Digital transformation existed long before the pandemic, but Covid has irrevocably changed the landscape—and sped up the adoption of new technologies. McKinsey estimates that the pandemic accelerated companies’ adoption of digital or digitally enabled products by seven years.
Has your company kept up with the pace of innovation? And what are the costs of failing to do so? Below, we’ll go over how Covid and a hybrid workforce have affected digital transformation around the world and how you can give your organization a competitive edge.
7 Ways the Pandemic Changed Digital Transformation
1. The pandemic proved that remote work was always possible.
Before a virus started its global spread, many employers saw remote work as unnecessary, or even detrimental, to the performance and impact of their employees. Remote work was not the norm pre-pandemic. But now, working remotely at least part of the time is commonplace. A 2022 Pew Research Center study found that 57% of U.S. adults working remotely rarely or never worked from home before Covid.
The pandemic proved that employers’ excuse that remote work was “unproductive” was simply that—an excuse. In many cases, working from home during the pandemic led to an increase in productivity. Great Place to Work conducted a two-year study of more than 800,000 employees. They then measured employee productivity from March 2020 to August 2020 and compared it to the same period in 2019. They concluded that across those months, productivity either remained the same or increased.
Even jobs previously thought incompatible with remote work found a way. Therapists, nurses, and physicians alike took advantage of telehealth sessions, allowing them to diagnose and even treat without ever stepping foot in the same room as the patient.
As grueling and unwanted as the pandemic was, it forced a shift to remote-friendly work environments that employees had long pined for.
2. The pandemic expedited much-needed digital transformation across industries.
Organizations across industries and the world were forced to question what they previously thought was possible with technology. And in many cases, these innovations left everyone wondering, “Why didn’t we do this before?”
In health care, for example, it is now common practice to provide an online portal for patients to fill out paperwork before arriving at their appointment, saving time and paper and preventing unnecessary exposure to pathogens.
And at the DMV, car registration renewals—once infamous for long lines and atrocious wait times—are now as simple as entering your license plate number into a self-service kiosk, which then prints your renewal sticker for you.
The added convenience and safety of the tech advancements spurred by the pandemic have revealed that these things were always possible—businesses just needed a catalyst to make them happen.
3. The pandemic necessitated a shift to a workplace culture that’s more conducive to digital transformation.
When governments swiftly implemented lockdowns to slow the spread of Covid, organizations were left scrambling to transition their workforces and technologies to a work-from-home model. Workplaces that had previously been more formal and rigid faced an ultimatum of sorts: Adapt to the “new normal” of employees attending work via Zoom in a crowded house with their kids playing in the background, or stick to their old ways and risk unhappy workers and a business model that would fail in this new world order.
As such, employers were forced to develop a culture that created a psychologically safe place to try something new without fear of failure. Interestingly enough, this is exactly the kind of culture where digital transformation succeeds.
An October 2020 McKinsey report found that organizations that performed well during the pandemic used cutting-edge technologies. Further, “a related imperative for success is having a culture that encourages experimentation and acting early.”
What’s more, the transition to the hybrid work model, too, is driving culture change that’s conducive to digital transformation. As management consultant Geoffrey Moore tells technology journalist Peter Burrows, “Embracing the hybrid model is forcing companies to adopt a collaboration culture.” When you’ve got employees split between remote and in-person and spread across the world, establishing the digital tools to collaborate effectively becomes crucial.
Where experimentation and collaboration thrive, so too can digital transformation. Why? Because you no longer have a workforce that is largely resistant to the technological changes that will have to happen. They’ll be onboard and will embrace it, making the transformation flow smoothly.
4. Consumers are now more familiar with tech—and expect the best.
We’re now living in a world where much of the population spent most of 2020 and much of 2021 in isolation, doing many things only virtually. That means that people of all ages are more familiar with tech than ever before—from ordering groceries online to attending a doctor’s appointment via video chat. Those new behaviors are likely here to stay.
In fact, according to the EY US Consumer Index 8 report from November 2021, 54% of consumers say “new behaviors adopted during the pandemic feel normal now” and 45% “don’t want to go back to living exactly like before the pandemic.”
