In business, the distinction between fast and slow responders can be subtle. For example, just small differences in key behaviors made a big difference when it came to nimbly reacting to the once-in-a-century global health crisis. We highlighted this finding in our last blog post on the "Organizational Agility: The Roadmap to Digital Acceleration" report.
After further analysis and conversations with our customers and leaders across business and academia, one thing is very clear: Digital transformation has become digital acceleration. Or, as our CTO Jim Stratton recently wrote: “When we look back on 2020, we’ll likely regard it as the year that digital transformation reached escape velocity . . . Technology evaluations and implementations that previously took months or years to complete were compressed down to weeks, if not days, in many cases.”
Because digital acceleration is the new business imperative, we’re sharing a key section of our global study and report based on 1,024 respondents (the C-suite and their direct reports), as well as 15 qualitative interviews, below.
There is now no doubt about it: Digital transformation is critical for business survival. Against 2020’s backdrop of economic, geopolitical, and social uncertainty, 36% of firms now expect that three-quarters or more of their revenue will come from digital within three years. This revenue expectation has tripled between June 2019 and July 2020.
While the path to recovery is anticipated to be a long one, the executives we surveyed are already reflecting on how to protect their firms from future crises. One-third (32%) say that accelerating digital growth—whether by increasing digital revenue streams or advancing digital transformation—is the number one change that will improve their organization’s resilience in the event of a future crisis. This is followed closely by increased investment in technology to augment the workforce (30%) and investment in cloud technology (27%).
Our research also points to a link between the use of smart technologies, such as artificial intelligence (AI), machine learning (ML), and robotic process automation (RPA), and the growth of digital revenue streams. The 64% of organizations that report some progress deploying smart technologies are twice as likely to derive 50% or more of their revenue from digital than those that have yet to commence deployment.
But, as one of the experts in the qualitative portion of our study warned, technology can’t always fix underlying problems. “Robotic process automation is becoming popular. To me that’s quite scary because it’s going to string together old legacy platforms to make organizations think they have sped up,” says agile expert, business coach, and author Fin Goulding, “when they are simply pushing digital transformation down the road by a couple of years. That could prove dangerous. The core platform is the issue—not the fact that you can do it faster now—and that’s really what needs addressing.”
One thing is very clear: Digital transformation has become digital acceleration.
As organizations flex in a bid to future-proof their revenue streams, operations, and people throughout the COVID-19 pandemic and beyond, our research illustrates the importance of accelerating digital transformation.
We asked firms whether they were equipped to respond to the COVID-19 pandemic at speed and scale. Proving that necessity is the mother of (re)invention, a large majority (73%) say they were equipped to respond fast when the pandemic hit. Throughout this report, we call these businesses the “fast responders.” We call the remaining firms, which say they were slow to respond to the pandemic at speed and scale, the “slow responders.” This report shows that these fast responders reveal higher levels of progress in all areas of agility covered by our 2020 study—as well as higher digital revenue growth.
What do these responses to the pandemic mean in practice? For some, it has vindicated their efforts to become more agile. “Our organization was absolutely ready, which was the first big benefit of being agile at this point in time: to be up and running at full throttle working from home,” says Michele Ungaro, chief development officer at global professional services firm Aon.
For others, the pandemic has reinforced the need to execute on their digital transformation plans faster than they had anticipated, echoing the survey result around digital acceleration. “We were already in the works to go completely digital, but we had to shift and make different decisions based on what COVID looks like moving forward,” says the regional vice president of operations at one multinational hospitality group. “We are moving faster, and that’s where our efforts are focused—on making a digital world across our hotels a reality sooner rather than later.”
Our research shows that this hospitality group is not alone: In 2020, it’s clear that businesses need to be moving at speed. More than three-quarters of respondents (77%) say that their firm is fast to act when technology investments fail to meet expectations, up from 70% in 2019. And 60% say that their organization has removed bureaucratic processes that slow decision-making, up from 53% in 2019.
And for others still, there’s nothing like shared adversity to strengthen the lines of communication. Paul Wright, CIO at Accuride, says, “If we can stay better connected with our customers, if we can respond better to their needs, if we can stay connected with our suppliers and maintain our relationships with them in really difficult times, then that should give us a competitive advantage in the future.”
But for many firms, there is still a way to go. Read the rest of the report (available for download here) to learn how firms are unlocking organizational agility at scale, the stumbling blocks that are hampering progress for many, and where opportunities lie for future growth.