Digital transformation and COVID – acceleration during and after the pandemic

The COVID-19 pandemic has massively driven people, organizations, and governments to digitalization and digital platforms as we all try to cope with the disruptions the outbreak causes in our lives, societies, and businesses. While the human toll of the pandemic, a disaster for so many people, keeps increasing many already look at how COVID impacts digital transformation.

Enterprises leading in digital transformation are significantly less vulnerable to the epidemic, while enterprises leading in work resource transformation have a better ability of long-distance coordination and higher overall work efficiency (IDC)

Measures to contain and mitigate the spread of the disease such as event cancellations, recommendations/obligations to work at home, school closures, and physical distancing have shown how digital applications and the infrastructure that powers them are essential these days. And the big magic word everyone now uses is resilience, with additional attention for cyber resilience.  

The increasing usage of digital technologies in times of crisis isn’t new. Still, in this reality in which we now live, the scale is quite unprecedented and has accelerated digital transformation across several areas of society and business indeed. What will last and what will prove to be less lasting is another question as the major disruption of the pandemic is still to be felt on various other levels that might reshape quite a bit that has nothing to do with transformation, let alone technology.

Still, it’s clear that in ample areas, all sorts of platforms and applications weren’t just used more but that digital transformation efforts picked up speed here and there as well, especially because many people for the first time ever used digital channels in ways and for goals they hadn’t used them before. And, of course, organizations scrambled to adjust or proactively take measures. Moreover, many organizations that were ahead in their digital transformation efforts reaped the benefits because they already had experiences, capabilities, processes, and systems to rapidly shift to more digital and remote ways of working, learning, collaborating, and so forth.

Pandemic hope

At the same time you can wonder in how far that goes for companies in the tech industry who typically would be in such a position and see demand for their services increasing in these times anyway.

The lasting effects of COVID on digital transformation and digitization

Many of the digital transformation accelerations which we’ve been witnessing in the past few months will have a lasting impact. To what degree? We’ll see. Many predictions on the acceleration of digital transformation because of COVID-19 have been made, many will prove to be wrong.

Governments more than ever will define the agenda, as will culture, industry and the hard to predict social and even ‘mental’ impact of this all. If you’ve been living as long in a lock-down as we did you can be sure that the ‘human’ element becomes ever more important and the only highly advanced technology many of the folks we know that enables to leave the realm of productivity of teleconferencing and the likes now and then is often a good old unexpected phone call.

And concerning governments: local becomes more important and differences more apparent: not just between regions and countries but also between tribes. For international brands who think they can simply adapt their efforts to each country without adapting it to the local situation to save costs; better think twice.

Organizations that are further along the digital transformation and cloud migration scales are likely to be best-positioned in terms of integrating these technologies into effective and agile response plans

The areas where technologies will be increasingly used are pretty well known by now. And, yes, now that we talk about brands, many companies in the short term will do more in ‘digital’, including digital marketing. But that’s mainly for those seeking fast results. Strong brands that still do well (you would be surprised how many, they just don’t want to shout it off the roofs) will go less for digital and invest in the longer term. Smart brands do both, certainly in times of crisis, if they can of course.

Also watch out for overtly optimism about how digital everything will be. It’s not what people want. They want it all, hybrid if you like to give it a name (because of our binary thinking). Looking at what execs are saying about remote work, for instance, we already see huge differences within one region with some saying they’ll keep massively promoting it and others saying (literally) ‘no way, then I might as well outsource to countries with cheaper labor’. Some things will never change, whether you hope there will be some ‘new normal’ or not.

At the same time, organizations that are further ahead in their digital transformation strategy journey are expected to rebound faster than their peers, potentially even leading to a more significant gap between those that transformed more and those that did less. This is especially the case for organizations that understood software, recurrent revenues, as-a-Service models, and customer experience are critical differentiators, ever since software started eating the world, and digital platforms enabled to rethink entire industries.

Disrupters disrupted and a few areas to watch

These include disruptive newcomers, albeit with differences per industry as some are particularly hit, and organizations that managed to make the shift towards being a digital company, protecting their core business while transforming from the edge and developing the applications and services people today want.

