The Digital Inflection Point
While the pandemic continues to impact organizations across Canada, at IDC we're seeing emerging interest from tech vendors in helping businesses on the road to recovery. However, many organizations are facing a difficult uphill climb exacerbated by the shortfall in digital technology investments made prior to the pandemic.
Pre-COVID in Canada, only 1 in 3 enterprises were progressing along the maturity path to what we call "Digitally Determined". These organizations have integrated digital technologies and advanced processes into the enterprise and have continuous innovation programs, with the most advanced using digital tech to truly transform markets. The remaining two-thirds are what IDC calls "Digitally Distraught". They may have had some tactical or line of business processes that were digitally enabled, e.g., a narrow function mobile app, but they were not long term focused or tied to an enterprise-wide strategy.
When the pandemic was declared in March and lockdowns were mandated, it became an inflection point for digital. Health and safety became the top priority, which had cascading effects across organizations of every type. In many sectors the "workplace" was redefined. The importance of reliable networks rose as collaboration technologies were quickly implemented to support remote workers. Ecommerce capabilities became vital as shopping rapidly shifted online. Cybersecurity tech became critical as end-points proliferated beyond the walls of the enterprise and security incidents escalated. Cloud became the default model for quickly rolling out new applications and services. And 82% of medium-large organizations told us they were adjusting their technology roadmaps.
We all tried to adjust to the new world of work. Many organizations struggled to adapt.
Sure, we can look back and say Canadian enterprises should have already being doing more to digitally transform. In fact at IDC, we've been saying that since 2016. But that's not helpful now. It's time to provide guidance about the road to recovery.
The 5 Stages to Enterprise Recovery
IDC has developed a 5-stage model of the road to recovery. It provides useful guidance to business and IT leaders a way to look ahead and refine their approach to thrive in the digital economy post-pandemic.
- Stage 1: COVID-19 Crisis – Business Priority: Business Continuity
- Stage 2: Economic Slowdown – Business Priority: Cost Optimization
- Stage 3: Recession – Business Priority: Business Resiliency
- Stage 4: Return to Growth – Business Priority: Targeted Investments
- Stage 5: The Next Normal – Business Priority: The Future Enterprise
There are plenty of resources from my worldwide colleagues that help explain the 5-stage model in more detail, including a new IDC eBook, that I encourage you to explore. But I do want to highlight a few key points here for Canadian tech suppliers.
Guidance for Canadian Tech Suppliers
First, being empathetic and recognizing that the health and well being of people should still be the top priority, especially as COVID-19 spreads globally and new cases are still popping up every day in Canada.
Second, understanding where your customers are on the road to recovery is critical to being relevant. For example, trying to sell a large complex transformation project that is resource intensive and disruptive to core operations is very likely going to be met with client resistance during crisis mode. Buyer needs will evolve, often very quickly, as economic conditions change – and this has implications for technology requirements.
Third, help those organizations who are struggling to adapt by sharing best practices and highlighting examples of success. We can point to organizations of all sizes in both private and public sectors in Canada that have done really innovative things to respond to the pandemic:
- Kanetix created a virtual contact centre and successfully transition 250 agents to work from home.
- Loblaws' PC Express online grocery volumes are 3x the average, hitting levels they didn't expect for many years.
- The Newfoundland and Labrador Centre for Health Information (NLCHI) moved nearly 4,000 healthcare workers to a virtual desktop environment within five days.
- Dresst, a subscription clothing rental company (yes that's a thing), saw its revenue triple after the tightest lockdowns were lifted in April.
Fourth, until the virus is eradicated and/or a vaccine is widely available, we should expect waves of new COVID-19 infections and lockdowns. For many businesses this means they could fall back to an earlier stage, i.e., to recession, slow down or even crisis mode. Tech suppliers will have to adapt as well in order to meet customers' needs at the corresponding stage.
Finally, as difficult it has been for many organizations, the pandemic has shown the value of technology to many stakeholders. A recent IDC Canada survey revealed that "a higher perception of digital transformation and IT among employees" was the 3rd most frequently mentioned positive take-away for organizations as a result of the crisis. This shows promise for closing the digital divide in Canada. A key ingredient will be tech suppliers' ability to show the way and meet the rapidly shifting demands of enterprises along the road to recovery, something that I will explore in our next blog post.
Explore the 5 Stages of Enterprise Recovery
Learn how enterprises can co-innovate with tech suppliers on their journey from crisis to recovery; our new eBook explores the 5 stages to enterprise recovery. Get the eBook here.