Coronavirus has highlighted the importance of digitisation, but how can businesses ensure they fully grasp the opportunity for digital transformation? Written by: Dani Redd
Even before the COVID-19 pandemic swept across the world, companies were investing heavily in digitising their businesses.
According to a report by the International Data Corporation (IDC), businesses spent $1.25 trillion on digital transformation in 2019. By 2022, over 60 percent of global GDP will be digitised. In other words, soon digital innovation won’t be a way for businesses stand out from the crowd – it will be a basic requirement for doing any kind of business at all.
According to experts, we now live in a post-digital era.
“In its first phase, digital was managed separately from traditional channels, often leading to internal competition within the business itself,” explains Duccio Vitali, CEO of Alkemy. “What it is meant by ‘post-digital’ is that now digital and physical channels are integrated to innovate and improve the customer experience.”
Duccio Vitali knows digital.
After graduating in engineering, he spent the 90s working in one of Italy’s first internet startups, an independent online advertising agency, before returning to university for an MBA, and then joining global management consultancy Bain & Company.
“In those years, I realised that something was changing,” he explains. “The CEOs of our customers’ companies were starting to understand that ‘digital’ was something far beyond the development of a simple website, and they needed help in evolving their business model to really capture the value of digital. And I also realised the general struggle in the consultancy world, as no one was really able to address their needs. Thanks to my past experiences, I soon became Bain’s ‘digital guru’ and the point of reference for CEOs on the subject.”
In 2012 he founded Alkemy, which was set up to fill this gap in the market, enabling CEOs of large companies to digitise their business models through a combination of strategy and implementation. He was recently recognised by Business Insider as one of 100 People Transforming Business.
It is undeniable that the COVID-19 panic has highlighted the importance of digitising business models.
Within the retail sector, strides were made in ecommerce, with many companies blending virtual reality technology merged with online shopping to recreate the experience of browsing in a real shop. Image search and personalisation – being able to visualise an outfit on a human body – is one example. Digitisation and AI have also been leveraged to great effect in healthcare, from robots taking temperatures to ‘test and trace’ apps.
Vitali believes that digitisation is now vital for all companies.
“All companies have always had an increasingly urgent need to digitise their business model. The COVID-19 pandemic has greatly accelerated this process. Indeed, it has shone a light on the strategic relevance of digital innovation for companies,” he says.
But digitisation should be about more than a survival response to COVID-19.
“The worst mistake that a company could make right now is to use the digital lever just to plug a hole and to respond only tactically to the current situation. On the contrary, the time has come to finally grasp the opportunity to change and evolve the whole business structure and development. At least 20 percent of the EU Recovery Fund must be employed on digital transition investments: companies can’t miss this chance,” the CEO explains.
For Vitali, communication should be a key pillar of any company’s digital transformation strategy for recovery post-COVID.
“If there is one thing the pandemic has highlighted it is how quickly things can change,” he says. “What seemed a certainty the day before may no longer exist the next day. Technology evolves, markets and habits change quickly, and the only thing that can keep a company relevant is to build, sustain and maintain a strong relationship with its customers.
“Through the digital lever all companies can keep constant contact with their clients, understanding their changing needs. Despite the turmoil, the relationship resists, and it’s what makes the evolution possible.”
The companies who are emerging well from the COVID-19 crisis, then, are not necessarily those who have embraced the most cutting-edge technologies. Rather, it is those organisations who have leveraged digital strategies to communicate well with their staff and customers who are proving to be most resilient.
A post-digital evolution
The pandemic has accelerated the post-digital evolution.
“Current market trends arise from the fact that from now on all businesses will be tech and data driven, and to be resilient and competitive companies need to do multiple things, from redesigning the customer experience, to integrating data analytics into the decision-making processes,” Vitali says.
This means that companies will need to learn and integrate skills that are not necessarily their core competencies.
For example, a mining company will have to look beyond its core business, searching for experts and business models outside of the sector. The CEO believes that this highlights the need for innovation governance to help implement the digital transition.
Businesses like Alkemy are also on hand to help. In line with the post-digital landscape it has undergone its own innovation programme, transitioning from a ‘digital enabler’ to ‘an evolution enabler’, embracing the need for integrating physical and digital strategies for growth. To help facilitate this last year it acquired a 20 percent stake in Design Group Italia, an international design player focussing on product and space design.
“Integrating digital and physical channels to deliver the best possible experience for customers is much more complicated, but it is the only way to really evolve the customer experience and create incremental value for clients and companies. And Alkemy is committed to support the top management of companies in such a critical journey,” the CEO says.