“What this points to is that consumers are more adaptable than we think,” Kathy Gramling writes in the EY report. “They can adjust quickly to short-term impacts, but those impacts can also leave a lasting impression, turning what may not have mattered before into a top priority that companies are required to now address.”
One of the biggest pain points the EY report highlights is supply chain issues: Consumers are sick of not being able to buy things on time because a company doesn’t have them in stock. One of EY’s recommendations is that companies employ digital technology that gives real-time insights into inventory.
With these changing consumer expectations, companies must be quick to adopt technology that can improve the customer experience. In a 2021 research paper entitled “Impact of Digitalization on Customers’ Well-Being in the Pandemic Period,” the authors write, “In the pandemic context, retailers need to respond quickly and innovatively to new customer needs with the help of new technologies, such as artificial intelligence and IoT.”
For customer service call centers, for example, the fix could be something as simple as implementing an AI-powered noise-cancelling app so agents can better hear callers and vice versa.
5. More than ever before, employees want technology that makes work easier.
The fast rate of new tech adoption means that workers are well-versed in digital tools, but instead of the latest shiny object—they want only the best (the tools that make work easier). A 2022 Microsoft special report found that 46% of frontline workers say that employing technology that makes their job easier would reduce their stress. And 63% feel excited about the job opportunities tech brings.
Further, about half of Gen Z and Millennials say they “envision doing some of their work in the metaverse in the next two years,” according to the Microsoft Work Trend Index 2022.
And employers would do well to heed these new employee expectations. Seventy-one percent of business leaders believe that employees will look for jobs elsewhere if their current employer doesn’t provide them with the technology they need to do their jobs, according to the 2022 Freshworks State of Workplace Technology.
So what new tech tools can make employees’ lives easier? More than ever before, workers are reaping the benefits of artificial intelligence to enhance their jobs, including technology like noise-cancelling apps to improve virtual meeting quality and productivity.
Leading AI researchers developed Krisp, an app that uses the power of deep neural networks to pinpoint and remove distracting background noise on both ends of a call in real-time. Equipping teams with this cutting-edge technology means that whether their work is in a call center, an office, or their living room, they can have more productive and stress-free meetings.
6. This faster pace of digital transformation comes at a time when society is at its highest level of tech fatigue and consumer distrust.
Digital innovation during the pandemic presented a double-edged sword: At the time digital transformation is increasing, so too is the level of tech fatigue and consumer distrust.
Deloitte reports that one-third of consumers feel overwhelmed by tech during the pandemic. Microsoft data shows a “252% increase in weekly time spent in meetings for the average Teams user since February 2020″ and a 32% “increase in chats sent per person since March 2020.” And if that weren’t enough, the 2022 Freshworks State of Workplace Technology reports that 91% of employees are frustrated with inadequate workplace tech.
Google’s announcement that it’s doing away with third-party cookies in Chrome follows on the heels of consumers being less willing to share data—presenting a huge challenge to companies that rely on third-party data to target customers. In the 2022 GroupM annual consumer attitudes survey, 77% of participants “strongly or somewhat agree with the statement ‘I worry about how companies use my personal data online.’” That’s up from the previous year’s survey.
7. It also comes at a time when employees are at their highest level of burnout.
To complicate matters further, employees are experiencing burnout at a higher rate than before. The American Psychological Association reports “heightened rates of burnout in 2021.” Its 2021 Work and Well-being Survey found that 79% of employees felt work stress in the month before being surveyed.
A 2022 Deloitte survey of 5,000 women in 10 countries found a burnout epidemic in working women, the same demographic in which, a year earlier, 80% said their workloads had gone up since the start of the pandemic.
Clearly, the workforce is heading down a path of chronic stress, and it’s up to employers to use their digital transformation efforts to ease that stress—not make it worse. This will require listening to employee feedback and acting on it by implementing a real digital strategy that aims to serve employees, not just the company.
Covid Kickstarted a New Era of Digital Transformation: Will Companies Keep Momentum Going?
There’s no doubt about it—Covid necessitated a drastic change in the way employers do business. An overarching theme is that what many believed would be short-term fixes for the pandemic have had long-lasting effects.
Consumers and workers alike have realized the convenience and improvement technology provides, but they’re also frustrated and fatigued by outdated tech. It’s up to organizations to retain what is good about these changes and continue to drive digital transformation forward.