COVID-19 smashed through our generally accepted best business practices last year, and the virus doesn’t appear to be done with us yet. It’s time for IT to consider the pandemic as business agility becomes more necessary than ever. We’ve seen even the largest enterprise organizations create fundamental change during this crisis. These organizations are now better prepared to handle what’s next in a tumultuous business environment. How can we capitalize on what we’ve learned, redefine our business models, and move forward into an unknown future? What are the models we learned during the pandemic that we should continue to leverage going forward?
How has business changed since COVID-19?
COVID-19 defined volatility as the new normal. Interestingly, McKinsey confirms what we know to be true: “Businesses reacting to the COVID-19 pandemic have produced previously unimagined gains in speed and productivity, even as the very nature of their workplace was transformed.” This has manifested in a number of ways, with business operations models that we believe will last beyond the pandemic.
- Speedier technology deployments allowed organizations to shift their worker strategies to allow for increasing remote work arrangements. While this created new challenges for IT in our expanded infrastructures, it enabled our HR teams to look beyond local markets for technical talent.
- Few companies had enough supply chain redundancy to handle COVID-19 when it hit. Global lockdowns fractured what we learned were fragile operating models behind our product delivery. We learned that the just-in-time supply models left a lot of shelves bare, and we realized that our reliance on China was potentially problematic. Today, supply chain resilience is the rallying cry of organizations that have moved to shore up their digital processes to rebuild stronger vendor and supplier networks. The supply chain operating models of the future will focus on reducing uncertainty and complexity while increasing redundancy.
- The idea that cash is king came back in a big way as the risks piled up during the pandemic. Mazars stated, “Businesses should review all assumptions that feed into their cash flow projections.” COVID-19 taught us the value of running virtual predictions on P&L, balance sheets, and cash flow within the context of business shutdowns that ebb and flow with the virus spread. Real-time information became critical in this volatile environment.
For most organizations, learning these lessons was like building the plane as it flew. To remain on top of what has become a “new normal,” organizations must take steps now to capitalize on the forced business agility we adopted during the pandemic.
Capitalizing on business agility after COVID-19
Many companies stretched their existing operating models to the breaking point during the pandemic. For those that survived, they learned a process of flattening their structures and eliminating waste. The new normal may focus on moving some in-house systems to SaaS — and in many cases, the decommissioning process is probably way overdue.
Some business models may have permanently changed. For example, manufacturers that switched production to take on new products or companies that found new ways to engage with customers may find these models are more productive and cost-effective. Others may realize that their temporary downsizing or capacity shrinkage is ultimately in the best long-term interests of the entire ecosystem.
Many organizations shifted their operating models from a command-and-control mindset into a more empowered, decentralized decision-making framework in an Agile environment. It makes sense that these models will stick around long after mask-wearing seems like a bad dream.
How will a new “lean and mean” environment affect our technology infrastructures and the workers who deploy them?
Reskill and renew IT to work smarter
Even before COVID-19, CIOs were concerned about the growing IT skilled worker shortage and were seeking automation to extend the reach of teams struggling to keep up with demand. It was estimated that this shift would cause 60% of occupations to have at least 30% of their work activities automated by 2030. The practical impact was that 375 million global workers would have to switch jobs or acquire new skills in the next decade. But with the COVID-19 crisis — and operating models shifting — it’s clear that employers must place considerable reliance on reskilling workers if they want to retain and continue to use valuable resources.
The lessons we’ve learned from COVID-19 have forced massive changes in the enterprise that continue to reverberate. Many of these lessons will shape our future operating models, from how our organizational infrastructures are designed, to the skills we teach workers, to the balance sheets used to run our businesses. How we move forward from here will affect stakeholders at every level of an organization.
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