05 October 2021
Becoming future fit: Reframing the future beyond COVID-19
You’ve never adopted technology this fast before, you will never adopt technology this slowly again! What are these transformations and how are organisations harnessing them, based on customer expectations? An exclusive case study by reputed consultancy firm, EY for Namaste Leader’ Playbook.
Every crisis presents an opportunity. While the world grappled with an unprecedented health crisis which morphed into an economic one, there were a few consequences which have helped prepare business & society at large for a reframed future. Entirely new platforms of vaccines developed at an astounding pace may lead to a golden age of drug discovery.
The working world has participated in a giant social experiment of remote work which has helped accelerate the future of workforce towards a more hybrid culture. Employees having more time at home have taken a fancy to investing in financial assets with retail participation driving stock markets to all-time highs. This has prompted a wave of companies to go a public and further incentivised a record number of founders to go down the start-up route which may lead to an unprecedented age of innovation.
Individual companies are becoming future fit in following areas:
- Adoption of changing work styles
According to the EY 2021 Work Reimagined Employee Survey:
- More than half (54%) of employees surveyed from around the world would consider leaving their job post-COVID-19 pandemic if they are not afforded some form of flexibility in where and when they work, according to the EY 2021 Work Reimagined Employee Survey
- 9 in 10 respondents want flexibility in where and when they work, with millennials twice as likely to quit as baby boomers
- 85% of Indian respondents believe their productivity can be accurately measured irrespective of location
- 69% in India said they would choose flexibility with regard to “when” they work. 76 per cent wanted flexibility related to “where” they work
- On average, employees said they would want to work between 2 and 3 days remotely after the pandemic, with a few batting for a shorter working week altogether
- 63% of respondents in India felt that if company subsidy for home office set-up is provided by the employer, it would make their work life much easier
- 84% want their company to make vaccination a pre-requisite for working from the office
As employees demand more flexibility even after end of pandemic, employers who have already embraced remote work will be in a better position. They have already invested in work from technology and can now focus on managing teams remotely in a sustainable manner.
Over-communication may hold the key as while working remotely non-verbal cues are not picked up and learning by osmosis which happens in a physical environment is missing. Employers also have to facilitate socializing in a hybrid manner and can opt to meet for collaborative meetings and attending large scale events. On other days, employees could continue to work remotely.
- Accelerated Technology adoption
You have never adopted technology this fast before and you will never adopt technology this slowly again. The digital transformations we are seeing today will occur within much shorter timeframes. By harnessing new and emerging technologies, companies are readily responding to changing customer expectations and behaviors, driven by digital natives
- 90% of companies are prioritizing an increase in capital allocation toward digital transformation
- 95% of finance leaders in the US (and 72% globally) say artificial intelligence (AI) will be vital for the finance function of the future
- 24% of finance leaders say blockchain will be the function’s most important technology in five years
- 75% of organizations are likely to make considerable investments in the Internet of Things and app- and web-enabled markets
- 73% of organizations are likely to make considerable investments in machine learning
- 58% of organizations are likely to make considerable investments in augmented virtual reality
Organisations can use AI to reduce time to hire, improve candidate experience and enhance quality of hire. There are many possibilities of these revolutionary technologies. Artificial intelligence (AI) could help leverage consumer data for marketing, revolutionise hiring process for HR & help organisations become more data driven across the board. Blockchain technology offers new approaches to services contracts, price discovery and the entire transaction life cycle, creating potential cost savings and process efficiencies too compelling to ignore.
Impact of COVID-19 has increased urgency of digital technology investments with companies bulking up on their Digital, Cloud, Analytics & Cybersecurity capabilities. Most organsitions have relooked at their entire technology stack and have begun an end to end digital strategy journeys with an idea of making themselves future fit in technology led world
- Coming through the cost cauldron
Over the past pandemic months, many businesses had to deal with the budget pressures and various uncertainties. Businesses had to cut costs just to stay afloat and/or manage their working capital needs to maintain short-term efficiency and boost liquidity.
According to EY All Tied UpWorking Capital Management report 2021
- 2% point Deterioration in working capital as a % of revenue
- In the 12 months ended 30 September 2020, businesses in India saw an increase in the cash to cash cycle by 6 days year on year
- 9 out of 12 sectors including Metals and Mining, Oil and Gas and Pharmaceuticals observed an increase in days of inventory
Organisations have been forced to cut all fat to the bone. Most of them have adopted Zero based budget methodology and questioned every assumption. This has allowed them to enable an advantageous business structure which can take advantage of post Covid recovery in consumer spending
COVID-19 exposed long-standing weaknesses in how we make, distribute, and sell goods. Increasingly, supply chains have been stress-tested. While earlier optimised only for cost, now have an additional factor of resilience – diversification of supply sources. For example, many Indian car manufacturers are looking to spread their supply across multiple sources rather than just stick to the cheapest source
In addition, organisations have digitized and automated supply chains to make businesses future-ready. They are moving towards an agile and digital supply chain consisting of intelligent monitoring, data capturing and management, crisis and exception management frameworks among other features which will be a massive game-changer for businesses.
An Indian steel company leveraged digital technologies such as AI/ML to transform its procurement and production value chain, enhance productivity and boost margins. Additionally, companies have refined their capability to stress-test financial plans for multiple scenarios.
This need has enhanced the adoption of business continuity planning to understand the potential impact on financial performance and assess how long the impact may continue. Companies are now accounting for multiple rainy-day scenarios in their calculations which was not happening earlier. They are focusing on critical areas such as are financial risk, regulatory risk, business resilience, contract and third-party associated risks and internal controls and assurance.
Moreover, our buildings which we spend most of our days and life in are now healthier.
Several mega-trends are fundamentally changing the business landscape – from shifting demographics to the rapid adoption of new technologies. In many ways the Covid-19 crisis has accelerated the drive towards the transformation these trends were already fuelling. At the same time and as a result of the fundamental shifts, new competitive dynamics are reshaping whole industries – from tech-enabled start-ups to tech giants diverging across sectors, upending traditional businesses with new ways of operating and routes to market. While the crisis has forced organisation to relook at all their assumptions, they would come out of it renewed and ready to take on the post-COVID world.