The global coronavirus pandemic has changed the way business is done, and it is unlikely that companies will return to the old times. At Wipro, we believe companies will face the most change along the following five trends:
- Resilient, safe enterprises with agile supply chains;
- Redefining work models of the future;
- Adopting automation and autonomous processes;
- More rapid digital transformation; and
- Prioritizing ESG (environmental, social, and governance) values
Executives must reassess existing business models and reevaluate investments along with those trends. CEOs, CFOs, CTOs, CIOs, HR leaders, and COOs must work together to create a resilient, digitally driven business model. They must prioritize process optimization by mapping out a more integrated infrastructure that allows for closer collaboration with a distributed workforce, create a more efficient supply chain, and lead to more positive customer experiences.
For example, expansive and trendy office spaces used to be a priority for many companies. Now, business leaders might decide to forgo expensive office space after learning that working from home can work just as well. Similarly, some companies that relied on rigid operational structures might now see the cost benefits of business process agility. They can begin to reallocate capital formerly invested in keeping legacy processes intact.
All the decisions executives make around digital transformation, whether financial or operational, will affect key stakeholders, which reinforces the need to approach change from a holistic perspective. Here’s how relationships with three key stakeholders might look moving forward.
- Digital interactions with customers: The same technologies that will redefine supply chains — whether 3D, AR/VR, or others — will shape future customer interactions. McKinsey has found that digital-enabled sales interactions are now twice as important to customers than they were before the pandemic; traditional sales methods (52%) outranked digital efforts (48%) just a few months ago, but now companies believe digital interactions are preferred by two-thirds of shoppers. In the United States and European Union, retailers could make $260 billion more if they reduced friction in the online checkout process, according to Baymard Institute. Retailers such as Neiman Marcus and Timberland, for example, are exploring the use of VR mirrors to facilitate in-store customer checkout, while the popular beauty brand Sephora is using similar technology to enhance in-store shopping experiences. As companies become more adept working with certain technologies to enhance operations, they should consider how to deploy that expertise to improve customer interactions.
- Reskilling the workforce: The technical skills gap existed before the pandemic, and it has only grown as a result. Employees with digital expertise will continue to be in high demand. Despite a larger labor pool, finding candidates with those key skills won’t be easy. For many companies, reskilling current employees will be the most viable way to develop the capabilities needed to serve customers in the future. Executives will also need to find ways to provide optimal employee experiences for a distributed workforce that contains robots as well as human workers. Employers can easily provide learning, training, and continued education content. Employees can also take advantage of more time at home by learning new skills online.
- Reconfiguring supply chains: The crisis has shown just how quickly disruption can occur. It’s clear that to secure the future efficiency of supply chains, businesses must move away from the previously held values of cost reduction in favor of resiliency. Executives were forced to adopt a more agile and dynamic approach to production and distribution. Some have begun near-shoring supply chains to achieve greater efficiencies, while others are relying more on technologies such as 3D printing to create smaller product batches closer to customers. These and other strategies will become more important. Of course, macroeconomic and geopolitical trends have as much influence on vendor and supplier relationships, so these processes will take time to develop.
Each of these trends and changing relationships represents a holistic view of the next normal. Companies should respond holistically, as well, instead of focusing on one or two initiatives at a time. In addition, companies need to become more comfortable with reacting quickly to unknown factors. McKinsey describes developing a mentality in which your company responds to uncertainty like a “fast-twitch” muscle. If you practice reacting quickly, your reactions will become stronger and more efficient over time. By embracing the major challenges head-on with an agile mindset, your company will be better suited to thrive in the next normal.