After several months of lockdown, we grapple with the implications and reflect on the magnitude of change that individuals and organisations have faced. As we head through the summer and toward 2021, we’ve reflected on what we’ve learnt in supporting our clients, and the insights gained from the broader market.
We have identified five key themes that are front of mind for all organisations.
We will tackle each of these over the coming weeks, sharing our collective insights and vision. This week we focus on the acceleration of...
3. Digital Transformation
The global pandemic has disrupted business models, hamstrung customer engagement, displaced workplaces, prohibited access to on-site resources, and led to peaks and troughs in demand for Digital solutions like never seen before. Organisations have only successfully navigated this when they’ve shown themselves to be agile.
The primary critical enabler for this is typically an organisation’s digital capability across their leadership, workforce, processes and underpinning technology. Although responses to Covid-19 have enhanced many organisation’s digital solutions and capabilities, now is the time to reflect on the rapid progress made considering what worked well and what gaps to ‘digital maturity’ remain. Afterall, most employees now hold proof that they can, in fact, work from home, and boards have learnt the hard way that they cannot be wholly dependent on an on-site workforce or traditional marketplaces. Whilst the ‘evolving norm’ is defined, we believe that journey will be led by digital transformation and centred on six core elements.
Prior to Covid-19, the International Labour Organisation estimates that the option to work from home was only available to 7.9% of the world’s working population . With flexible working options slowly gaining momentum over the last decade, digitising the workforce was a strategic goal for many organisations, but not a priority. Technology enablement, culture and working policies were seen as significant barriers to overcome. Following the pandemic however, the laggards have had to quickly and widely adapt, with those that had proactively invested in the infrastructure to digitally empower their workforce are emerging as victors.
With the success of productivity software solutions such as Office 365, Zoom, Slack, Google Meet and Microsoft Teams that enable remote working, organisations are now increasingly leaning on their technology leadership to implement advanced solutions to embrace digital ways of collaborating.
Outside the office environment, we have seen increasing focus on new digital workplace models such as remote patient care where providers have implemented video consultations, enabling virtual aftercare monitoring. The use of robots in conventional human-service based territory including interaction free supermarkets or robot bar-tendering and serving cocktails has the potential to ‘take off’ as customers seek human-less interactions. To make the anytime anywhere working options succeed, organisations must assess the skills and needs of the workforce and map against the available products on the market.
In 2019, before the pandemic, the year-on-year retail growth in the UK slipped into negative territory for the first time in 15 years, losing ground to ecommerce . The same was true for the rest of Europe and America . The shift to eCommerce has been accelerated by lockdown, as all sections of society have been forced to change behaviours and engage with online purchases. Successful organisations are leveraging technology to engage and transact with their customers digitally – bringing their goods, services and hospitality to the customer’s home. However, take-up, and therefore success, has been skewed.
Technology enabled Ocado has seen its share price increase by 50% since early February by dominating its sector  in part due to high quality, frictionless shopping experience tailored to the customer as an individual. Barclays has rolled out video banking to continue interacting with their customers ‘face to face’. Such humanless service models will grow increasingly common, from VR enabled storerooms that allow customers to virtually ‘walk around’ and review products, to digitally enabled products that can run self-diagnostics and inform the manufacturer of the fault so a repair worker can arrive with the correct parts and a clear understanding of the fault. These are not random anomalies - this is a consistent cross-industry revolution that has been accelerated by the pandemic. Having new and innovative ways to digitally engage the ‘buyer’ will be key. Organisations that can create exciting ways to understand, buy and use products and services will steal market share.
To succeed in the post-Covid world, businesses must rapidly develop and mobilise strategic plans to enter and increase market share of the digital marketplace. To complement this, they must utilise digital channels and data to enhance customer experience. AI channels will help manage increased volumes but should be used in conjunction with other technologies to maintain the personal touch.
The world of technology will be defined in a pre and post Covid-19 context going forwards. Pre-Covid cloud journeys began in safe and controlled ways, with research in early 2019 showing that only 58% of the companies had implemented SaaS with a further 28% planning for the same by 2023 . Covid-19 has shown that Black Swan events happen, and that to survive, organisations need technology infrastructure that is scalable, flexible and reliable. The power of operationally resilient cloud services can enable this. We are observing the ‘Cloud Only’ trend replacing ‘Cloud First’ strategy. Most of the organisations that are heavily reliant on their ‘on-prem’ technology and infrastructure (for service delivery, operations and maintenance) are planning for accelerated cloud migrations.
For organisations that have an established cloud computing stack for their operations, pandemic induced lockdown has certainly shifted the attention to underlying legacy infrastructure for remote identity-access management and secure inter-company transaction handling, amongst others. As a result, significant cloud computing enhancements are gaining momentum. For example, Identity as a Service (IDaaS) promotes adaptive multi-factor authentication through zero trust security policy and distributed ledger technologies offer decentralised, resilient and high integrity database solutions. These are complemented by advanced technologies for analytics and security. Deploying appropriate cloud capabilities such as these can increase your operational resilience, reduce your capital/operational expenditure and make sure you are ready for that next BaU impacting event.
Wherever organisations are on their cloud journey, now is the time to review traditional and legacy infrastructure and evaluate risk appetite and options to invest in accelerated plans for the more challenging migrations. It will be tough and arduous, but it is possible to achieve this with minimal disruption to BAU. It will result in a coordinated decommissioning of legacy infrastructure, which is paramount to the success of any cloud migration strategy.
