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The pandemic continues to dominate news headlines around the world. The ongoing pressures of the health crisis emphasise how critical remote working, business agility and digital customer engagement are to business. Business leaders the world over are reflecting on the need to build resiliency, flexibility and agility into their organisations (I explore some of my initial reflections in an earlier post here). But in the long-term, this must be about more than survival. We must, as business leaders, find ways to transcend survival mode, revive, renew and work to thrive again. And we can start to do that now by applying the lessons we have learned from earlier stages of the pandemic.
Even prior to the pandemic, industries were compelled to innovate as they faced large-scale disruption due to shifting market dynamics. Incumbents faced pressure from ‘digital disruptors’ – and yet the majority of businesses had been taking an incremental approach to technology adoption, avoiding large-scale transformation. With many of our preconceived notions about how things have to be done now being challenged, now is the time to re-think. Throughout history, there are many examples of businesses that have reinvented themselves to face a crisis or those that were born out of a need identified in a crisis. And from a technology perspective, innovations including cloud, blockchain, IoT and more, are reaching a stage of real maturity and robustness. They are there for the taking. And broadly, if we consider technology as a life-jacket for survival, this offers a useful vantage point.
Both the financial services and retail sectors are critical as we rely so heavily on both businesses and consumers continuing to make financial transactions and being able to rely on a seamless supply chain to access to essential provisions. In a recent Omdia survey of over 300 UK companies commissioned by IBM, over 50% financial services organisations reported having already completed or being well into the advanced stages of their digital transformation programmes, leading the charge across all industries. Some retailers, on the other hand, appeared less prepared. Those with established and advanced digital experience (DX) programmes in place (36%) were able to flourish, while those without were at a distinct disadvantage when the pandemic hit.
The same survey discovered that 88% organisations across all industries agreed that technology helped them to mitigate the impact of the crisis. And 60% of organisations are considering changing their business and operating models, citing this as one of their main challenges beyond lockdown. New digital products and services, an intelligent supply chain, and omnichannel customer engagement are seen as priority objectives. Let us take a closer look at how the financial services and retail industries responded and examine some key priorities for both.
Digital by default: An imperative for the Financial Services Sector
Almost four in ten (37%) of Financial Services organisations polled agreed that the pandemic highlighted shortfalls in their already advanced digital transformation projects. This sector is dependent on both the economic health of businesses and on an uplift in household expenditure. Organisational agility, therefore, is a critical capability, but it can present a significant challenge for such a highly regulated environment. In fact, almost half (44%) of business leaders in this sector see complying with workplace requirements and legislation as a main inhibitor to transformation progress.
Budgets may be constrained but enhancing operational resilience and business continuity is a top priority post lockdown, particularly among the largest Financial Services organisations, marking a dramatic shift in priorities compared to those of only six months ago. Almost half (42%) are planning to significantly increase investment on workflow and business process management to enhance organisational agility and a similar number (48%) cite a need for more digital components in their product and service offerings, expressing a shared goal to become ‘digital by default’. More than half (61%) of respondents cited cybersecurity as a key investment area, noting that they plan to increase their investment in threat detection systems, while a similar number (53%) plan to increase investment in AI and machine learning to support customer driven insights.
Nationwide offers a great example of transformation born out of a need that arose in the early stages of the pandemic. Britain’s biggest building society built a virtual agent, named ‘Arti’, based on IBM Watson Assistant, to answer some of the most common questions about mortgage support for those impacted by coronavirus. Arti has been supporting Nationwide’s frontline teams by responding to tens of thousands of enquiries, freeing up hundreds of hours for colleagues to deal with more complex queries from the building society’s members during these difficult times.
Rightsizing for the future: A priority for the Retail Industry
On the one hand, the pandemic was punishing for most physical retail stores and call centres due to social distancing measures, and on the other, there were opportunities as e-commerce activity skyrocketed under lockdown. Savvy retailers quickly spent time “rightsizing” their footprints to strike the optimum balance between physical and digital in order to meet changing buying patterns, improve margins and ensure future growth. Converting or enhancing offerings with digital technologies is essential for retailers. In fact, 86% of our survey respondents agree that technology can help mitigate the effects of a crisis. However, at the start of the pandemic, just one third (33%) of companies in the sector reported being fully prepared for engaging customers ‘anywhere’.
And indeed, retailers in the early stages of their digital transformations admit that they should have invested earlier in digital, data-driven and cloud technologies. Technology adoption is now escalating, with two thirds (75%) of retailers investing in accelerating agility and efficiency, enhancing IT resiliency and business continuity, and 62% improving omnichannel engagement with customers. 95% anticipate increased investment in AI specifically to gain better supply chain insights, and the same percentage plan to increase investment into cloud applications and cybersecurity defences. A great example of deploying cloud and AI to enhance daily operations is Coca-Cola European Partners (CCEP) who recently signed a multi-year agreement with us to accelerate its transformation to an open hybrid cloud environment, with a view to reduce its operational expenses, increase IT resiliency and lay foundations for the future.
The time to act is now
There are many challenges ahead, and doubtless, our business and societal environment will be indelibly altered. But we believe businesses will emerge from this pandemic to be smarter and stronger if we see the challenges we face today as a turning point for digital transformation. As business leaders the time to act is now. The question is how far will each of us open the aperture to new possibilities? Will we be incrementalistic or transformational in our adoption of mission-critical technology? How far will we challenge the art of what’s possible for our organisations? It’s up to us. Let’s rethink together.
I invite you to join the conversation at Think Digital Summit UKI on Wednesday 7th October 2020 where we invite you to re-think about business in the context of this new pandemic-informed world so that we can emerge stronger and smarter. We have a carefully curated programme of industry-focused keynotes spanning many industries, live debates, experience channels and a fantastic line-up of speakers. Register here today.