For years, businesses have invested in large-scale projects to transform themselves into market leaders. From cloud computing, mobile, big data, and IoT, organizations pursued digital transformation initiatives to modernize and transition the business towards an end goal.
Amusement parks, for example, offered digitized wristbands to enhance their customer experience. Restaurants accepted orders through mobile applications for faster and more convenient transactions. In banking, customers were able to create a fully functioning digitized bank account in minutes. Let us not forget the disruptors - the likes of Grab and Gojek that have revolutionized and digitized taxi services to great success, and the Netflix and Spotify of the digital world that changed the way people consume content and media.
This was the world before COVID-19. As markets resume economic activity, we can see that digital transformation is going to be an even bigger and more urgent imperative.
Charting the new normal
Businesses are focused on mitigating the operational and financial risks brought about by the crisis. One of the factors contributing to financial risk is extreme uncertainty in revenue forecasting. It is now nearly impossible to forecast demand and therefore, cost takeout is the only controllable variable that can help companies reduce financial risk.
However, this poses a conundrum for businesses. How can the company simultaneously engage digitally with customers and reduce costs? The digital transformation journey is not a linear path and digital customer engagement comes with operational risks. With most supporting systems not designed to handle the speed and scale of digital interactions, companies needed to implement upgrades in their system. Pressed against the wall, businesses were forced to choose between taking digital transformation initiatives or cut costs to thrive under the new normal.
In Asia Pacific (APAC), the pandemic has shown significant impact on IT investments. According to analyst firm GlobalData, countries in the region are seeing a 7 to 5 percent decline in ICT spending. Hardware spending is also expected to fall by 6.3 percent compared to the growth of 10.7 percent in 2019. This estimate is even lower than the projected growth of 8.4 percent before the COVID-19 outbreak.
Consider the banking and insurance industries. These industries have relied on legacy databases that served them well for decades. In the months that lockdown measures were in place, the demand on their systems increased because of the spike in digital interactions. More people were checking websites, applying for loans or policies online, processing claims from home and engaging with contact centres. With the influx of digital interactions and online activities from customers, businesses relying on legacy infrastructure were not able to keep up with business demands. As a result, the overall customer experience declined and could potentially lead to customer churn.
The knee-jerk reaction to this is to buy more expensive hardware to scale. However, this may not be the best answer. Often, businesses that are reliant on legacy systems have already maxed out their architecture. Adding new hardware will not solve reliability issues. Moreover, amidst cost-slashing measures implemented across organizations, buying additional expensive hardware may not be one of the options.
A better way in the cloud
With capabilities offered by cloud data platforms, organisations are presented better options in modernising legacy database or data warehouse. They can embark on a digital transformation journey and simplify their data management processes. Moreover, extending enterprise backup to the cloud presents at least five benefits to the business:
Many organisations are walking on a tightrope with the need to balance financial outcomes and execute cost-management strategies. Processes need to be revisited and IT investments need to be adjusted. However, modernisation and transformation efforts must continue to thrive under the new normal.
This health crisis has brought forth valuable lessons. To ensure business continuity, organisations need to have a strong recovery and risk-mitigation strategy. However, it is more vital now for businesses to shift their focus towards long-term viability. The only way to emerge as a winner when the next crisis comes is to develop a culture of continuous innovation and to pursue digital transformation.
Ultimately as the world pivots to a data-driven model, organisations that demonstrate an intimate understanding and management of data will succeed and lead their peers, becoming more resilient to volatility.
Marcus Loh, APJ chief technology officer of Cohesity, authored this article.
The views and opinions expressed in this article are those of the author and do not necessarily reflect those of CDOTrends. Image credit: iStockphoto/ValeryBrozhinsky