Digital transformation has been a popular term in technology circles for more than a decade, so much so it has run the risk of becoming meaningless. Before the pandemic, every business had a plan to digitally transform, but progress was slow. Many sectors were resistant to change or felt that they had plenty of time to complete the transformation.
COVID-19 changed all of that. It forced people to think differently and become more reliant on technology to get the job done. So, as we begin the journey towards the next normal, what now? Will the rate of evolution continue now that people have seen the benefits? Or will businesses revert to the way things used to be done, slowing the pace of transformation once again?
The pandemic made digital transformation key to business continuity. In a matter of days, people went from collaborating side-by-side with colleagues to doing everything virtually. Businesses learned they needed to change the way they operated to survive. Satya Nadella, Microsoft CEO, famously stated on an earnings call last April that they’d seen “2 years of digital transformation in 2 months.” A McKinsey report found that companies were able to adopt digital changes 20-25 times faster than they would have expected, while IBM stated that the COVID-19 pandemic accelerated digital transformation at 59% of organizations.
Necessity is the mother of invention and the speed with which people changed their ways of working – and the impact that those changes had – has been staggering.
At Autodesk, we had to look no further than our own customers to see the evidence. We witnessed a huge jump in the usage of our cloud products, notably among smaller businesses who originally felt they weren’t big enough to need a cloud-based solution. Customers had to embrace new ways of working and truly, digitally transforming how things were done.
The stories of digital transformation were diverse in terms of scale and use-case, but consistently impressive – and as the pandemic wore on, we saw more and more examples of how customers were innovating. Ford had to find new ways of reviewing automotive models and interacting when they could no longer get into the design studio and did so using Virtual Reality. Engineering firm Buro Happold migrated its entire business to the cloud in just a matter of weeks with a spectacular impact on productivity.
The race to the cloud we’ve seen among our customers has been reflected in businesses across the globe. Spending on cloud infrastructure hit $65 billion in the third quarter of 2020, up 28% from a year earlier. Getting cloud projects off the ground and delivering value has become much easier, simply because it had to.
The pandemic forced many businesses to remove the barriers to digital adoption, rapidly accelerating transformation because they had to find a way to enable a remote workforce. Think about network security – companies that historically had strict policies about flexible working and remote access had to re-think and invest in solutions to enable their workforce to remain productive.
As well as the removal of barriers, organizations have begun to see the power and potential of digital transformation. It’s not just about saving money – it’s about creating competitive advantage through things like cloud collaboration. COVID-19 has accelerated digital transformation in creating environments where people are more likely to try things and take (calculated) risks to gain that advantage.
Pre-pandemic, one of the reasons businesses were so slow to transform was the belief that everything had to be perfect to even get started. When COVID-19 struck, people became remote workers instantly and a ‘good enough’ solution was initially all they needed to do their job. Over time we’ve leveraged better quality tools, but that logic should continue to apply to digital transformation on a broader scale.
Organizations don’t need to wait for everything to be perfect before starting a project… half the battle is taking that first step. Start small with pilot tests and then scale, measuring and recalibrating along the way as necessary. The last 12 months will have opened up the minds of more executives to the possibilities it can offer. Leaders are rethinking processes, employee skilling, and ways of doing business digitally.
With the emergence of more and more digital solutions in the workplace – especially in industries like construction and manufacturing – the threat of the skills gap widening is a genuine concern, especially if adoption and transformation continue at their current rate. The World Economic Forum estimates one billion people need to be reskilled by 2030. Today, there are still 7 million job openings in the U.S. while our unemployment rate hovers around 7% (22 million people.)
Along with more than 60 other technology companies, we have lobbied the government to make workforce development a priority, especially in the midst of the pandemic. It will take a concerted effort between the government and the private and public sectors to ensure that the digital transformation we are witnessing creates opportunities for workers. We’ve looked at things like credentialing and certification to help workers gain the skills they need on the job without needing to take part in multi-year university courses. We need to be deliberate – across industries and geographies – about equipping workers with the skills they need to thrive as jobs transform around them.
As COVID-19 vaccines become more widely available and transmission rates drop, the world around us will begin looking more like it did before the pandemic. This means more people returning to offices and meeting face-to-face, which begs the question – will things just go back to the way they were?
The short answer is no. The “next normal” will look quite different, and while in-person will return in part, we will continue to develop virtual collaboration skills. Businesses and workers have seen the power of digital transformation on productivity, collaboration, and competitiveness and we can expect people to continue trying to maximize the value of digital tools and new processes to drive business resilience and competitive advantage. The rate of change will continue, and businesses will become more willing to try things to gain a competitive edge. Digital transformation is here to stay.
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