By Arvin Temkar
Within a matter of weeks and months, companies have launched everything from telemedicine to permanent work-from-home arrangements. The Covid-19 pandemic has proven that digital transformation doesn’t have to be a drawn-out process.
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But making substantial operational and technological shifts can be a daunting task. As the pandemic accelerates change and “normal” slips further away, companies must learn how to manage digital transformation in today’s landscape.
Here’s what to focus on, according to the professionals at the accounting, consulting and technology firm Crowe.
The New Normal
First things first: Your company’s digital transformation road map “might very well be obsolete, and it surely needs to be reviewed and updated given the current state of the pandemic,” said Rick Bliha, partner in healthcare tax services at Crowe.
That’s not necessarily a bad thing. If a hospital or medical clinic predicted that it would take several additional years to successfully implement or expand its telehealth medical services, for example, it’s more than likely proven itself wrong by now because many companies have had to quickly adapt to a new, predominantly virtual environment for their patients.
This virtual environment—where employees and consumers alike interact through their computer screens or even their mobile phones—is “the new normal,” especially in the professional services industries, Bliha said.
As they tackle these changes, companies should focus on three main areas: improving operations, getting to know customers and understanding future markets. With the economic shock of the pandemic, many organizations are feeling a squeeze on resources. Transforming operations might help.
“Digital transformation should focus on a company’s existing resources and its existing responsibilities, with a goal or plan to repurpose these resources through technology and process changes to more value-added and more efficient outcomes,” said Bliha.
He recommended examining processes that can or should be automated. With any company’s tax preparation processes, several opportunities arise. For example, some companies manually enter data for hundreds of Schedule K-1s (a federal tax reporting form), which are sometimes more than 20 pages long. Crowe has created a tax technology-driven solution that can machine-read these forms and automate data entry, thus repurposing resources to more value-added areas, all in pursuit of a company’s digital transformation strategies.
Another essential area to consider is cloud-based computing. Migrating systems to the cloud, rather than relying on clunky on-site hardware, can reduce costs, allow for newer technology and enable a company to quickly scale its offerings, said Justin Bass, chief data science officer at Crowe.
This kind of large-scale digital transformation isn’t easy, though.
“Most of the difficulty of any transformation isn’t the engineering or technical side of it but rather getting the people and processes aligned and able to see the end goal,” Bass said. “Suffering in the short term can mean a larger payoff later on.”
However, even the most well-intentioned and well-planned digital transformations can go awry. Don’t be afraid to cut and run.
“If some technologies aren’t working or getting adopted by the market or internally, executives need to reassess and potentially sunset them,” said Tony Klaich, managing partner of technology, media and telecommunications at Crowe. “Other tools out there might be a better fit.”
What About The Consumers?
Meanwhile, as companies have been forced to change because of the pandemic, so, too, have consumers. It’s wise to keep an eye on how consumers are reacting to new conditions and the evolution of the market.
“This pandemic will permanently alter consumer behaviors: what they consume, how they consume it and when they consume it,” Klaich said.
Of course, consumers have been moving toward digital all along.
He gave an example of a success. An industry-leading video game company stayed with the business model that led it to succeed—think physical discs in shrink-wrapped boxes—but then transitioned a few years ago to the streaming model. Before the transition, the company invested in data scientists and tools to help harness insights from its user base. Those insights led to a critical understanding of what the company’s customers want and what platforms they’re using—and helped make the transition to streaming a success.
Now the company is taking a similar tack and investigating how customers are reacting to the pandemic. Others are following suit.
One tech company, for example, noticed that its consumers were using their product at different hours in the day.
“The company surmised that shift was due to consumers having to juggle a changing home front and when their free time is,” Klaich said. “So they began to adjust their product offering for those different consumption periods.”
Looking Ahead
Investing in tools such as data analytics is just that—an investment. Data collection is useful for understanding the present and also for planning for the future.
“The power of data—its management, its manipulation and its organization—can enhance a digital transformation strategy that can not only be valuable but also predictive,” said Bliha.
Take that legacy gaming company: It’s had success as a leader, and what’s on the horizon? Esports, or competitive video gaming.
“Plenty of industry watchers have seen a quick transformation in consumer habits occur multiple times in the past 10 years: shrink wrap to streaming, streaming advances to mobility and, now, the adoption of esports,” Klaich noted.
Some predictions peg esports as a nearly $3 billion industry by 2022. And the gaming company has its own experts analyzing the phenomenon.
“All those insights are being used by their product teams to position their current offerings, as well as where they need to be in the future,” said Klaich.
Need guidance and tips on navigating digital transformation? Find the latest insights from Crowe on all stages of your digital transformation journey.
