However, indecision over implementing new technology to replace inefficient manual processes can be costly to a business in the long run. Here’s why digital transformation during COVID is not only possible, it’s actually essential for many businesses… and why now is perhaps the best time for such changes. COVID should not be a blocker, it should be a stimulus for change.
The blockers to digital transformation during COVID
Even without the challenges of a global pandemic, many companies have looked at digital transformation as an “ideal world” solution. It’s something that they always claim they want to get started on but find repeated excuses to avoid.
Here are some reasons why companies fear transformation:
- When IT systems were built as monoliths, it used to cost a lot of time, money, and resources to introduce innovative solutions
- Most applications had to be built from scratch in the past, which involved huge IT teams and continued development
- People within the business were used to the old ways and resilient to change. Many feared that digital transformation would endanger their jobs.
This last point is particularly true in sales, which is why so many B2B companies don’t have marketplaces for distributors and end clients. It’s also true in production, construction, and other such industries. In fact, digital transformation is often more difficult in unionised industries when maintaining the status quo is in the best interests of much of the workforce. It is natural for people to fear that they will be replaced by computerized systems, so they act as a blocker.
Why digitization during COVID is preferable?
In spite of the old-school thinking and challenges outlined above, many businesses had started moving towards digital transformation but now find their budgets slashed due to the COVID crisis and the economic downturn. Money is rechanneled from innovation and modernization projects—which somehow fall into the “non-essential” category—and is redirected into keeping the business operating as normal.
However, for many companies, this is a mistake. In some cases, digital transformation during COVID should be treated as a top priority. It is also an opportunity for bold CTOs to push through stalled projects to move the business forward.
As businesses are struggling, they can no longer afford to maintain the status quo and need to challenge their long-accepted ways of doing things. The global crisis has forced a lot of businesses to be more open-minded. Even companies that were technophobic in the extreme are now looking for quick wins from technology.
How CTOs can push through digital transformation?
If you are a CTO or tech leader who has seen the need for digital transformation during COVID or before, here are the essential arguments to present to shareholders and board members to convince them to commit to that right now.
- We now use microservices, which means you don’t need to change the whole system at once. You can introduce applications one at a time and “strangle out” the monolith. This way, you don’t have to sell digital transformation to shareholders as one big project. It is, rather, a number of incremental steps, which cost less and can each bring an immediate return on investment.
- The rise of SaaS solutions means that there are ready-made solutions on the market for whatever your business needs. You don’t need to build expensive bespoke software from scratch; you can just look for the best existing third-party tool to plug into your business logic.
- SaaS solutions are also usually pay-as-you-go. If an application doesn’t work, you’ve only lost the price of the licence for a couple of months. Digital transformation is, therefore, not a financial burden. If it works, you keep it and reap the benefits; if it doesn’t, you jettison the cost and carry on as before or try another solution.
- Show shareholders how digital transformation doesn’t replace people, it empowers them. It gives them tools that make them more effective. In a time when workers are worrying about their jobs, the technology that once looked like a threat actually becomes their best insurance against losing their work—because businesses that make money from improved processes are less likely to make redundancies.
- Digital transformation levels the playing field. For big business, innovation and modernization no longer have to cost millions of dollars, because massive, complex systems can be replaced incrementally. For small businesses, buying applications with prices scaled to the number of users or licenses means they can afford to use the exact same SaaS technology as the big players. The entry bar is lowered for all types of business.
Now is the best time for some businesses to undergo changes
Businesses in most domains are struggling. There are only a few areas in which the current economic conditions are a positive factor. This means that companies are scrambling to find fast ways to cut internal process costs or unlock new revenue streams. Or both.
As mentioned, with microservices architecture and third-party SaaS solutions that offer an almost immediate start and potentially quick ROI—often without the need for dedicated, internal development teams—it is possible to take on these challenges.
Realistically, many businesses would have hesitated for years before committing to digital transformation, but desperate times actually focuses the thinking. Key stakeholders suddenly see that what once seemed a risk is actually the most sensible and prudent approach.
Digital transformation during COVID is made easier when businesses focus on what really brings value in their offerings, as well as where the money is wasted on processes. Some companies will find that none of their current offers are viable in the drastically changed landscape, and that is when they really need to look at how to innovate and pivot FAST. So, whether it is improving current offers or opening up new channels at speed, it will be empowered by digital transformation. Or, at least, it should be, because these are unusual times, which means that “business as usual” is not going to work anymore.
Read more about new technologies for business: Where should you invest in 2021?