As businesses transition into a new ‘normal’, tech developments are here to stay.
The economy is sparking amid the coronavirus crisis, and technology has never been more key to business success than it is right now. Though many companies were already starting to adopt technologies before the pandemic struck, COVID-19 has only reinforced technology trends across all business sectors and expedited corresponding policy responses. As technology enables companies to strategically position themselves as the most efficient, quality-driven, and forward-facing in their markets, it’s no surprise that the companies that have arguably responded most effectively to the coronavirus have hastened their experimentation and innovation processes.
Here, technical director and co-founder of Fresh Thinking Group (FTG) Dave Antrobus takes a look at how technology is rapidly redefining business approaches, both in the short and long term.
How Technology Has Impacted Employment
As technology evolves at the speed of light, its impact on employment opportunities is moving almost as quickly. One year ago, technologies were already challenging traditional business approaches by speeding up production processes, scaling digital platforms, evolving global value chains, and enabling people to collaborate with colleagues all over the world. This meant that small start-ups have been able to expand into global behemoths, even with few employees and few tangible assets, and that digital platforms have been able to develop in even the most rural of areas.
However, concerns have risen as such technological advancements have moved the gatepost for job roles in the labour market. As we continue to introduce robots and artificial intelligence into our workforces to uphold productivity amid the pandemic, the less we need humans to take on manual occupations. The Harvard Business Review explains that, as of the end of 2020, there are now three million industrial robots in operation – more than double than there were in the seven years between 2014 and now.
While this may not seem like the ideal time for robot-induced job losses, the pandemic-driven rise of tech has pushed the labour market to expand, leading to new job openings involving cognitive skills. As technology helps businesses to improve efficiencies, many companies are now building vast online platforms and/or using technology to approach remote markets that they previously didn’t have access to – requiring new employees on both fronts. The Harvard Business Review concludes that, since 2001, occupations requiring non-routine cognitive and socio-behavioural skills have risen from 19 percent to 23 percent in emerging economies, and from 33 percent to 41 percent in advanced economies. In short, COVID-19 has only accelerated the rise of these roles due to increased automation.
How Businesses Have Used Technology to Stay Afloat During COVID-19
Employment aside, businesses have had to implement technologies of all shapes and sizes to stay afloat during such a turbulent year. As a result, the global partnership firm McKinsey & Company has put together an extensive survey to examine how the pandemic has ‘pushed companies over the technology tipping point’, changing the way that businesses operate forever. The survey compiles responses from 899 executives and senior managers, who represent all regions, industries, and company sizes. These responses reveal key insights into the profound changes that technology has enabled during a challenging year. Dave Antrobus details these changes below.
How Technology Has Enabled Businesses to Digitise Customer Services, Product Portfolios, Internal Operations, and Supply-Chain Interactions
Unsurprisingly, many of the businesses that have transitioned their services online or maximised their online stores have been able to dominate their markets, and e-commerce stores have taken far more of the market share than competitor brick-and-mortar stores. In fact, McKinsey respondents are now three times more likely to report that 80 percent of their customer interactions take place digitally than they were before the pandemic.
But it isn’t all simply about transitioning online to make the most of the e-commerce market. The McKinsey survey shows that most companies have also accelerated digital or digitally enabled product portfolios by a whole seven years (10 years in developed Asia), implementing solutions to meet evolving demand during the pandemic. While some of these solutions are temporary measures, many businesses have invested in new technologies for the long haul and have even increased funding for their ongoing digital initiatives.
Interestingly, the time taken to develop digital portfolios during the pandemic has differed greatly between sectors. For example, businesses in consumer-packaged goods (CPG), automotive, and assembly sectors haven’t needed to adapt their digital-product portfolios as much as businesses in healthcare, pharmaceutical, financial, and professional services. In these sectors, McKinsey respondents reported nearly twice as much diversification as respondents from CPG businesses.
Aside from digitising businesses’ customer-facing processes and product portfolios, many of the survey’s respondents have also digitised their supply-chain processes and internal operations – including back-office, production, and R&D systems. Overall, companies have acted 20 to 25 times faster than expected to complete this digitisation. The McKinsey survey shows that, on average, companies have expedited the digitisation of their customer and supply-chain interactions and internal operations by three to four years.
