How CIOs and digital leaders are repositioning themselves in the crisis
A strongly declining economy, companies that have to go into short-time work due to a lack of orders, a DAX that is falling dramatically – the effects of the Corona crisis on the global economy are serious. Since the beginning of the year, a virus has kept the entire world in suspense. Even when the virus had not yet reached Europe, the first chain reactions could already be felt. For example, supply bottlenecks for components from China initially led to a slowdown and later even to the complete interruption of production chains in industrial operations. Fiat Chrysler Automobiles in Serbia has already had to suspend production because urgently needed components cannot be supplied from China. The European pharmaceutical industry is also severely affected and anticipates possible bottlenecks for various drugs, as many pharmaceutical manufacturers source essential active ingredients from China.
Currently, border crossings are being closed worldwide, and educational institutions and catering businesses are gradually ceasing operations. However, instead of panicking in the face of this frightening situation, establishing an emergency plan is the strategy of the moment. IT plays a particularly important role in this context.
Budget cuts in IT further intensify the crisis
Due to the weak order situation and sick leave in the workforce, many CEOs are beginning to introduce drastic cost-cutting measures. Even if budget cuts become unavoidable, the digitalization engine must not start to bog down. After all, it is innovation and digitalization that enable companies to continue to be able to act.
Business continuity is based on the use of technology
CIOs and digital bosses now have a particularly important role. The business areas that are already mostly or entirely digitised contribute to maintaining business continuity. Companies with advanced digitalization thus have a clear competitive advantage in times of crisis. CIOs and digital bosses must be prepared for crises like Corona to occur at any time. Digital strategies must take these risks into account.
A digital emergency plan cushions the effects
At the latest in an exceptional situation such as this, previous investments in digital projects lead to a fast ROI. As a minimum, the digital emergency plan should cover the following areas:
1. Creating conditions for home offices
Remote Work and Digital Workplace are not empty buzzwords of the New Work movement, but an important component of digital resilience. For employees to be able to work remotely, technological requirements, such as the installation of a VPN as well as cloud-supported SaaS, collaboration tools such as WebEx, Slack, or teams, must be fulfilled as quickly as possible. The integration of telephony into IP- and IT-based communication solutions is also essential.
2. Anchoring collaboration and agility in the corporate culture
In the current tense situation, cross-functional and decentralised teams offer significantly higher problem-solving competence than homogeneous, local alternatives. Such virtual teams are already used to communicating remotely with each other. The change is not too big for them. It is also advisable to create dashboards that allow the board of directors and management to see the state of affairs in real time. This may include progress on specific projects, but also fluctuations in order intake or cash flow, to name just a few.
3. Cloud computing and decentralised data management
Companies that are already advanced on their way to the cloud have a clear competitive advantage during the crisis. When sales are declining, and less IT capacity is needed, costs fall with an on-demand model. On-premise networks do not offer this scalability option. Another advantage of the cloud is data storage in decentralised data centres. Even if problems arise at one location, the effects are minimal. In addition, cloud computing offers flexibility in the use of individual services and APIs, so that not only can innovations be driven forward even in times of budget cuts, but the running of day-to-day business is also facilitated.
4. Data analytics enables transparency, traceability and forecasts
If a company has developed in the direction of a Data-Driven Company, it starts to pay off now if it hasn’t before. AI and analytics significantly improve simulation and forecasting capabilities so that decisions can be made based on facts. Stress tests provide insights into how unforeseen situations can affect inventory levels, delivery dates and staff availability, for example.
5. Focusing on digital products and IoT
Companies whose products are available digitally are less affected by crises. Online trade, for example, has seen significant growth since the outbreak of Corona, especially in urban areas. Digital self-services such as chatbots or live chats also support customers who have not previously shopped online. In the industrial sector, service providers who offer remote maintenance services, for example, based on augmented reality, or manufacturers of networkable machines are particularly in demand now. Innovative technologies provide the possibility of maintaining operations even in the event of sickness among the workforce because they allow specific procedures and processes to be automated.
What companies need to learn from the Corona crisis
The Covid-19 pandemic shows how digitalization can at least mitigate crises. As a result, companies are well-advised to invest in new technologies. At some point in the future, drugs can be delivered by drone, and patients can be transported in autonomous vehicles and vaccines can be developed with quantum computers within a few hours. Our hyper-networked world poses new risks that can only be countered with hyper-intelligent solutions. And they are digital.
Dr. Carlo Velten
Member of the Board, Cloudflight