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COVID-19 and Digital Transformation

Updated: Aug 29, 2023

A report by IBM states that the COVID-19 pandemic has accelerated digital transformation at 59% of organisations they surveyed, and 66% say they have been able to complete initiatives that previously encountered resistance. This culture shift is in part defensive: reducing costs is the top benefit attributed to transformation initiatives.


But something bigger and more long-lasting than crisis management is underway. Before the pandemic, many organisations seemingly distrusted their own technological capabilities and doubted the skills of their own workforces. Yet, in the blur of this year’s pandemic-induced reactions, those anxieties proved largely unfounded.



It has been documented that although initially implementing digital transformation as a method of sustaining organisations during the economic crises of the COVID-19 pandemic, the restructuring of business models to accommodate digital transformation rather presented organisations with opportunities for economic growth. For example, the New York Times recently stated that their digital revenue exceeded that generated by their printed newspaper, a phenomenon never to have occurred in the company’s history (Soto-Acosta, 2020:262).


COVID-19 meant that reliance on tech platforms became more acute, and those platforms – along with the corporate teams who use them – delivered results. It is not that new tech was suddenly discovered and implemented; rather, the tools already at hand were deployed to fuller potential. Previous barriers to implementation were unceremoniously shoved aside, and those who moved first saw immediate results.


The COVID-19 pandemic may have forever altered how organisations around the world operate. Some 55% of respondents say the pandemic has resulted in “permanent changes to our organisational strategy”. An even larger 60% say COVID-19 has “adjusted our approach to change management” and “accelerated process automation,” with 64% acknowledging a shift to more cloud-based business activities.


While the organisational impacts of AI, robotics, and technological tools are immense, organisations should recognise that human capabilities such as “creativity, empathy, judgement, intuition, interpersonal sensitivity, [and intricate] problem-solving” cannot readily be replicated by machines (Soto-Acosta, 2020:262). Thus, the aim of digital transformation is not the eradication of all human interference; but rather, the implementation of such digital systems in a way that allows them to work effectively and safely with employees in order to boost organisational productivity (Soto-Acosta, 2020:262).


Executives have become more trusting of what technology can do, and they are pushing ahead with digital transformation. Indeed, studies have shown that the increasing use of collaborative digital technologies is eradicating or mitigating the communication barriers between company silos which, in turn, is providing a clear channel for “real-time collaboration and knowledge sharing between in-house and outside innovation teams (Soto-Acosta, 2020:264).”


References

1. IBM. (2021). COVID-19 and the future of business. [online] Available at: https://www.ibm.com/thought-leadership/institute-business-value/report/covid-19-future-business.

2. Soto-Acosta, P. (2020). COVID-19 Pandemic: Shifting Digital Transformation to a High-Speed Gear. Information Systems Management. 37(4):260-266 Available at: https://doi.org/10.1080/10580530.2020.1814461.

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