Post Pandemic- The Era of Digital Acceleration
It is no secret that businesses must continuously put in the work to stay secure, robust, and agile in line with changing times. And while this is not an entirely new concept, the Covid-19 pandemic has emphasized the importance of meeting these standards like never before. The challenges faced in business in 2020 and early 2021 have made one thing very clear- to operate effectively amidst a crisis, companies must always be ready to embrace flexibility and change on a major scale.
The past two years have seen organizations scramble to shift to remote working, streamline workflow and reshape their business according to entirely new models. This has brought about a wave of digital acceleration, with more and more organizations investing in comprehensive digital acceleration processes.
But what does digital acceleration really mean? How does it differ from digital transformation, and why should businesses embrace it? In this article, we explore these questions and more.
What Is Digital Acceleration?
In the past decades, technology has become an instrumental part of every aspect of our lives, influencing how we live and interact in society and especially how we engage in business. The digital revolution is showing no sign of stopping any time soon, and advancements in technology are more rapid than they have ever been before. For a majority of businesses in the USA, the pandemic has brought about an acceleration in digital transformation by months, if not years. This phenomenon in business is technically referred to as digital acceleration.
According to Forbes, Digital Acceleration is “the process through which companies embrace technologies to digitize their operations and reshape their workflow to keep pace with the current demands.” Simply put, digital acceleration is about leveraging technology to remodel and improve your business on a major scale. While digital acceleration is often overlapped with digital transformation, there is a crucial difference between the two.
Digital acceleration puts a greater emphasis on the speed of digital transformation, but it’s also a little more than that. Digital acceleration also focuses on updating business core practices and procedures, but with a data-driven approach and at a much faster pace. While digital transformation is about digitalizing a particular aspect or procedure one at a time, digital acceleration is an ongoing process. Embracing digital acceleration in business is not about traveling from point A to point B- it requires companies to focus on long-term goals and prepare for constant evolution and change. Digital acceleration has a never-ending nature, and understanding this nature is crucial to its successful payoff for an organization.
How Digital Acceleration Impacts the Business World
According to a KPMG report, 67% of CEOs expressed hesitation about shifting all businesses to the cloud at the beginning of the year. In the aftermath of the pandemic, however, this concern has significantly decreased. While companies had to cut down budgeting in nearly every business sector, investments in digital acceleration actually grew during the pandemic. The KMPG ‘Going Digital Faster’ report details that spending on digital acceleration grew 10.4% in 2020, amounting to $1.3 trillion by the end of the year.
This rise in spending can mainly be accounted to necessity. Businesses had to make a choice between going digital or going home and were forced to either sustain their digital investments or increase them to stay afloat amongst the chaos. The KMPG report also explains this in 3 key findings:
- 69% of respondents say their digital transformation strategy was a high priority before the pandemic.
- 67% say they’ve accelerated their digital transformation strategy since COVID-19.
- 63% say they’ve increased their digital transformation budget since COVID-19.
Necessity is not the only factor that plays into the growing popularity of digital acceleration in business. Digital acceleration also encourages a ‘start small,’ step-by-step policy to embrace digitalization. While digital transformation encourages a top-to-bottom IT overhaul, digital acceleration is about focusing on small victories, enjoying advantages from day to one, and putting in constant work to evolve instead of setting up fixed destinations.
Digital acceleration offers a more realistic approach to automation and digitalization. It allows organizations to shed the fantasies of a top-notch, fully automated system that they can currently not afford to adopt and allows them to celebrate smaller wins and reap the benefits of digital acceleration at the same time. It is an ongoing process that requires consistent work, but you can immediately feel the effects of the small changes you introduce within your company. Minor tech improvements made as part of a more significant process will also enable you to have an agile mentality, which is key to digital acceleration.
According to McKinsey’s 2020 Survey, companies that invested in digital acceleration during the pandemic have enhanced their systems to an extent that would’ve taken ten years to achieve prior to the pandemic. Numbers show that companies leaped forward at least seven years on average, with some hitting the ten-year mark. It’s evident that Covid-19 has transformed the business world and spurred digital acceleration to an extent that has never been witnessed before, and these transformations will likely be here for the long haul.
Key Benefits & Challenges
As with any other practice, digital acceleration comes with its own set of advantages and potential pitfalls. Some of the key benefits of embracing digital acceleration include:
- Digital acceleration allows for greater adaptability. With newer trends and the latest technologies, the business ecosystem and consumer behavior are ever-changing, and Covid-19 is not the last drastic crisis the business world will face. While emergencies are inevitable, digital acceleration can equip companies with the resources they need to adapt and evolve during periods of transformation or uncertainty.
- Digital acceleration empowers businesses to work towards greater innovation. It provides access to newer methodologies and systems and helps identify potential opportunities and ways the business can adapt and improve. Companies that embrace digital acceleration and innovate can offer their customers an extra something their competitors cannot.
- One of the biggest advantages is improved profitability. According to the McKinsey survey, companies that underwent a digital transformation process enjoyed economic gains ranging from 20% to 50%. Digital acceleration helps automate processes that increase functioning, allowing the business to be more productive and thus bring in more revenue.