Several of those disruptive newcomers you still might use in your digital transformation presentations by the way have shown their real face and the weaknesses of their models which in some cases are far less solid than believed. But we all knew that. For pundits it might be time to replace some logos of ‘disrupters’ by darn good existing innovators if they at least still use them.

Some of the new economical models have proven to be vulnerable but more will have a hard time once the social and economical impact kicks in. Again, this will differ per region but we don’t expect the so-called gig economy, for instance, to have as much fans as it had in some European countries. And some of the larger platforms, for instance in e-commerce, have shown they don’t get local markets and culture all too well.

What’s different now is that cloud is a bigger factor than it was in any previous global recession, and this should mean that overall spending is less volatile than in the last two major IT spending downturns (Stephen Minton)

More predictions and areas to watch? For the moment not too many. Yes, there will be more facial recognition and debates surrounding it. Yes, companies will automate more (and no doubt many will forget to innovate) with several Industry 4.0 areas of investment picking up again and also security and employee protection becoming paramount as the numbers of deaths in manufacturing-related jobs in some countries has been really high (more below).

There will certainly be investments with regards to essential services and the jobs of those who are most hit (more below). But the main impact, as far as we’re concerned, will be on the reorganization of our built environment and facilities. Care homes will look different, open spaces will be revisited, construction priorities will be impacted and smart city and community efforts will be taken whereby in some countries ecology, sustainability and the circular economy will be key for investments, funding and putting people first again. One of the winners here: the Internet of Things. And then there’s the obvious. A few examples.

COVID-19 and digital transformation readiness gaps

The digital divide,differences in digital transformation maturity and the degree in which organizations have innovated with smart applications and as-a-Service models, will have an essential impact in the future for many though.

So, among the many challenges which we now face, making sure that we can narrow and even close potentially broadening gaps is essential. For digitally more mature organizations, it will be critical to take another look at their priorities since we can’t ignore that the significant challenges of our time don’t just concern aging and growing populations, climate change, and changing consumer behavior. And for some, it will be essential to transform faster from the edge or even change the very core of their business models.

Preparedness for massive disruptions and the capability to predict and prepare for seemingly unexpected global events are equally important. Balancing goals and initiatives that help us protect workers and partners, get the economy back up as fast and efficiently as humanly possible, realize mid-term goals, and continue to prepare for the future will be essential. For executives such as CIOs, the pressure is enormous, and teams need to watch over immediate priorities such as keeping the lights on, adding remote workers, and planning for the next stages of digitalization.

The most visible effects of the COVID-19 outbreak in a digital context concern essential services. These include the digital infrastructure that is at the basis of it all, how we work, education, healthcare, online shopping, supply chains and the digitization of processes and activities which could and should have been done by now in areas where there is still much low-hanging fruit. Let’s look at a few.

The inevitable shift to remote work during the COVID-19 pandemic – for some at least

To protect employees and ensure business continuity in these times when people are urged to stay inside, the uptake of remote work and collaboration platforms is unprecedented. But again: beware of predictions about lasting impact.

Here are some sad but hard facts: Britain’s Office for National Statistics (ONS) found that 1) men working in low-skilled or caring, leisure and other service occupations had the highest rates of death involving COVID-19 and 2) women working in caring, leisure and other service occupations had the highest rate of death involving COVID-19 compared with women of the same age in the general population.

That isn’t just very saddening and even outrageous. If you look deeper into which types of jobs are concerned you might find a few where remote working hopefully gets more used where it’s feasible, on top of for those in, let’s say, ‘our industry’. If you wonder about priorities in manufacturing a quote from the ONS: “Road transport drivers, including male taxi and cab drivers and chauffeurs, had some of the highest rates of death involving COVID-19. Of the remaining major occupational groups with high rates among men, those who worked in Process, plant and machine operative occupations had one of the highest number of deaths overall (242 deaths). This group includes occupations whose main tasks are to operate and monitor industrial equipment; assemble products; and drive and assist in the operation of transport vehicles and other machines”. In the US, the nature of one’s job has proven to equally have an important impact on mortality.