How Technology Has Enabled Businesses to Embrace Remote-Working Cultures
Speaking of internal operations, the COVID-19 lockdown has proven that many of the UK’s workforces can successfully work from home without sacrificing outputs – all while saving office overheads and commute costs. The roles that are most conducive to remote work are particularly prevalent in the wealthiest countries, including the UK, where many remote workers are highly educated and in full-time salaried roles. However, digital infrastructure is comparatively poor in many developing countries, making remote work much harder to manage.
On average, companies completed the shift to remote working an impressive 40 times faster than respondents expected. Before the pandemic, most companies expected that a hypothetical transition to full-time, company-wide remote work would take over a year. However, in the event of the crisis, companies managed this successfully in an average of 11 days – and only 14 percent of the respondents said that a lack of leadership hindered the shift.
The McKinsey study also questioned why many companies didn’t implement remote working before the crisis. Just over 50 percent of respondents said that transitioning to remote cultures simply wasn’t a priority at the time. Around 30 percent of B2B respondents said that their companies hadn’t shifted to remote working in fear of customer resistance, though this was only a concern in 24 percent of B2C businesses. Meanwhile, other businesses were previously reluctant to offer remote work as an option for employees because of concerns surrounding change of routine and lack of technology infrastructure.
How Technology Will Change Businesses Beyond COVID-19
While it might not be feasible for businesses to keep some technological changes long term due to their cost-effectiveness and ability to meet customer needs, survey respondents across all sectors and locales report that they will keep remote working, remote customer interactions, and health and hygiene sensitives in place for the foreseeable. Respondents conclude that remote working and cloud migration have offered the most cost-effective business alignments during this challenging year, while investments in data security and artificial intelligence have best-helped companies to re-position and face the crisis.
The shift to interacting with customers and clients remotely has required numerous companies to invest in data security and accelerated cloud migration. But now that companies have made these investments, the new systems are in place as permanent, better-fit measures. As a result, almost 25 percent of respondents reported a decrease in their physical footprints, saving time and costs while offering environmental benefits.
A New, Technological Business Landscape
It’s fair to say that the coronavirus crisis has triggered a sea of changes when it comes to the ways that companies view technological applications. In a 2017 McKinsey survey, around 50 percent of executives highlighted cost savings as one of their top priorities for digital strategies. Now, only 10 percent are looking to cut costs when it comes to technology. Instead, these same companies are using tech to ensure competitive advantage and refocus their businesses for success in a post-COVID world.
Of course, the implications of COVID-19 are far from over, and we can expect to see further changes in our working models and approaches. Businesses will continue to embrace technology and upgrade their digital training programmes so that their staff can consistently develop their skillsets and gain relevant qualifications while working remotely. Plus, as businesses continue to adopt more technologies, governments will need to update their policies regarding incentives, regulations, infrastructure projects, and taxation.
We conclude on the message that technology is no longer an option for businesses, but a necessity if they are to flourish and expand. The pandemic has forced companies and the government into a position where we must adapt for the future and embrace technologies as doorways to growth. As we prepare to welcome technology even further into corporate cultures, we must protect and empower workforces with new opportunities for the future. The pace of change is unlikely to slow, and businesses must continue to learn and adapt, both tactically and organisationally.
About Dave Antrobus
Not only has Dave single-handedly developed award-winning systems and worked for notable brands such as Karen Millen, Coast, and Harvey Nichols, but he also embraces a consultancy-led approach to work with numerous development teams on large-scale projects, acting as a mentor to guide these teams through software challenges. As FTG’s lead for all things technical, Dave offers code reviews, training courses, and regular meetings to help developers hone their skills and design the most advanced solutions in digital platforms, mobile apps, and advanced websites. This way, FTG’s acquisitions benefit from the highest level of software solutions.
Learn more about Dave Antrobus’ technical solutions for companies looking to grow, distressed businesses, and start-ups at https://freshthinking.group.