Digital Transformation and UK Business Survival

Arvind Krishna, The Chief Executive of IBM, said “History will look back on this… as the moment when the digital transformation of business and society suddenly accelerated”. We asked whether IT Directors, Managers/Heads and Engineers of UK businesses agreed.

76% of respondents either agreed or strongly agreed with Arvind Krishna’s statement regarding digital transformation.

Previous research, including a report from the McKinsey Global Institute, suggested that some organisations underperform in the UK because of weak capital investment and the later adoption of digitisation compared to other European countries.

Further, Claudia Vecciolini’s report ‘Gearing up for Digital Transformation’ outlines the existence of a ‘digital divide’ in the British economy. There is evidence that there are gaps in technology adoption, especially in SMEs. Vecciolini argued that there is general support amongst academics of the role advanced digital tech – AI or IoT – plays in innovation and productivity. However, that there was less attention on businesses who lack the capacity to tap into the digital revolution. This suggests that most UK businesses are stuck in traditional business models, impeding cost reduction and holding back overall productivity.

“Digital transformation is also disruptive for companies, forcing them to transform organisational structure and operational procedures and adapt them to the new technology. To accomplish these changes, each company has to undergo a process of restructuring” Vecciolini wrote.  

Using Serviceteam IT’s research results, what effect could the outbreak of COVID-19 have on previous analysis of UK business?

• Greater investment

A general agreement that digital transformation will accelerate as a result of the COVID-19 pandemic could indicate that there is a willingness to invest more in IT.

This is strengthened by cloud communications platform provider Twilio’s research finding that over 1/3 of UK business decision makers believe changes in operations since COVID-19 have increased digital transformation budgets “dramatically”. Yet, there is contrasting research found by Gartner’s 2020 predictions that global IT spending will fall by 8% in 2020.

Veccioloni’s argument that there are companies which are unable to tap into digital transformation could previously have been the case; however, the outbreak of COVID-19 could have accelerated the adoption of technology as a solution to the challenges faced as a result of the pandemic. This challenge could be working from home or a reduced global outreach.

However, see ‘IT Budgets and COVID-19′

• A Digital Culture

The importance of digital platforms is being noticed by a greater number of employees. For example, staff are using software such as Zoom, Teams or Office 365 to maintain business continuity. It may be that these were already implemented in the organisation but were not utilised before the outbreak of COVID-19.

“To benefit from ADTs, companies are forced to embrace a new organisational, digitally oriented culture and to adapt their business models, not least with respect to increasing mass customisation and demand for enhanced services.” wrote Vecciolini. 

|How To| Build a Digital Culture infographic (LINK)

This could also extend to training and remote learning for staff. When the nationwide lockdown began in March, education facilities started to teach virtually. Technology has shown to be able to teach online. The same could, and arguably should, be undertaken by UK businesses to maintain a high skillset in an organisation, rather than experience a skills shortage.

Will the effects of COVID-19 further a skills shortage? Blog (LINK)

Events can also go digital. Online networking has increased in popularity and face-to-face meetings have been replaced by virtual ones. This could also change the perception staff have of IT infrastructure and its value to the organisation.

Yes, I Can Still Network Whilst Working from Home blog (LINK)

• Emerging technologies

This acceleration of digital transformation could also lead to a greater investment into emerging technologies. Emerging technologies include AI, Blockchain, Edge, IoT, RPA and 5G. In previous research completed by Serviceteam IT, it seemed there was more interest than action regarding the adoption of these technologies.

The increased use of emerging tech could increase productivity, remove the time taken completing manual tasks and increase compliance, to name a few benefits.

The effects of COVID-19 on UK businesses and the general view of the acceleration of digital transformation could therefore mean the earlier adoption of IT infrastructure, changing the narrative from previous research findings, including the McKinsey Global Institute study.

Pulling these arguments apart

There are many other factors which would affect whether a business underwent further digital transformation which have not been discussed in this article. For example:

• The intention of IT professionals to further implement technology may be there, but is the IT budget able to facilitate this change?
• The understanding of changing digital trends may be prevalent, but what about IT adoption in practice?
• The importance of digital transformation may be understood but what specific tech would help the business?

However, from Serviceteam IT’s 2020 research findings, it may be that UK businesses are willing to break away from previous research findings of later technology adoption and accelerate digital transformation.