As the global pandemic unfortunately endures in the United States beyond a challenging 2020, the ramifications continue for businesses, employees, consumers and the economy. One facet I’d like to focus on is the digital transformation that has accelerated during the pandemic and how it will likely impact us well into the future.
Digital transformation is defined as a radical rethinking of how an organization uses technology, people and processes to fundamentally change business performance. It often requires cross-departmental collaboration in pairing business-focused philosophies with rapid application development models. Dramatic changes like these are typically undertaken in pursuit of new business models and new revenue streams, driven by changes in customer expectations around products and services.
During this pandemic, it has become abundantly clear that businesses on a national and local level need to be flexible as they adapt to this new normal. The old digital transformation approaches aren’t equipped to deal with the pace or uncertainty of an economy impacted by COVID-19.
Digital transformation used to be a line item on many business agendas long before COVID-19 came along, then the pandemic catapulted it to the top of the priority list for virtually every business in the world. The pace of digital transformation has dramatically accelerated, making it not just a conversation starter, , but a basic business requirement. In fact, according to a Harvard Business Review research report, 91% of organizations surveyed altered their digital operating models because of the Covid-19 pandemic.
What COVID-19 has taught us about digital transformation
The initial economic downturn caused by the virus forced companies to make difficult budget cuts. Simultaneously, it drove many companies to fast track their digital efforts due to accelerated customer demand, limited in-person interactions, and remote employee needs. One consequence of the pandemic has been a dramatic uptick in the use of digital technologies that help reduce face-to-face interactions and safeguard customer and employee health and well-being. These digital technologies include consumer-facing applications such as grocery and food delivery services, business-to-business e-commerce apps, and apps such as video-conferencing that have penetrated both the consumer and business worlds.
Digitizing the employee experiences
Work-from-home has been the big winner of COVID-19. While some companies had already made work-from-home capabilities available to certain employees for years, no one thought we’d be able to move the entire global workforce into their living rooms and spare bedrooms without suffering some damage. For the most part, we’ve been able to.
The long-term potential for virtual workplaces is starting to sink in at the absolute highest levels of the corporate world. It will continue to affect everything from commercial (and residential) real estate to cybersecurity planning and training, evenproduct development.
With many large companies already reporting that they will not re-open major office locations after the pandemic, and some governments even contemplating making work-from-home a legal right, we’re rapidly building an expectation that everything should be able to be done remotely.
What COVID-19 has meant for digital users and service providers
The last year has seen US consumers (like me) flock to digital devices and screens unlike any time in our history. Among the winners:
- Digital Banking users: the pandemic has driven consumers to rely more heavily on digital channels for their banking needs. This has accelerated digital transformation for financial institutions in the US as their customers demand solutions that allow them to quickly and easily complete transactions remotely. To meet this demand, financial institutions have reevaluated their traditional strategies, implemented and even accelerated digital initiatives, and are more inclined to not just enable but encourage digital capability for their customers.
- Health & Fitness App users: with gyms around the country closing for long stretches of time, people looking to work out have looked online for suitable alternatives. During lockdowns, gyms and fitness studios were left with no other choice than to increase their digital presence. Many started offering virtual classes, allowing members to access services from the comfort of their own homes. Lockdown also inspired people to improve their home gyms and invest in home fitness equipment. Exercise equipment company Peloton surged in popularity last year with an estimated $1.8 billion in revenue expected by the end of the year. That’s about a 100 percent increase from the $910 million in sales the company made in 2019.
- Live Video users: the popularity of livestreaming video content (including news, sports, live events, gaming, etc.) was already growing massively, but with the pandemic forcing people to look for more activities at home, the popularity is even more explosive. In fact, according to Nielsen, consumers in streaming-capable homes in the USS now spend 25% of their TV time watching streaming video content.
- Subscription Video viewers: this is another one I can personally relate to. It’s no secret that Netflix, Amazon Prime Video, Disney+ and many others saw tremendous growth in 2020 with all the time families were at home. My personal favorite, Netflix, saw the healthy growth spurt they enjoyed last year because of the coronavirus finally coming to an end. The video-streaming giant, which has been one of a handful of companies to get a big business boost from the pandemic, recently posted weaker-than-expected earnings and slowing subscriber growth due mainly to increased competition.
COVID-19 has taught us many lessons in the business world, most importantly to be customer-centric and agile. Those with a strong focus on innovation that helps transform business norms will be better primed for future success in a new post-pandemic world.
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