It may seem hard to discuss recovery when battling to survive, but planning now will support faster revival and a more sustainable future.
COVID-19 has had a fast, unexpected, and material impact on the global economy. NTT DATA works with clients globally across all sectors, and we have observed the significant impact COVID-19 has had for all our clients irrespective of industry, geography, and structure.
This pandemic has challenged businesses beyond anything that could have been reasonably anticipated. Many have quickly realized that their operating models are inflexible, unscalable, and inefficient with significant location, IT, and people dependencies. Above all else, these models have been highlighted as expensive.
Businesses have responded to the pandemic in different ways to support and stabilize their operations:
- Workforce management: Almost all our clients have focused on workforce management, enabling their employees to work remotely in a secure manner. Clients with a significant office presence and culture have scrambled to create a new remote working model. They needed to establish or enhance their IT capacity, security, and collaboration to safeguard productivity.
- Innovative technology: In industries such as healthcare, we have seen authorities look to innovative technology partners to help them support the fight against COVID-19. By adopting and driving technology advancements, authorities can effectively allocate resources, support the public without human intervention, and better harness valuable data to manage the current situation and look for solutions to the pandemic.
- Cost containment and cash flow management: In hard-hit industries such as travel, logistics, and retail, we have seen an early and significant business focus to "keep the lights on," stopping anything non-essential to preserve cash and avoid unnecessary liabilities. The immediate impact and uncertainty of COVID-19 have resulted in businesses remaining in a state of shock, making it difficult for them to think beyond the immediate future. Empirically, flu shocks have all been 'V-shaped,' and although the geometry and intensity of the shock are unclear, a recovery trend could rapidly emerge.
As we have seen with past global economic crises (where some of 'today's most recognizable brand names were born), the post-COVID-19 era will likely generate new forms of business as organizations look to maintain and grow, based on evolving consumer market-drivers. The creation of these new business models will require the need to rapidly innovate & rewire IT to support new forms of business. Adapting to these market dynamics, CIOs must quickly move to create an innovation culture to deliver new capabilities and capture new market opportunities. The most successful organizations will be the ones that are already planning for recovery. There are three critical areas of focus that we see:
- Design for resilience: Mitigate risk in global uncertainty by building new IT models designed to be recovery ready:
a. Digital transformation including modernization to enable the "new normal" way of working
b. Flexible infrastructure, including Cloud
c. Extending the life of critical assets
- Remove location dependency: We have been forced to adapt to a world where the working location is irrelevant, where successful organizations will not only accept but embrace:
a. Best-shoring, no-shoring and multi-shoring models
b. Remote working — anywhere, any device, any time
- Redesign your business: It is unknown how far down the road to recovery you might be before the human workforce returns in full.
a. Automation: Maximize the efficiency of your human workforce and reduce disruption risk
b. Challenge the operating model: Cost bases need to be reviewed and ineffective models actioned; including consolidation, more global versus regional and a better balance between fixed and variable costs
c. Acceleration of initiatives that enable a more digitally native, flexible and agile future
NTT DATA Services has already started working with clients to shape their new future. Our global model and focus on innovative ways of working and automation can help you sculpt the new norm and create a competitive advantage for your organization.
Post Date: 6/8/2020