In mid-March, 20% of the global population was under lockdown  and highlighted that enterprises cannot wholly depend on a human workforce. Organisations that were most resilient to this shock were those that have liberated their workforce from mundane, repetitive administrative tasks and the confines of a physical workplace through varying degrees and means of automation. More efficient, data driven organisational models are increasingly augmented with AI and are ’automation-enabled‘. This enables efficient remote working and allows organisations to process and interpret the vast amounts of data within their digital ecosystem.
Most businesses had already begun their automation journey over the course of the last decade. The highest potential of a workforce is after all in their creative ability, rather than operating repeatable, low cognitive, mechanical tasks. In manufacturing, the adoption of robotics has yielded significant savings in waste and labour costs. Research from organisations such as Gartner suggest that AI solutions will be mainstream in the next 10 years. Accelerated by Covid, the next generation of AI adoption will harness predictive automation.
In today’s competitive marketplace, this will provide game changing insights and advantages. In addition to enabling faster decision making, it will allow organisations to better use data to understand and serve their customers. Netflix, Apple, Amazon and Spotify showcase inspirational success stories of using predictive analytics to push targeted products and contents to boost sales and service usage. In the near future, AI will harness the vast amounts of exogeneous open source data to complement internal proprietary data, to enable faster and/or more accurate diagnostics in healthcare, safety inspections and product mix optimisation across energy and utilities, portfolio management in financial services and end to end supply chain optimisation.
To level the playing field, organisations must quickly identify which business critical, repeated and bottleneck tasks can be managed by AI. Additionally, data must form a key part of the digital strategy to determine how data can be leveraged – to improve decision making across the end-to-end supply chain, and personalise customer offerings.
Research by the World Economic Forum shows that cyber-attacks on digital networks across the world increased by 30% during the pandemic months of January to May . In particular, the UK has experienced a 60% increase in these events since lockdown was implemented . In the current IoT era where each household or workplace is connected through the web of internet, probability of cyber-crimes is magnified due to the vast amount of data shared over interrelated networks. With the Industry 4.0 induced onslaught of ‘smart-everything’ (from smart pet collars to smart-biometrics for counter terrorist activities), Covid-19 has introduced unprecedented levels of pressure on network infrastructures to remain resilient from any disruptions and ensure business continuity.
Due to the focus on cloud enablement, organizations must increasingly evaluate options to encourage resilience by design and embrace a culture of going beyond traditional regulatory compliance. This requires a risk driven approach and robust IT risk management protocols to realise the full benefits of their digital ecosystem. Investing in advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML) for automation of security procedures is a means to focus on business-critical networks that needs regular monitoring by minimizing human interventions.
Organisations will need to review their technology and digital infrastructure footprint, understand current risks and their Business Continuity/ Disaster Recovery plans. An ensuing measure is to adopt the security policies and subsequent digital strategy to promote resilience by investing in advanced and emerging technologies.
Over the last few months, no industry or market has been spared from disruption . Most, if not all, technology organisations are facing mounting challenges to address how they can collaborate, design, develop and deliver products and services to ensure these enter the market before the next wave of disruption! Evidence shows that Covid-19 has significantly shrunk the time a firm takes to implement Continuous Integration or Continuous Delivery, despite DevOps having been a prolonged strategic goal for many firms for over a decade .
Equally, the pandemic has acted as a stress testing mechanism for agile ways of working, with co-located teams being a thing of past. Establishing flexible ecosystem of partners and effective portfolio management with integrated workflow models is a means to prioritise offerings, minimise wastage and deliver more rapidly. Advanced data insights will continue to lead these decisions with an already evident paradigm shift in technology led delivery models.
Now is the time for organisations to revisit IT Operating Model and assess technology maturity to adopt DevOps, Agile or Lean principles, and innovate. The speed of transformation has increased, and multi-year Transformation Projects are now in the past. Investing in innovation to accelerate product delivery, whilst maintaining appropriate controls of supply networks and mitigating risks, will position the organisation as a champion for digital enablement.
Our recent learning with our clients and our view of the wider market has shown that to succeed in the future, organisations must digitalise their workforce and customer engagement. Achieving this relies on investment in (i) adaptive technology to provide scalable reliable infrastructure; (ii) AI-enabled business to realise savings from automating repetitive work and liberating the workforce to use their creativity to solve problems; (iii) Digital Resilience and Business Continuity / Disaster Recovery plans; and (iv) frontier technology models to rapidly deliver Transformation.
The past few months have placed unprecedented demands on digital services. Furthermore, for too many years, CIOs and IT Directors have been asked to do more with less, forced to rely on out of date infrastructure and ‘on prem’ applications. By contrast the past months have shown that investing in digital solutions can allow organisations to thrive in the most challenging of circumstances. Following the 2008 crisis, Sony rolled out plans to save $1.1bn over the course of 2009. Arguably, this led to Sony permanently falling behind competitors and losing their role as technology leaders . As Intel’s then Chairman and CEO, Craig Barrett, said at the time – “You can’t save your way out of recession – you have to invest your way out” . This is precisely what Starbucks and Netflix did, essentially spring boarding their continued growth to date.
The next decade belongs to the organisations that can best understand and act on the six themes identified here, and exploit the opportunities of Digital Transformation. At Moorhouse, the Digital and Technology Service Line helps our clients to achieve digital transformation as a strategic advisor and delivery partner. We help simplify digital transformation journey by identifying and implementing emerging technologies that add most value to the organisation.
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