McKinsey: Technology tipping point triggered by COVID-19
The COVID-19 crisis has been a tipping point of historic proportions for technology adoption and the pace of change is not going to slow down, reveals a survey from McKinsey & Company.
According to the report: How COVID-19 has pushed companies over the technology tipping point - and transformed business forever, the global pandemic has accelerated digital technology by up to four years. And the share of digital or digitally enabled products in a companies’ portfolio has accelerated by up to seven years.
McKinsey’s global survey of nearly 900 C-level executives revealed most respondents said their companies had met the unexpected demands from the pandemic “much more quickly than they had thought possible before the crisis”.
Executives reported they expect the changes to be long lasting and are already making investments to ensure they are permanent. Top of their list is funding for digital initiatives which includes:
- Filling gaps for technology talent during the crisis
- The use of more advanced technologies
- Speed in experimenting and innovating
Quantum leap sparked by crisis
A quantum leap for digital adoption was seen during the pandemic with customers moving towards online channels, particularly in Asia with at least 80% of the customer interactions digital in nature.
The COVID-19 crisis has accelerated the speedup in creating digital or digitally enhanced offerings. “The results suggest a seven-year increase, on average, in the rate at which companies are developing these products and services. Once again, the leap is even greater, 10 years, in developed Asia,” commented McKinsey & Company.
The survey polled executives on 12 potential changes ranging from remote working to cloud migration and customer expectations. The findings suggest that during the crisis, companies have re-focused their offerings in the span of a few months instead of a few years.
Executives report that companies were much more agile in reacting to changes triggered by the crisis as can be seen in the expected time response to the actual time responses implemented during the pandemic:
- Increase in remote working/or collaboration; expected 454 days – actual 10.5 days
- Increase in customer demand for online purchasing/ services; expected 585 – actual – 21.9
- Increasing in use of advance technologies in operations; expected 672 – actual 26.5
It is reported that companies acted 20 to 25 times faster than expected. In the case of remote working, respondents said their companies moved 40 times more quickly than they thought possible before the pandemic.
“When respondents were asked why their organisations didn’t implement these changes before the crisis, just over half said that they weren’t a top business priority. The crisis removed this barrier: only 14% of all respondents say a lack of leadership alignment hindered the actual implementation of these changes,” commented McKinsey.
Changes are set to stick
Remote working was identified as the most significant change (93%) followed by changing customer needs 63% (a switch to offerings that reflect new health and hygiene sensitivities) and customer preferences for remote interactions (62%).
A total of 62% believe the changing customer's needs is a change that will stick while 54% believe remote working is here to stay and 54% see an increased migration of assets to the cloud as change that will remain.
“Respondents reporting significant changes in these areas and increasing migration to the cloud are more than twice as likely to believe that these shifts will remain after the crisis than to expect a return to pre crisis norms,” said McKinsey.
The results also suggest companies are making crisis-related changes with the long term in mind. McKinsey reports that of the 12 changes, remote working and cloud migration are the two that have been more cost effective than pre-crisis norms.
“Investments in data security and artificial intelligence are the changes respondents most often identify as helping to position organisations better than they were before the crisis. Across these changes, remote working is the likeliest to remain the longer the crisis lasts, according to 70% of the respondents.
Technology focus is critical
The survey revealed organisations that experimented with new digital technologies during the crisis are twice as likely to report revenue growth.
“The crisis has brought about a sea change in executive mindsets on the role of technology in business. In our 2017 survey, nearly half of executives ranked cost savings as one of the most important priorities for their digital strategies. Now, only 10% view technology in the same way; in fact, more than half say they are investing in technology for competitive advantage or refocusing their entire business around digital technologies,” say McKinsey & Company.
The results also show lessons have been learned during the pandemic. “One is the importance of learning, both tactically, in the process of making specific changes to businesses (which technologies to execute and how), and organisationally (how to manage change at a pace that far exceeds that of prior experiences).
“Both types of learning will be critical going forward, since the pace of change is not likely to slow down,” concludes the report.
How changing your company's software code can prevent bias
Two-third of tech professionals believe organizations aren’t doing enough to address racial inequality. After all, many companies will just hire a DEI consultant, have a few training sessions and call it a day.
Wanting to take a unique yet impactful approach to DEI, Deltek, the leading global provider of software and solutions for project-based businesses, took a look at and removed all exclusive terminology in their software code. By removing terms such as ‘master’ and ‘blacklist’ from company coding, Deltek is working to ensure that diversity and inclusion are woven into every aspect of their organization.
Business Chief North America talks to Lisa Roberts, Senior Director of HR and Leader of Diversity & Inclusion at Deltek to find out more.
Why should businesses today care about removing company bias within their software code?
We know that words can have a profound impact on people and leave a lasting impression. Many of the words that have been used in a technology environment were created many years ago, and today those words can be harmful to our customers and employees. Businesses should use words that will leave a positive impact and help create a more inclusive culture in their organization
What impact can exclusive terms have on employees?
Exclusive terms can have a significant impact on employees. It starts with the words we use in our job postings to describe the responsibilities in the position and of course, we also see this in our software code and other areas of the business. Exclusive terminology can be hurtful, and even make employees feel unwelcome. That can impact a person’s desire to join the team, stay at a company, or ultimately decide to leave. All of these critical actions impact the bottom line to the organization.
Please explain how Deltek has removed bias terminology from its software code
Deltek’s engineering team has removed biased terminology from our products, as well as from our documentation. The terms we focused on first that were easy to identify include blacklist, whitelist, and master/slave relationships in data architecture. We have also made some progress in removing gendered language, such as changing he and she to they in some documentation, as well as heteronormative language. We see this most commonly in pick lists that ask to identify someone as your husband or wife. The work is not done, but we are proud of how far we’ve come with this exercise!
What steps is Deltek taking to ensure biased terminology doesn’t end up in its code in the future?
What we are doing at Deltek, and what other organizations can do, is to put accountability on employees to recognize when this is happening – if you see something, say something! We also listen to feedback our customers give us and have heard their feedback on this topic. Those are both very reactive things of course, but we are also proactive. We have created guidance that identifies words that are more inclusive and also just good practice for communicating in a way that includes and respects others.
What advice would you give to other HR leaders who are looking to enhance DEI efforts within company technology?
My simple advice is to start with what makes sense to your organization and culture. Doing nothing is worse than doing something. And one of the best places to start is by acknowledging this is not just an HR initiative. Every employee owns the success of D&I efforts, and employees want to help the organization be better. For example, removing bias terminology was an action initiated by our Engineering and Product Strategy teams at Deltek, not HR. You can solicit the voices of employees by asking for feedback in engagement surveys, focus groups, and town halls. We hear great recommendations from employees and take those opportunities to improve.