How digital transformation builds business resilience.
The global COVID-19 pandemic set off seismic changes for all organizations, regardless of size or sector. They had to quickly adapt to remote work, alter logistics and supply networks, and change operational procedures to deal with the risks.
The pandemic spread across the globe at astonishing speed, the likes of which we hadn’t experienced in years. However, the crisis in Ukraine is reigniting uncertainty and throwing the world back into levels of disruption and business risk unseen in generations.
In times of crisis, some organizations grind to a halt and fail, while others innovate, grow and thrive. The difference is their business resilience.
For organizations, business resilience is more than just dealing with issues and challenges. They see it as creating a strong culture fortified by technology and digital tools.
In the McKinsey study, they say that technology and digital tools allow them to see around corners and be ready for the changes ahead. They make operations more agile and responsive without increasing costs.
Research conducted by the World Economic Forum measures the performance generated by the integration of advanced technologies throughout the value chain:
- 90% productivity increase
- 100% improvement in speed to market
- 50% increase in energy efficiency
Understanding, anticipating and taking into account the forces and pressures your organization faces allows you to find a position that creates new value propositions. That’s what we’re looking at in this 7th issue of Tech Radar.
5 market shifts to watch
The past two years have given us a new perspective on organizations and their ecosystems. Various forces are putting pressure on companies, with significant impacts. It’s hard to say for sure whether these pressures are temporary or to really understand how they will affect organizations and their ecosystems. However, temporary or not, there will always be market trends that affect businesses and society, whether positively or negatively.
- The labour shortage: This is perhaps the most obvious pressure since it affects every organization in all sectors across Canada, but particularly in Québec. Many analysts have been predicting this shortage for the past 30 years. There are many reasons for this. First, the labour force (defined as working-age adults who are available for work) has been shrinking for many years. We’re seeing fewer new workers entering the labour force than leaving it. In February 2022, Canada had one of the lowest unemployment rates in its history at 5.5% (4.5% in Québec), close to the pre-pandemic rate of 5.4% in May 2019. The labour market is at full employment, with the employment rate increasing in February by (+1.8%) over the previous month. So how can employers stand out to both attract and retain talent?
- The pandemic: In 2020, countries around the globe were hit with COVID-19. The highly contagious virus, with its severe symptoms, caught the world off guard. Two years on, there is still a lot of uncertainty. The Minister of Health and Social Services, Christian Dubé, tabled a bill to end the pandemic state of emergency in Québec, but it won’t take effect until December 2022. The uncertainty around the possible tightening of measures remains. There is still a risk of new waves and new variants emerging, and it will take awhile to resolve supply chain disruptions. What can companies do to manage this uncertainty?
- Environment: In the most recent Intergovernmental Panel on Climate Change (IPCC) report the magnitude of climate change effects is greater than in previous IPCC reports (released every five years). There is growing pressure on organizations to reduce their environmental impact and put increasingly advanced ESG policies in place.
- Cybersecurity: According to the Canadian Centre for Cybersecurity, there will be nearly 38 billion digital devices by 2025, and a cyberattack will occur every 39 seconds. Even with world-class preparation and protections, any organization is at risk of a cyberattack. According to our recent survey, only 38% of employees say their organization has a high level of cybersecurity. Cybersecurity should be seen as a foundational component of digital business transformation and incorporated into all phases of development and integration.
- Regulatory pressures: Companies are always subject to pressure from government authorities. In recent years, provincial and federal governments have been updating legislation and adopting new laws in the digital shift. For a long time, new technologies could be developed without too many government restrictions. That is less and less common now.
Want to know more about market pressures and how to anticipate them?
How can organizations deal with these pressures?
Digital transformation and technology tools present many optimization opportunities to reduce the impacts of market pressures. Here are six technologies and how they’re being applied to address these external forces.
- Artificial intelligence: AI has become widespread in recent years. There are more and more turnkey tools that can be integrated into practices without extensive programming knowledge. By automating repetitive tasks, AI frees up your staff for more value-added tasks, taking pressure off your workforce.
- Internet of Things: The IoT has many applications, including a significant reduction in energy consumption. Synchronizing and automating sensors installed on lights, pumps or machines allows companies to implement systems to optimally manage energy resources.
- Blockchain: It’s no secret that blockchain is a key tool in cybersecurity. Among other things, this technology enables secure, encrypted banking transactions without the possibility of data being deleted or modified, making it virtually unhackable.
- Cloud computing: This technology has become almost a standard in most organizations that have started their digital transformation. It has many benefits. Storing data on an online server keeps it separate from your company’s processes. Cloud computing is a good solution for organizations with limited financial resources, making it easier for businesses to go digital.
- 3D printing: With the supply chain pressures we’ve been experiencing in recent years, it has become very difficult to get certain materials and parts. 3D printing is an excellent manufacturing solution to produce components and parts with far less material than comparable parts made using traditional processes.
- Augmented reality and 5G: A solution to help companies address the shortage of skilled labour by enhancing and upgrading skills. Augmented reality allows for more realistic training implementation. Training data can be stored for more integrated learning, and programs can be reused and updated. The 5G network enhances training for companies with remote employees.
Download the 7th issue of Tech Radar to see the broad applications of these technologies and how they’re addressing the pressures organizations are facing.
How do you integrate digital transformation into your strategic planning?
We’ve all heard the famous saying “It’s not the destination, it’s the journey.” Having goals provides direction, but those goals can change over time and might never be achieved. The transformational journey is an agile, cross-functional process that provides a dynamic dimension to transformation. At Talsom, we believe the transformational journey never ends and is a path to the North Star (a transformational ideal where organizations are constantly learning and adapting to deal with economic and social disruptions).
Organizations operate in ecosystems that are under constant pressure, and these pressures highlight different “pain points” that require change. Establishing a path to transformation helps develop a culture of organizational resilience.
Understanding and analyzing your environment and the technologies you can leverage gets you thinking about the consistency of the roadmap to creating new value propositions. Digital transformation is the evolution of your entire business model and value chain, based on innovation and new technologies.
Download the 7th issue of Tech Radar.