There’s a lot of talk about remote work, it isn’t new, and many organizations already offered it. Yet, for some, the current shift to remote work is born out of necessity and will have a lasting impact as it will on the further evolution of digital HR and, most certainly, digital health.

Providers of applications for videoconferencing, collaboration and, to some extent, UCC, have been offering free versions to help affected companies. Companies and workers who so far had no experience with remote work had to learning as they went, helped by eager vendors and advice of people having remotely worked for a long time. The adoption of remote work platforms skyrocketed with the occasional outages as a result of too much demand. The advice on how to work remotely, manage remote teams and make sure that remote work happens securely has skyrocketed as well as companies offering solutions for remote work also know that the impact of COVID-19 on the face of work will be lasting – and thus good for their business.

By way of an example of how dramatic the impact on remote work has been, one can look at the increased adoption of videoconferencing platforms, as you can read below. Still, a better barometer for the future is probably the number of workers and companies that now discovered remote work or move beyond some essential experiences. As Reuters reports, in Italy, one of the most affected countries, the approach with regards to distance working, has changed overnight.   

COVID and the digital transformation of education – the shift to online learning

As the COVID-19 disease outbreak spread, the number of countries that started closing schools and universities increased rapidly.

According to UNESCO, that tracks the COVID-19 impact on education, on April 10th, there were 188 country-wide closures with almost 1.6 Billion affected learners. To ensure learning continuity, organizations, schools, governments, and teachers scrambled to provide distance education possibilities with online platforms.

Here as well, many learn as they go. Moreover, while the shift to remote work happens more in coordination with employers, in some countries and education systems, ensuring the continuity of education often also consists of grassroots initiatives whereby communities, companies, teachers, and schools collaborate with an enormous amount of effort. It’s clear that here too, many efforts and experiences will have a lasting impact on the transformation of education.

What is transpiring today will not only change the way people communicate, it will also impact and enable business continuity in the future (Chuck Robbins)

Moreover, it’s not just about schools and education systems. As digital transformation accelerates, the need for talent and tools to make it happen increases, and tools require training. There is also a clear need to get people trained in these many areas where we’re now seeing more online solutions being used, such as telework.

Finally, the education aspect in the digital transformation of business, industry, and society is already vital. With virtually all real-life events, from tradeshows to conferences and trainings, being canceled or brought online, the importance of digital training platforms and of online communities where people can share their experiences, increases in business too.

The crucial role of infrastructure in transformation during the pandemic

These are certainly not the only areas where the COVID-19 disease outbreak will have a lasting impact on the acceleration of digital transformation. Moreover, several organizations will need to step up digital transformation efforts across ample industries as it has become clear that those sectors that used to be more hesitant have been disrupted. Laggards need to become leaders.

Early March, IDC conducted a CXO survey in China. It showed that enterprises leading in digital transformation are significantly less vulnerable to the epidemic. The outbreak boosted enterprises’ sense of response to force majeure, which will accelerate their all-round digital transformation.

Collaborative office, online marketing, video conferencing, customer management, remote support and service and other systems have played a tremendous role in coping with the challenges posed by the epidemic (IDC)

An essential element that needs more attention as we are confronted with the COVID-19 disease, its impact on society, our lives, and the uncertainties we all face is the infrastructure that enables us to transform digitally and is vital to be more resilient and future-proof.

The collaborative office, video conferencing, remote work, online education, and other systems we now use more across the globe, are enabled by fixed and mobile networks, data centers, cloud systems, and edge computing.

Throughout the current crisis, we’ve seen how important connectivity is in both our private and professional lives. Operators and solution providers worked together to ensure it, for as many as possible, mobile networks helped track the outbreak and impact of measures, and cloud computing companies enabled us to work online with ample software players having built tools upon the cloud seeing fast growth

Impact on the Internet and applications – streaming and software

Several technology companies and providers of online services, for businesses and consumers alike, took initiatives to help those impacted by the novel coronavirus’s impact. Many are expected to benefit in the longer term as some shifts will remain.

If we look at the impact on applications and services, some clearly stand out: videoconferencing applications and streaming platforms. Their increasing adoption even affected the Internet.

