Digital Acceleration from the Old Economy to the New Economy in the post Covid era
By: Dev Yadav
Tags: Digital Transformation, Technology Transformation, Business Transformation, Transformation

The current Covid-19 crisis has provided a view into the future world. A world that will be primarily driven by digital technologies. Digital will be central to every interaction, either within the organizational domain, or while delivering value to the customer. And organizations will have to align to this new reality overnight. Digital channels will become the primary way to interact and collaborate with other businesses, they will drive the customer engagement models and will play a pivotal role in defining the Value Proposition for customers. Most of the supply chains will be transformed using digital technologies. Customer behaviors will be significantly impacted by the digital experience and organizations will find new ways to working to respond to these changes.

How will the Old Economy companies respond to these changes?

Traditional Business models involving physical, tangible products and touch points with customers currently treat Digital interfaces as secondary. With legacy processes drive their operations, they seem to be lagging behind the new challenges thrown by the ever changing customer preferences and their digital competitors.

At the moment, the Digital transformation efforts within these organizations have been approached as a piecemeal or in a fragmented and uncoordinated manner. This has led to local optimizations within the organizations, while the larger organization has not seen significant improvements in the absence of a cohesive plan for the whole organization.

These Organizations will be tested to a much greater extent by the organizations that are born with a Digital value proposition.

The Born Digital Organizations have their products and services that are digital in nature. The Sales Channels and Customer interfaces are primarily digital. Their processes are also digital — apps for their sales force, digital payment gateways, paper less offices, AI and algorithms baked into their DNA from the very beginning.

Even if there are any physical services, they are largely digitally enabled. Ex: Warehouses run by robots requiring hardly any manual intervention, factories primarily driven by automated machines.

These new age born digital organizations are challenging the status quo of the existing players across the entire business landscape; be it Manufacturing, Retail, Financial Services, Travel and Hospitality and many others business domains.

What does Digital transformation mean for the Old Economy organizations?

The existence of the Old Economy companies depends on their ability to adapt to the Digital model.

They need to rethink existing Value proposition in a Digital way.

They need to transform the existing Value proposition using the opportunities Digital technologies offer.

The Old economy giants need to pilot new digital business models that are centered around the customer value proposition that can outperform the existing ones and can thrive in the new reality. And all this needs to be carried out at a rapid pace before digital tsunami inundates them.

Using this digital transformation involves rethinking their value proposition to their Customers, not just their operations, supply chain, sales and marketing. They need to strategize how the digital technologies can enable these organizations to create and deliver new customer value via existing and new channels.

Organizations need to break down the Digital Transformation into the Digital part, which means adopting technologies such as Cognitive Computing, Cloud, Block Chain, analytic systems to drive business value.

Along with this adopting a Lean, Product-driven model made up of cross functional teams from customer experience, operations, design, technology is a critical part of the journey.

Organizations also need to pay significant attention to the Transformation part which involves changing the organization’s culture, people’s mindsets, skills, structure, roles. This part of the transformation is likely to take longer and generate more chaos than adopting new digital technologies.

As George Westerman pointed out, the Old Economy organizations need to leverage the use of digital technology to radically improve their performance and the reach of the organization.

New reality for Organizations in the post Covid era

Within the last decade, the digital platforms have disrupted many of the traditional business models across industries; the current crisis has accelerated that disruption and will present a new “ecosystem” driven by digital in the post covid era. In the last 6 months, organizations have started accelerating their digital transformation, enabling them to improve their current offerings along with offering new value propositions.

And as organizations are preparing themselves to weather future storms, digital is driving their resiliency plans to future proof their operations and also aligning them around the customer. Whether it is about harnessing digital channels to supplement the existing ones or further strengthening their relationships with their customers, digital is the way most organizations are trying to succeed in the new reality.

It is an opportunity for Organizations to rebuild a future-ready, nimble enterprise using digital technologies that can be a source of competitive advantage. The ongoing challenges and opportunities that the current crisis has provided has provided a glimpse of the new reality that organizations will have to be prepared for.

This new reality demands Organizations to be bold, nimble and continuously learning and improving. The pace of experimentation will have to outpace the rate of change around them.

Digital acceleration will provide them will the capability and resiliency to respond to these changes that will be a constant feature going forward.