The COVID-19 recovery will be digital?

For many companies, customers have already migrated to digital. Companies have already launched analytics and artificial intelligence initiatives in their operations. IT teams have already delivered at a pace they never have before. But for most companies, the date changes represent only the first phase of the changes that will be necessary.

Refocus digital effort toward changing customer expectations

It’s not just about digitizing. Companies must also reimagine customer journeys to reduce friction, accelerate the shift to digital channels, and provide new safety requirements. For example, an automobile manufacturer now handles functions traditionally performed by dealers, such as trade-ins, financing, servicing, and home delivery of cars. Airlines are rapidly reinventing the passenger experience with contactless journeys focused on traveler health and safety to make customers feel comfortable flying again.

Business leaders should assess how their customers' needs and behaviors have changed and benchmarked their digital channels against their competition. To then quickly stand up (or refocus) agile teams to execute the most urgent priorities. For example, a consumer-electronics company recently launched an agile war room to improve its website traffic conversion rates. That type of project can deliver meaningful results in weeks. Changes that require more fundamental work, like setting up a new e-commerce channel, will typically take longer. Continually measuring digital-channel performance will be critical so that companies can quickly adapt as they learn more.

Use new data and artificial intelligence to improve business operations

Hundreds of operational decisions get made on daily, weekly, and monthly bases. Modern businesses have several forecasting and planning models to guide such operational decisions. Organizations will need to validate these models because of the massive economic and structural shifts caused by the pandemic, and the data must be reevaluated as well.

As companies construct these models, analytics teams will likely need to bring together new data sets and use enhanced modeling techniques to successfully forecast demand and manage assets. One automotive-parts supplier, for example, developed a forecasting model that incorporated previously unused third-party data. The model will help the supplier spot potential issues with its own suppliers’ ability to deliver needed items, offering a chance to reach out to its suppliers to work out logistics or find another source.

As a first step, it's necessary to mobilize an effort to inventory core models that support business operations to prioritize them based on their impact on key operations and their efficacy drift. Once the situation stabilizes, next-generation models that leverage new data sets and modeling techniques better suited for fast-changing environments should be developed.

Selectively modernize technology capabilities.

Successfully executing the described agenda requires investment capacity and development velocity. Many companies have found they have the potential to free up as much as 45 percent of their IT costs over the course of a year. The right balance will vary by industry, but rightsizing should expose much-needed investment capacity as quickly as possible under any scenario.

Considering upgrading tech stacks, two features of a modern technology environment are particularly important and can be rapidly implemented: a cloud-based data platform and an automated software delivery pipeline. Without these, development velocity stalls and becomes mired in complexity. The good news is that cloud technologies make it possible to deploy these quickly and at relatively low cost.

First, develop the plan to rightsize and create a more variable cost structure— choose your cloud partners. Carefully review those that appear too good to pass up to ensure that the providers aren’t capturing all the value. During this sprint, it’s also time to modernize the tech stack selectively. CIOs can double, or even triple, development velocity in the short term by focusing on setting up or enhancing a cloud-based data platform and equipping agile teams with automated software delivery. In the final sprint, launch the recruiting of additional digital talent and accelerate the entire organization's digital upskilling. These steps will prepare organizations well for a more substantive modernization of their application landscapes after recovery. Finally, continue to pay attention to cybersecurity. Much of the rapid IT work carried out during the COVID-19 crisis might have created new cyber risk exposures.

Increase the organizational drumbeat

The current crisis has forced organizations to adapt rapidly to new realities, opening everyone’s eyes to new, faster ways of working with customers, suppliers, and colleagues. Companies that have led the way in adopting flatter, fully agile organizational models have shown substantial improvements in both execution pace and productivity. This has held during the crisis, as we see a direct correlation between precrisis agile maturity and the time it has taken companies to launch a first crisis-related product or service. While many companies have at least a few agile teams in place, few have successfully scaled to hundreds of teams staffed with many more “doers” than “checkers,” which is needed to drive the accelerated organizational pace the crisis—and even the next normal—demands.

Standing up, a digital factory is largely the best approach right now because it can be constructed and scaled in three months or less. From banks to mining companies, many organizations have accelerated and scaled their digital delivery by establishing these internal factories, with interdisciplinary teams aligned to businesses’ digital priorities. Remote working can also enable new productivity opportunities, especially for companies with large field forces. One leading provider of residential solar services recently documented record sales using a more remote sales model.

During the first sprint, identify the business areas where digital-execution velocity is needed and map out digital factories' plans to support them. In parallel, assess where remote work models could unleash productivity benefits. These two lenses should set the table for targeted changes to the operating model. In the second sprint, design the new models with consideration for staffing level, expertise mix, governance, and operating procedures. Finally, in the third sprint, implement and operationalize the new designs.

Leaders who want to succeed in the digital-led recovery must quickly reset their digital agendas to meet new customer needs, shore up their decision-support systems, and tune their organizational models and tech stacks to operate at the highest effective speed. In other words, C-level executives must point their digital firepower at the right targets and quickly execute against them. It’s essential to set these targets at the outset and regularly measure progress against them. Achieving parity or better across digital channels to win the revenue race, rebuilding the most critical decision-support models, and doubling development velocity are goals that are all within reach.