Let’s start with videoconferencing. As the novel coronavirus spread, we saw pretty much the same picture emerging everywhere as more people began to stay at home. The shift to remote work, where feasible, and to online education and training caused considerable spikes in the adoption of unified communication and collaboration platforms, more limited videoconferencing applications, and other types of remote working/learning/collaboration platforms.

Providers, who often already offer free versions, started to provide more capabilities for free, sometimes for specific types of users. They also rapidly started adding new features users seemed to value in the applications they picked.

Zoom rapidly became the most preferred application for videoconferencing, virtual meetings, and online classes but also for private usage with its focus on video and user-friendliness. The platform seemed to reap the fruits of years of work to become a more ‘user-friendly’ video conferencing alternative. In March, it also made its Zoom Phone cloud phone service available in more countries. Yet, as the adoption of the platform increased, the company saw itself confronted with a range of security and privacy issues that forced its CEO to announce drastic measures.

More established platforms, also in the enterprise space, saw usage increase fast too:

  • Cisco’s Chuck Robbins commented on the massive need for collaboration technology on April 1st, saying that in one day alone, Webex handled 4.2 million meetings, which is over twice the average on a peak day before the pandemic. Indicating that demand keeps increasing, he added that WebEx had hosted 14 billion meeting minutes in March, more than double the number in February. In March, Webex counted a record of 324 million registered attendees.
  • Microsoft Teams (that will replace Skype for Business as of this Summer and also added several new features) saw its number of daily users increase to over 44 million, as Microsoft announced on March 19th. In the seven days before the announcement alone, it had grown by 12 million users.
  • These aren’t the only platforms that saw usage skyrocket. From enterprise and small business applications such as Slack, LogMeIn GoToMeeting and Google Hangouts to more consumer-oriented applications such as the regular version of Skype and Facebook Messenger (which was also launched in a desktop version): they all witnessed increases.

While it’s hard to give an overall number (also because everyone measures differently), it’s clear that the impact has been and is enormous. No wonder that according to IDC in the declining IT market, there will be pockets of opportunity for software and related services during the next six months, as organizations create response measures focused around increased remote work and collaboration.

An essential finding across all types of videoconferencing, collaboration, and remote work applications is that more than ever, both voice and video were used (instead of sometimes just chat) as people really want to feel a personal connection in these times of hardship as said before.

We want digital change and we need Internet – but we also want to smell and touch

Next, there is streaming. As people across the globe need to stay indoors, there has been a massive impact on video and entertainment streaming services, from Netflix and YouTube to Disney’s new streaming platform that launched in several countries during the pandemic. And these are just some of the main ones.

In some countries, these players and others were asked to stream their content at a lower quality because network traffic rapidly grew as people started using the Internet to work, connect with their friends and families, shop online and find much-needed breaks by, for instance, watching movies.

The Internet and cloud service providers so far have coped with all these increases in digital traffic, although there have been several outages. With mobile downloads of the types of mentioned applications spiking and streaming on cellular networks, the need for a resilient and fast infrastructure as 5G is supposed to offer only became more evident, as did the demand for robust cloud platforms and broadband services. It’s one of many lessons that will translate into more attention for vital areas of our digital society on top of the challenges seen with regards to cybersecurity and digital transformation readiness.

As Cisco’s Jonathan Davidson wrote in a blog post with more data such as the impact of the disease outbreak on Internet traffic increases at major peering exchanges as you can see in the image below, the Internet is no longer simply critical, it has become ESSENTIAL, and it grows from huge to MASSIVE.

COVID-19 pandemic and Internet Traffic Increase at Major Peering Exchanges

Yet, for organizations, the main challenge will be to transform faster and move towards the cloud. Or, as IDC puts it, in the mentioned IT spending forecast, adjusted for the impact of COVID-19, ‘organizations that are further along the digital transformation and cloud migration scales are likely to be best-positioned in terms of integrating these technologies into effective and agile response plans’.

And what will people want? Again, it depends. There is fear, there is anger, there are changing patters. But the voice of a friend, the touch of a loved one and, as someone earlier today said, the ability to simply be able to smell people again, will always remain key.

Is this all there is? Most certainly not. But it isn’t over yet and the real consequences still need to be seen.