As we survey the landscape after the events of the past year, the resilience of many businesses has been remarkable: the quick response to the cliff-edge disruption that hit; in the blink of an eye, the move to work from home; the rapid innovation and stand-up of digital solutions to serve customers and communities; the all-hands-to-the-pump effort and organisational flexibility; essential grocery and medicine shelves stocked even when supply chains were stretched..
There have been realisations too. Community and local services are so important to us. Work from home has its limitations. Digital has been the lifeline, but personal connection has never been more valued.
Trends that were already well flagged have accelerated – particularly digitisation and the changing future of work. By some estimates, there were five years of change in a matter of months.
So, what happens next? Do we go back to where things were? Will there be a pause, a collective catching of breath? Fatigue is a factor for many. Time to re-energise and reconnect will be required. However, standing still for long is not an option. Transformation will continue as society and the economy emerges from lockdown.
The next phase: thrive
Some sectors remain particularly badly hit and survival remains the priority. We hope they will come back strongly. For many, it is now time to look forward – and with some optimism. Recent Deloitte research with Irish CFOs show that 52 per cent are now preparing for and shaping the post-pandemic future. Deloitte Consumer tracking shows that confidence is growing, slowly in Ireland and mainland Europe, quickly in the US, China and the UK. There is a strong correlation to the pace and confidence in vaccine rollout. M&A transactions have risen sharply. Irish insolvencies are down 30 per cent year on year, perhaps indicating the early success of government and institutional supports.
As we enter the next phase, it is time to prepare to thrive.
Resilient business will be founded on three attributes: agility to allow rapid change and innovation as markets and customers evolve; connection with multi-channel customers and hybrid employees; and trust in the purpose and operations by all stakeholders.
“Sticking plasters”, a collective can-do attitude and reserves of good will have served well during the crisis, but now there needs to be more sustainable and growth-oriented solutions. Working with clients across sectors, we note five themes consistently front of mind – and where to prioritise accelerated transformation and new capabilities.
Connected customer
A major priority is engaging with customers and exceeding their expectations in what will be a mixed digital, remote and physical environment. Customers will choose their preference. Innovative competitors will target niche segments or services. This is not simply a retail or direct-to-consumer matter. In many ways, the changes to traditional B2B business development will be more profound and sudden. Staying ahead will require a blend of customer insight, creative service and proposition design, great experiences (in person and virtual), all underpinned by flexible digital technology. It is a multidisciplinary opportunity that requires fresh thinking and bold action.
Reimagined operations
The pandemic has highlighted weaknesses in core business operations. Over-reliance on narrow sourcing arrangements showed the need for greater agility and in-built resilience. Manual intensive processes failed to perform in a remote model. eCommerce fulfilment models have struggled to scale with demand. There is accelerated adoption of digital solutions – from workflow to intelligent process automation. Benefits have included improved service, at lower cost. A reimagination of operations will continue with a premium on agility, performance and digitisation.
Control towers
Access to good and timely information, and the ability to co-ordinate activity across complex supply and value chains, has been a defining challenge of the past year. Organisations with established management information and business intelligence tools, as well as a culture of cross-functional co-ordination, were greatly advantaged in responding to the crisis. Those without have had to work a lot harder to achieve visibility and control. This was apparent at scale in national challenges such as PPE and testing.
It is also prevalent for businesses across areas such as supply chain, workforce planning, and working capital management. Complex value chains are difficult enough to manage successfully without flying blind. Data management and analytics tools make it feasible to quickly build and deploy the solutions needed for greater transparency and decision support.
Journey to the cloud
The past four years have seen a comprehensive migration to the cloud and modernisation of IT solutions and infrastructure in the US, where Deloitte is the No 1 management consulting firm. A similar transformation is poised in Europe, with the giant hyperscaler firms growing at more than 30 per cent per year and organisations seeking to achieve greater connection with customers and employees through delivering improved digital experiences.
One thing is constant: employee engagement around the enterprise's purpose, customers and goals remains the 'secret sauce'
Successfully adopting cloud is not just a technology change. Cloud redefines how technology enables and partners the business mission – with the emphasis on business-led IT products enabling digital capabilities, including analytics and artificial intelligence, with faster time to value and impact.
Concerns regarding data privacy and commercial dependency on third-party providers are legitimate, but we believe they can be addressed in most circumstances. Every business should consider their cloud transformation plan. It is a critical enabler for any successful business in the digital age.
The future of work (is agile)
Organisations are working through the options and implications when return to work is allowed. Early announcements point to increased remote and flexible working, potentially hybrid models, reduced commutes and office hubs. There is also a recognition of the importance of connection within the team, the need for co-location to support creativity and innovation, and the difficulty of developing and training teams virtually. These all represent conundrums to be solved, but also a positive opportunity to redefine working life.
Current organisation structures and roles will transform, allowing more project work, greater collaboration and constant transformation as markets and customer expectations shift. Capabilities such as digital, engineering, design and data science will be essential but remain challenging to source, develop and retain. Traditional career and development models may not survive, and innovation is required.
One thing is constant: employee engagement around the enterprise’s purpose, customers and goals remains the “secret sauce”. Connecting with teams and colleagues, in a hybrid and more digitally driven workplace requires different leadership skills, and creating a digital and flexible employee experience.
Making it happen
At Deloitte, we partner with clients to imagine and deliver their business transformations. While defining the "what" is important, it is often the question of "how" to make it happen that is most challenging. Capacity and scarce capabilities are constrained. Transformation has become a continuous imperative and a core activity, not a once-and-done programme. Acquiring the organisational agility to deliver will be an essential element of future business success.
There is growing confidence that the worst of the pandemic is behind us. That is why now is the time to ACT: organisations that emphasise agility, connection and trust will have a strong foundation to transform and thrive for future business success.