The outlook for digital transformation beyond the pandemic
Businesses are often preoccupied with 'innovation'. Far from being merely a buzzword, the concept in fact reflects the necessary and consistent iteration that drives markets forwards and allows those who invest smartly a robust edge over their competitors. The trouble is, truly game-changing innovations are vanishingly rare.
It should not be suggested that iterative progress is only for larger firms with cash to burn. Of course, established enterprises can certainly be more ambitious in their research investment, attract top-class creative and development staff, and prioritise an ‘innovative’ culture over a strictly revenue-seeking one.
However, Small and Medium Enterprises (SMEs) are capable of attaining substantive and market-leading digital transformation through considered planning of their long-term goals and whole-scale alignment with their operational aims. Through a more gradual process of investment, these smaller businesses can benefit from implementing new tech platforms and the consumer markets underpinning them, without the need for grandiose marketing campaigns or exorbitant and likely irretrievable sunk costs on R&D.
The thorn in the paw for businesses small and large alike is, of course, the external disruptive force of the Covid-19 pandemic. The conventional assumption has been that with the business landscape radically altered, and consumer trends shifting overnight, many decision-makers were forced to eschew their long-term thinking towards game-changing products or services, and concentrate their resources instead on ensuring the survival and continuing health of their business.
As a result, it would be understandable if there had been a slump in investing in potentially ground-breaking technologies over the course of the pandemic.
How are businesses innovating in the midst of a pandemic?
However, while this certainly will have been the case for many, the picture may not be as clear-cut as this. Studio Graphene recently commissioned an independent survey of 750 business leaders in the UK to explore their decision-making over the past year, and how they plan to invest in digital transformation over the coming 12 months. Positively, there appears to have been continued appetite for innovation even during the uncertainty of the pandemic.
A majority of respondents (56%) said they had successfully adopted at least one new technology since March 2020. A further 54% reported the circumstances enforced by the crisis itself having inspired long-term digital transformation projects in their business, while less than one quarter (23%) felt disappointed in the results of their companies’ handling of IT projects throughout the past year.
These headline figures point towards the pandemic feeding a greater interest in potentially innovative technologies; with margins tighter and companies required to be agile, decision-makers have sought to invest carefully in transformative platforms to support their existing operations, which may ultimately elicit further investment in emerging tech.
This may or may not prove a sustainable trend; yet there is some cause for optimism that it will continue going forward. For instance, nearly two-thirds of respondents (65%) said they plan to increase the amount they spend on IT, and 62% intend to launch new technology-backed projects in the coming 12 months.
Significantly, when asked about which particular types of tech companies were looking to invest in, there was a notable level of intent towards established, fundamental platforms. While there was significant interest held in emerging tech such as AI (52%), AR/VR (48%), and IoT (52%), pointing towards a growing favourability towards platforms with less established utility but tremendous potential, the crucial digital fundamentals saw higher levels of intended investment.
In fact, investment in cloud technologies (63%) was one of the more prevalent recorded among the respondents. This is an encouraging sign for the future longevity of digital transformation plans, indicating that firms are seeking to build robust digital foundations on which future technologies can be supported. Meanwhile, almost one in two (47%) are planning to invest in no-code or low-code development software that will allows them to take innovation into their own hands.
This is a crucial development for the broader long-term digital revolution which could underpin the post-pandemic recovery. Digital transformation is all about the long-term, and so this increased interest in establishing the foundations where relevant to operations is important. While all business leaders will of course hope to unearth a product, system, or service that will leave their competitors’ obsolete and lagging behind, these are unlikely and less achievable with restricted budgets.
By instead extracting maximum value from existing technologies, and focussing on how they can be used to supplement existing operations when translated appropriately, companies will be well-placed to explore new technologies as they arrive, while extending their reach into new markets in the meantime.
Innovation in the ambitious sense will, for most companies, appear fantastical. After all, many simply do not have the resources to take a fail fast approach, particularly in the strenuous financial circumstances of the past year. However, the pandemic has had a secondary impact that must not be ignored, in influencing businesses to adopt and experiment with the finer details of established technologies at pace to meet changing market trends and conditions, leaving many with either the foundations in place to deliver impressive products to a new trading and consumer landscape, or the will to invest in one.
While this form of innovation is less glamorous, it will reap greater rewards with lower risk attached. Through implemented calculated and cost-averse changes to business models and workflows, firms can ensure a successful and sustainable programme of innovation within their operations.