The COVID-19 pandemic has caused massive disruptions in modern times. It has changed the way of almost everything including lifestyle changes, limited movements, shutting down operations/companies, etc. It affected the global economy significantly. In the past year, we have seen businesses change their ways of operating, their strategies, market focus, and the channel of reaching end customers, and so on. Most businesses have passed the survival phase, and are now focusing on how to operate in the new normal.
Global GDP growth affected badly, the unemployment rate increased significantly due to COVID-19. The IMF (International Monetary Fund) estimates that the global economy shrunk by 4.4% in 2020 and described the decline as the worst since the Great Depression of the 1930s. According to IMF, the only economy that has grown in 2020 is China with 2.3%. The IMF is predicting global growth of 5.2% in 2021.
Amidst the outbreak, globally most businesses started to work from home and continuing their operations smoothly. This translates that globally the economy is becoming digital and digital will be the new normal. According to Bangladesh Bank, inter-bank internet banking has jumped by nearly 214% in the post-COVID period in Bangladesh. The internet bandwidth usage reached a record 2000 Gbps at the end of 2020 (Jan 2020- 1270 Gbps) in Bangladesh that indicates the use of digital channels gained pace in the crisis.
According to a survey conducted by KPMG, 67% of organizations have accelerated their digital transformation strategy, and 63% of organizations have increased their digital transformation budget. To perform better in the new normal, organizations have to reset and rethink their strategies. While formulating a new strategy, rigorous reassessment of the current strategy is important. Based on the outcome of the market analysis, formulation of a future-proof strategy is necessary. Companies should target to become a resilient company with proper evaluation of the vulnerabilities and opportunities.
Digital transformation is the most critical part for businesses to navigate themselves in the new normal. Without proper execution of the digital transformation journey, companies will fall behind in the race and face multiple challenges in their productivity. The World Economic Forum has identified seven common business dimensions, which can help in understanding how to digitalize businesses with purpose, successfully. These include:
- “New value” to identify dynamic value map
- “Business models” to be a data-led digital ecosystem
- “Operating model” to be agile and AIenhanced
- “Supply chain” to be localized, resilient and efficient
- “Decision making” should be predictive, real-time, intelligent, at the edge
- “Finance” to be de-risking cost/revenue, finding new revenue
- “Talent management” to be rapidly upskilled digital workforce, talent-on-demand models
In the journey of the digital transformation in the new normal, businesses have to ensure the right use of technologies that includes AI, Data Analytics, IoT, Blockchain, ML, FinTech, etc. In addition to these, companies have to revamp their way to service delivery and customer experience. On the other hand, the use of digital platforms, cloud, virtualization, massive automation, etc. will help to realize the full potential towards better productivity.
Cyber resilience is another key factor considering the digitalization of businesses. According to the Tech Republic, 46% of businesses have experienced at least one security incident since the COVID-19 outbreak. To ensure a cyber-resilient organization, massive awareness, simplified systems removing complexities, use of multi-factor authentication and considering the move to cloud-based operation high-security measures is necessary.
Globally, major companies already started to act to ensure digital transformation. Chevron is using data generated from oilfield digitalization (sensors, automation, and digital twin technology) to make “on the edge” decisions in the field. It helps to predict failures, optimize logistics choices and select the most valuable wells for intervention. DHL has enhanced human capability in warehouses by providing Google’s second-generation smart glasses with “vision pick” products that resulted in a 15% productivity boost.
Businesses have to reboot their strategies and adopt digital transformation and this is the right time to act to remain relevant. If businesses do not reshape and transform their businesses, most businesses will not sustain in the new normal. As most of the global giant companies already reshaped and started to transform, they have started to enjoy the benefits out of it as well. Thus, the businesses that are yet to start transforming through rebooting their strategies must act now.