The pandemic forced firms to re-evaluate and realign their priorities towards flexibility, adaptability and sustainability. Businesses should take this opportunity to transform and get ahead of the trend.
In the race for building a successful organization, digital transformation had always remained in the shadows. Many companies had been dipping their toes and selectively implementing technology in bits and pieces. However, the pandemic brought in a paradigm shift in the way organizations functioned and re-iterated the significance and need for digital transformation.
Organizations had to adapt to the new normal through innovative business models and partnerships. Businesses saw a significant shift in their spending patterns to cater to the needs of their customers and employees. Intermittent micro-market shutdowns decreased demand, and supply disruptions led to the birth of new ways of working through use of digital technologies. Digital emerged as one of the frontrunners in re-allocation of budgets with the objective of building a connect with the end consumers and enabling visibility across the value chain.
Today’s CEO needs to ensure their business is able to cope with the increased uncertainty and ambiguity caused by the pandemic that has amplified the need to create agile and resilient businesses in order to survive and thrive. While leaders cannot control the pace of change, they can develop their organization’s capacity to effectively navigate change and take advantage of new opportunities.
Digital initiatives across the value chain
Some of the recent trends across the value chain are highlighted below:
New business models: Evolving consumer behavior and requirements is compelling firms to devise new strategies and models to cater to the risingneed for personalization and convenience. The Deloitte State of the Consumer tracker shows that over 70% of consumers would prefer to pay more for convenience. E-commerce and omnichannel models allow brands to directly engage with their customers and provide inputs to companies on emerging trends. These direct to customer (D2C)approaches also create opportunities for brands to increase customer reach, sales, and margins while incurring minimum cash outflows.
Automated decision making: In Deloitte’s global automation survey 2020, 73% of executives said that they were pursuing intelligent automation for their business, up from 58% in 2019. As leaders become comfortable with the new technologies, business can start to leverage additional artificial intelligence/ machine learning capabilities to extract insights from existing digital systems like CRM (customer relation management), BI (business intelligence) platforms, etc. to detect early signs of change and proactively design strategies to thrive.
Rise of remote sales: Lockdowns and the need for social distancing brought new challenges for organizations. Employees could no longer directly interact with customers or even with each other. Digital solutions including the implementation of tech infrastructure allowing employees to collaborate from remote locations, and interact with customers through chat portals, have provided companies a reason to rethink returning to traditional ways of doing business. Companies that can become digitally mature will be more agile to business threats, save on office costs, and provide customers and employees a more responsive experience.
Adoption of digital payment solutions: Firms in India had started adopting digital payment options prior to COVID-19. However, the pandemic accelerated rollouts and adoption rates for digital payment methods. Retailers reacted to these changes by providing more support for contactless payments, via UPI (unified payments interface) access points and wider digital wallets acceptance. In line with this, we also observed that some banks and financial institutes launched in-house digital wallet services. Payment service providers started expanding their reach across India via greater integrations with technologies like wearables and near field communications (NFC) payment modes.
Supply chain enhancements: Logistics and supply chain were critically impacted by COVID-19 lockdowns. Companies in India faced issues with procurement from other geographies, raw material shortages, and demand shifts. The impact of the pandemic created an opportunity for FMCG (fast moving consumer goods) companies to utilize hyperlocal delivery models and last mile delivery in order to ease their distribution challenges. Digital technologies like internet of things (IoT), AI, etc. helped companies bring in visibility and traceability within operations.
Building a future-ready organization leveraging digital technologies
Traditional business models are witnessing a decline in relevance and effectiveness across most of the industries. They are gradually being replaced by new-age digital business models. While digital native brands were frontrunners for leveraging digital technologies, the pandemic has re-emphasized the need for traditional companies to re-evaluate how their businesses function.
Critical components for building a future-proof organization equipped for handling market disruptions include:
- Digital-first approach: A digital approach works on the fundamental principle of digitization and automation. The objective of the organization should be to digitize all business functions including sales, operations and people management.
- Build mutually beneficial partnerships: The traditional model of partnerships will not work in a future where organizations undergo continuous and multidimensional transformations. Organizations need to build a new partnership model focused on leveraging individual strengths to deliver greater value. For example, FMCG companies now also need to partner with channel partners, service providers, SaaS (software as-a-service) partners, etc. to build innovative and differentiated solutions to win in the market.
- Harness the power of data to cater to evolving customer and market needs: Data is the new fuel driving the growth story. Companies that have been able to successfully leverage data and insights, have been able to successfully predict and proactively respond to evolving customer and market needs.
The future ready organization
During the pandemic, we saw companies constantly innovating and adding new technologies to their stack, whilst simultaneously reducing their operating costs and improving productivity through new disruptive models. With the tools available, leaders are able to pivot more quickly to serve their customer base and learn more about their changing needs. The pandemic forced firms to re-evaluate and realign their priorities towards flexibility, adaptability and sustainability. A reactive approach to recognizing market changes will be inappropriate, businesses should take this opportunity to transform and get ahead of the trend.
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