- Digital acceleration allows for improved, informed decision-making. Businesses use available data to make crucial decisions and plans for the future, and if this data is disorganized, incomplete, or erroneous, it can severely impact the business’s future performance. Digital acceleration helps counter this problem by integrating information and automating data collecting and analyzing procedures. It helps remove bias and errors from the collection processes and makes it easier to assess changes, generate reports, and identify new opportunities and services.
- Digital acceleration is crucial for improved agility. Today’s markets are hardly stagnant and stable, and businesses need resources and quick action to quickly and effectively pivot with changing demands. Digital acceleration is instrumental in allowing companies to make those fast-paced changes and tackle newer problems and challenges.
- Digital acceleration allows businesses to offer a better user experience. Organizations can use technology to make the user experience seamless and interactive. They can also employ data collection technology to gain valuable insight into consumer behavior, which can then be used to appeal to more diverse, broader audiences. The McKinsey report finds that a digital acceleration process can generate a 20% to 30% increase in customer satisfaction. It helps businesses build long-term, meaningful relationships with customers and ultimately retain a loyal customer base.
While companies are consistently striving to embrace organizational-wide digital acceleration to reap these benefits, many executives are concerned about the inherent speed of the process. Many organizations find it challenging to keep up with the pace of digital acceleration. They are unable to meet the needs of the process, and thus their digital acceleration efforts fail by a long shot. According to McKinsey, 70% of digital accelerations efforts fail due to resistance from employees. Furthermore, only 16% of employees find their organization’s digital acceleration efforts long-term and sustainable.
But why does digital acceleration pose such a massive challenge? A significant issue arrives with how fast-paced the change is and how much the competition is rising every day. While Agile-oriented companies are kicking up a storm and completely revolutionizing business by implementing newer technologies as fast as possible, traditional companies are struggling to adapt themselves digitally. This fast-paced change can put tremendous pressure on business proceedings and the overall structure of traditional companies, from customers and stakeholders to operations and beyond.
Some of the challenges and concerns with digital acceleration include:
- Employee resistance or improper organizational culture can slow down your digital efforts considerably. Most organizations believe that digital acceleration is possible if they simply update their tools and technologies and automate every process. However, digital acceleration is not about technology alone. It is about slowly introducing change and development into your organization after thoroughly assessing whether your business is ready for such large-scale change. Building the proper organizational culture while implementing a robust digital acceleration technology takes time, consistency, and dedication, which is why many organizations fall behind.
- Lack of IT resources and poor resource management can derail your digital acceleration efforts. A Digital Mastery Report by Capgemini found that 77% of companies consider missing digital skills as the main hurdle to their digital acceleration. The shortage of a digital workforce and improper resource management are major concerns that each organization must address when designing a digital acceleration strategy.
- Digital security is obviously a major concern. With cyber threats and attacks at an all-time high during the pandemic, it’s easy to see why 64% of CEOs rated security as their top priority in their digital acceleration objectives. Furthermore, 55% of companies cited security as the topmost challenge they faced when implementing digital acceleration technologies, according to SoftServe. Successfully integrating digital acceleration technologies requires organizations to transform and strengthen their security approach, which can be complicated, costly, and fast-changing.
These challenges can be severe blocks to any company’s digital acceleration efforts and, when ignored, can morph into larger issues that can threaten the company’s success. If an organization is adapting digital acceleration on a major scale, they must tackle these issues individually early on so they don’t become greater hindrances later on.
Planning For the Future
Digital acceleration is part of the post-pandemic new normal, and the sooner businesses adopt it, the better. While businesses of all sizes and sectors have been embarking on digital transformation processes for some time now, this adaption has been very slow and careful, with many business owners showing concern over the long-term effect of these changes. However, with the pandemic, most business owners saw the value of putting aside their worries and accelerating their technology adoption processes. For example, the Digital Mastery Report found that 67% of organizations today said they actively promote the exploration of new technology and ideas, compared to only 35% in 2018.
This in no way means that businesses should ignore the challenges that come with digital acceleration. It simply means that they should go ahead with their plans while addressing said challenges and adopting the best practices, so they don’t fall behind their competition. Mitigating these challenges can be difficult, so organizations must strategize and budget carefully, hire external resources, and outsource some responsibility if they feel the work is too much to handle alone.
Outsourcing To Bridge Skills Gap
Digital acceleration is tough; there is no denying that. But the main takeaway from this article is that despite being slow and laborious, it is gratifying and very worth it.
If your organization is just exploring newer technologies and is at the early stages of its digital acceleration journey, you should consider outsourcing to help you get the job done. Outsourcing is an efficient and cost-effective approach that will give you a great return on your investment in the long run. Looking for talent outside your company can help you bridge the skills gap and tackle digital acceleration challenges with extra help on your side.
Speaking of outsourcing – are you searching for a trustworthy company to handle your digital needs? Mpire Solutions can help! Call us at (617) 804-0539 for a free consultation now!
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