C-suite executives say COVID-19 has accelerated their digital plans by as much as a decade in a matter of months, according to a poll by McKinsey & Company.
The digitisation of an organisation’s offerings accelerated by seven years on average around the world because of COVID-19 and subsequent restrictions, according to a poll of nearly 900 C-suite executives conducted in July by McKinsey & Company.
The consultancy firm released the results this week, showing a dramatic acceleration in the digitisation of products and services as well as core internal operations like back office, production and R&D.
The business leaders report the pandemic effectively removed the main barrier to their digital transformations — business priorities — because BAU was no longer viable.
The largest leap in digitisation is the share of offerings that are digital in nature, now at 55 per cent on average globally. Before the pandemic the share was only 35 per cent, according to McKinsey.
In the APAC region, executives say the change equates to an acceleration of more than ten years in just over six months.
Global customer interactions are also now predominantly digital, climbing from 36 per cent to 58 per cent since December.
The consultants note, however, that the acceleration of digitisation is very much tied to industries and products. For example, executives from consumer packaged good businesses and automotive industries report relatively low levels of digitisation compared to industries like financial services, healthcare and professional services.
Overall the speed of change is “remarkable”, McKinsey says, with the pandemic forcing organisations to move up to 25 times faster than planned. Nowhere is the speed of change greater than in the switch to remote work.
Executives report the mass migration of workers to home would normally be expected to take well over a year. COVID-19 forced them to do it in less than 11 days.
Being able to respond to customers’ new level of demand for digital products and services would normally have taken over 18 months, executives say. They did it in three weeks on average.
“When respondents were asked why their organisations didn’t implement these changes before the crisis, just over half say that they weren’t a top business priority,” the McKinsey authors write. “The crisis removed this barrier: only 14 percent of all respondents say a lack of leadership alignment hindered the actual implementation of these changes.”
Asked whether the increased digitisation would be lasting, respondents overwhelmingly reported it would be — especially for changing customer expectations and remote working arrangements.
Now that organisations have been effectively forced to accelerate transformations with increased investment in Cloud technologies and data security, many need a long-term pay off, McKinsey says.
“Now that the investments have been made, these companies have permanently removed some of the pre-crisis bottlenecks to virtual interactions. Majorities of respondents expect that such technology-related changes, along with remote work and customer interactions, will continue in the future.
“Nearly one-quarter of respondents also report a decrease in their physical footprints.”