Enforced transformation will not slow down after the pandemic

According to a new global study by McKinsey&Company, the Covid-19 crisis enabled a change that would take years in all regions and industries within a few months. According to the results of the research, the speed of semi or full digital product and service development of companies increased by an average of 7 years. Companies informed that they are moving 20-25 times faster in 12 potential change areas determined by McKinsey.

Remote working, which is an important result of the pandemic, as well as changing customer needs with the pandemic and customers’ contactless service expectations were the prominent results of the research. Ultimately, as the research shows, companies that take fast and strong steps in these change requirements believe that these innovations will be permanent after the crisis. As the research shows, the needs developing in parallel with many factors, especially remote working, show that companies allocate the most resources to digital initiatives in this period. According to McKinsey research, more than half of the survey respondents report that they invest in technology both to gain competitive advantage and to redesign all their businesses on the axis of digital technologies. Within the scope of this strategy, companies that have achieved success during the pandemic period also give the information that they have ‘technology oriented’ capabilities that their competitors do not have thanks to their priorities such as trained workforce, investment in digital technologies before the crisis and testing new technologies during the crisis.

Cost related issues have changed

The Covid-19 process has changed the way every company does business in all sectors and as the McKinsey Global Executive Study shows, companies have further digitalized their relationships with their customers, supply chain structures, internal processes and innovations that can be implemented a few years later come to life much faster. So much so that, as the McKinsey study shows, many companies implemented their digitalization efforts much faster, under many different topics, which they thought would take a few years before the crisis. Many participants also informed that these changes will be long-lasting and that they will make different improvements in this regard. Factors such as an increase in costs or the number of people working in technology oriented tasks in the company are also in the background at this point. According to the study, technology competence will bring competitive advantages for companies.

Supply chains transform

During the pandemic period, customers quickly turned to online channels and almost all sectors and companies in these sectors responded by digitalizing. According to the research, although there are differences between regions, an average of 3-4 years of jump is very clearly experienced.

During the pandemic period, companies focused on developing their existing presentations on the digital axis rather than making big leaps in product development, despite the differences on a sectoral basis. When looking at the 12 basic changes asked in the research, the answers of the participants from different geographies and sectors are also clear. Accordingly, a significant increase in remote work, health and hygiene products, as well as customer preferences that allow remote interaction are at the forefront. According to the research participants who pointed out the importance of these areas, there is also an increase in the transition to cloud platforms. According to some participants, this crisis has been the cause of a radical transformation in supply chains. According to the research, the consensus is clear: This transformation brought about changes that will continue to exist after the crisis. So much so that it is not even possible to return to before March 2020.

Top 12 change of the pandemic!

– The change will be long lasting.

– Companies are experiencing specific changes.

– Changes in customer needs and expectations.

– Increase in remote working and collaboration.

– Increase in transferring assets to the cloud.

– Increase in customer demand for online purchasing and service access.

– Increase in expenses for data security.

– Increase in the use of advanced technologies in operations.

– Change in the causes of last minute problems in the supply chain in the industry.

– Increase in the use of advanced technologies in business decision making processes.

– Authorization of additional suppliers against potential problems in the supply chain.

– Increase in applications from nearby points, locations and/or within the company.

First steps of an immense change…

According to McKinsey’s global research, these changes, which have been realized in many titles with the pandemic, will be long-lasting and we should not expect a return to before March 2020. Many companies dedicate their investments to data security and a more intense transition to the cloud, in both business processes and customer interaction. In fact, according to the majority of research participants, such technology oriented changes will be ongoing work, including remote work and new ways of customer interaction. In the title of ‘12 pandemic induced changes’ that came to the fore in the study, remote working and an orientation to the cloud stand out.

As a result of the growing importance of alignment with overall corporate strategy and strong leadership, executives are also more likely to report large revenue growth than executives at other companies, among organizations that have tried new digital technologies with the pandemic and among those who spend more capital on digital technology than their peers. After all, it is a fact that those who report the biggest revenue growth in recent years also admit that they lag behind their peers in the use of digital technologies. Ultimately, respondents say technology capabilities stood out as key drivers of success during the crisis. The biggest differences between successful companies and others include a range of competencies, such as talent, use of the latest technologies. As McKinsey survey points out, technology adoption efforts or digital transformation have always been at the forefront. As the McKinsey survey data shows, the Covid-19 has been a ‘devastating’ justification. It seems unlikely that the pace of change will slow down, so the transformation processes will not slow down with the “new normal” that brings together sectors globally.