Digital transformation could be accelerated by COVID-19

The technology industry abounds with buzzwords and phrases, with digital transformation being one such term that many companies aspire to undertake; but when faced with reality it can be difficult to implement while conducting business as usual. There are, however, impressive examples where companies have changed course and transformed their businesses by integrating digital technology to fundamentally change how they operate and how they deliver value to customers.

Microsoft is a case in point. Under the leadership of Satya Nadella, the stock price – which had flatlined for nearly a decade – has tripled. Creating a collaborative working environment and focusing on the future and innovation, Nadella changed Microsoft’s fortunes from a '90s technology company delivering similar products, to once more becoming a leading-edge organization delivering visionary products. Changing the culture of a company with over 120,000 employees at the time he took charge was no mean feat.

Transforming a business in this way is not simple and takes a tremendous amount of courage and visionary leadership. The core elements include: migrating from on-premises systems to hybrid clouds, modernizing financial and operational software, improving the customer experience using technology, and creating a more dynamic and flexible working environment. In response to ‘work from home’ and other lockdown measures due to the COVID-19 pandemic, many businesses have adopted some of these elements, using technology out of necessity; this departure from normal business may be the first significant step on the path to digital transformation.

When governments decide to end their lockdowns, will these businesses embrace the opportunity and continue digital transformation, or revert to the previous way of conducting business?

Enter cybersecurity

Digital transformation brings about additional considerations for cybersecurity and I recently delivered a presentation, virtually, at Segurinfo in Argentina on both the need to grasp the opportunity to transform and to do it with security in mind. Businesses all over the world have adapted their workforces during the current pandemic by embracing technology to provide connectivity to data and networks, videoconferencing, collaboration tools and cloud services. Prior to the lockdown, 16% of Argentinian workers infrequently worked from home – with under 3% doing so permanently, according to data from iProUP. In comparison, the numbers for the USA are 43% and 3.6%, respectively. While the proportion permanently working from home is similar, the ability of the general workforce to be flexible is clearly apparent and demonstrates that digital transformation has evolved further in the USA than in Argentina.

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While allowing the workforce to be flexible is only a small part of digital transformation, it carries with it the need to ensure that services are implemented securely. Devices need to be protected from many types of risks, including theft and interference; using full disk encryption, enabling strong multi-factor authentication, and using VPN technology to access data are just bare minimum considerations. Applications and tools to enable remote productivity need to be vetted and configured to protect customer data and sensitive company material, and employees need to be more aware of scams such as phishing and business email compromise, as these may be more exploitable among staff away from the workplace.

There are, of course, many more considerations to ensure that systems remain secure regardless of the location of the user. The rushed adaptation to relocate the workforce means that companies have expanded or implemented new systems to enable remote working and the ability to service customers remotely, without necessarily applying their normal considerations for security. The easy option, when all this is over, is to revert to the original scenario and talk fondly of the memories of the time we all needed to work from home. In reality, the decisions taken due to the pandemic have progressed the digital transformation of businesses all over the world, so rather than reverting to the previous status quo, perhaps they should embrace the changes of delivering services to customers and flexibility to the workforce.

Take an example of a small local business, a successful fitness studio providing group classes and personal training. The business was forced to cease in-person activities due to a ‘shelter in place’ order and needed to look for alternate methods of delivering services to customers to keep the business running. An entrepreneurial spirit quickly transformed the business from in-person to online classes for both one-to-one and group sessions. This also involved temporarily loaning and distributing equipment to customers so they could experience the same class as before, just in their home location.

Seizing the opportunity

What happens when there is a chance to switch back to in-person classes and for the equipment to be returned to the studio? It’s at this precise point where the opportunity exists – why revert to the previous method of doing business? The easy solution is to do business just as before the ‘shelter in place’ order; however, there is a tipping-point opportunity to deliver a mix of online and in-person classes and training. This also has the benefit that when customers travel or cannot attend a training session in person, it can be offered to them online – even asynchronously – so they never miss a week regardless of their schedules. The temporary solutions implemented to deliver online classes will need to be formalized for more scalable and robust systems.

The issue of equipment return could create an entirely new business opportunity to rent the equipment to the customer, who retains it for the duration of the online class. The business will need new systems to manage equipment leasing, which may involve credit scoring and long-term subscription payments. Examples of companies that have successfully transformed their businesses often have a common offering – subscription – this enables businesses to predict their revenue and to make longer-term decisions on investments.

The situation caused by the pandemic has forced short-term adaptation but should be viewed as a step, or leap, towards digital transformation, offering more flexibility to customers and employees and potentially opening new revenue opportunities.