicine could be to talk it through with someone who has been there.
“Bold businesses have used the pandemic to push through their fears and to embrace the solutions they’ve wanted to adopt for years. Other businesses stopped innovation dead in its tracks, which will drag them further behind,” Wood says. “Your employees need crisis support, but you need to push forward. What do you do? The answer is subjective, which is why a phone call one-on-one with an industry peer could make all the difference in the world.”
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