Covid-19: Building a Digital Bridge to the New Normal
  • The Covid-19 pandemic has forced a sudden economic shift from physical to digital.
  • Companies can use data analytics and other digital tools to strengthen business resilience, customer relationships, technology systems and operations.
  • Executives who take proactive steps now can put their companies in a better position for the new normal.

As the Covid-19 pandemic disrupts nearly every aspect of life, enterprises are turning to digital technology and analytics to help them weather the crisis and prepare for new ways of operating and serving customers once we reach the other side.

People are shutting in and businesses are shutting off in response to the pandemic. That has sparked a sudden economic shift from physical to digital. This is true both for interactions with consumers (online marketing and sales channels, digital products) and the way companies operate (remote working). In Italy, for instance, the lockdown has significantly boosted online shopping, with many people making digital purchases for the first time. Meanwhile, app-enabled food and grocery delivery services across Asia are experiencing an unprecedented surge in demand, and some ride-hailing companies and taxi services have pivoted drivers to deliver food and other items. Beyond the immediate fallout of the crisis, it has become clear that some of these shifts are here to stay: Covid-19 is radically accelerating the digital future.

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Many organizations have circled the wagons to navigate the pandemic, focusing first and foremost on ensuring the health and safety of their employees, and second, on adjusting their businesses to best serve customers. Many are deploying critical measures such as war rooms to accelerate decision making and technology to maintain business continuity.

These are good starts. But business leaders are now thinking strategically about ways to use technology and data to proactively retool their organizations to prepare for the new normal. We see six critical areas in which executives can refine their digital roadmap to put themselves in a stronger position for the long term.

1. Build a digitally enabled war room 

Companies’ Covid-19 war rooms would benefit from technology that increases transparency and responsiveness, and better, near real-time data to support effective decision making. Examples might include implementing digital tools to closely track customer sentiment and behavior, increase supply chain transparency and responsiveness, and replace traditional planning methods with advanced scenario- and trigger-based planning. These tools will outlast the pandemic and give companies capabilities needed to accelerate out of it.

2. Overhaul forecasting to adapt to a rapidly changing environment

Businesses should set aside traditional demand forecasts, which are no longer accurate and aren’t cut out for the changes underway. We recommend replacing them with scenario-planning techniques that are sophisticated and data-driven. Human judgment will also be critically important, particularly when a company has been using machine learning models that rely heavily on outdated demand patterns.

Leading firms will incorporate a wider range of data sets than typical in order to build actionable plans across a broad range of outcomes. This will help organizations adapt to the uncertainty around Covid-19 and the complex reactions of customers, competitors and governments.

3. Build new customer relationships through effective digital experiences

With many people quarantined in their homes, digital experiences matter more than ever. Leading companies will identify the ones that matter most and improve upon them to build new and stronger customer relationships. In other words: Follow your customers during the pandemic, then lead them out of it.  

This requires understanding the massive shift to online marketing, sales and communication channels, not only in retail, but also in sectors such as insurance, banking and healthcare. Leaders will make rapid improvements to their digital channels, starting with eliminating bottlenecks and prioritizing increasingly important customer “episodes,” such as late payments, cancellations and moves to online service.  

Data should underpin all of this. Effective use of it can help companies gather customer feedback and insights so they can quickly test ideas, learn from them and form stronger bonds with customers.

4. Invest in technology with an eye toward the future 

Most companies have taken steps to ensure robustness of their IT systems to enable remote work and operational resilience. Some have also begun to defend against new cyber threats that have emerged during the crisis. These are both critical priorities.

But leading companies will go a step further, investing in their technology architecture to accelerate their digital transformation and put themselves in a stronger position coming out of the pandemic.

Plenty of companies have made similar moves during or immediately following previous economic downturns (see Figure 1). For example, Amazon switched from a monolithic to a microservices architecture in 2001, which made its software development teams more nimble and helped pave the way for the creation of its successful Amazon Web Services business. Or consider Commonwealth Bank of Australia, which began replacing its core banking system in mid-2008, resulting in its becoming one of the first major banks in Australia to offer truly real-time transactions.  

Figure 1

Companies that invest in technology during or immediately following economic downturns can emerge stronger

Companies that invest in technology during or immediately following economic downturns can emerge stronger

Companies that embark upon substantial IT projects now can start by conducting a sober assessment of their current state. From there, it will be critical to prioritize the technology project backlog to aggressively implement projects that advance the new strategy. And through it all, leaders won’t take their eyes off security for a second.

5. Accelerate automation

Leading firms will accelerate automation efforts during the crisis, simplifying as they go and using data to determine critical areas of investment and potential cost savings.

During times like these, it’s important to focus on processes of the highest value and urgency where automation can be deployed quickly. Lower-priority automation projects can be put on the back burner and revisited when there is more stability.

6. Embrace the agile, distributed workforce  

Leaders are quickly building new ways of working for their distributed teams that reduce costs and enable their businesses to move faster. This entails deploying digital tools that go beyond teleconferencing to improve how the organization plans, collaborates, innovates and executes. As a result, these new ways of working already have many businesses feeling more, not less, efficient. (Read more in our Harvard Business Review article about how leading companies have embraced Agile principles.)

For many companies, managing the digital transformation accelerated by this crisis will be a multifaceted push, at times complicated by remote working arrangements and other challenges. But businesses that take proactive steps in these six areas can increase their organization’s resilience, deepen customer relationships and emerge better prepared for the future.

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The global Covid-19 pandemic has extracted a terrible human toll and spurred sweeping changes in the world economy. Across industries, executives have begun reassessing their strategies and repositioning their companies to thrive now and in the world beyond coronavirus.

Greg Caimi, James Anderson and Florian Hoppe are partners in Bain & Company’s Technology & Analytics Group. Greg is based in San Francisco, James in London and Florian in Singapore.

The authors would like to thank Laura Polasek and Vlad Solomon for their contributions to this article.