5 ways to accelerate digital business in 2021
5 ways to accelerate digital business in 2021
Digital business acceleration is the most important trend Gartner sees in the market right now. Here's how CIOs can free up resources to make that possible.
Gartner research finds that a majority (69%) of boards of directors have accelerated digital business as a response to COVID-19. CEOs, too, are looking to prioritize digital investments going into 2021 as they plan for growth and recovery in a post-pandemic world.
To keep up this pace, IT leaders must be aggressive in taking things off the organization’s to-do list and prioritize freeing up time, attention, and resources in order to achieve digital business acceleration. Here are five ways to do it:
Remove elements of the pre-COVID-19 strategy that are no longer relevant
A common question our clients asked us during the height of the COVID-19 lockdowns was: When will business get back to normal? Initially, many were operating under the assumption that the pandemic was simply an interruption to normal operations and were keeping their early 2020 strategies on the backburner in the meantime. Instead, enterprise leaders must recognize the reality that key elements of customer and employee behavior have fundamentally shifted in ways that may not align to what was envisioned at the start of last year.
In fact, Gartner's 2021 Board of Directors Survey finds that 48% of board directors expect the enterprise to change its business model as a result of COVID-19, and 57% of enterprises have changed their strategies at least a little because of the pandemic. For their part, CIOs expect that shifts in demand, customer engagement and disruptions to supply chains will continue into 2021. To accommodate these changes, IT leaders should plan to have a new set of strategic business options going into the new year, ditch previous strategies, and plan for multiple scenarios.
Avoid holding onto a pre-COVID-19 investment posture
Investments in legacy IT and data centers are familiar and still widely made, but they require resources that could otherwise be directed toward future proofing for business outcomes that became even more important during the pandemic. Initiatives such as digital-business-grade cybersecurity or hyperautomation are worth the time, money, and effort to achieve post-pandemic, digital enterprise goals.
It’s imperative for CIOs to pause innovation initiatives that were conceived pre-pandemic and renew them only if they meet new digital business imperatives. For example, CIOs should halt data innovation initiatives that focus on predicting the future using data from the past and instead point data innovation toward real-time intelligence and optimization.
Minimize digital friction in work practices
The current hype around automation and the future of work misses the reality that analytics and technology capabilities have already altered the way jobs are performed, yet enterprise structures have not kept up. Consequently, the majority of employees experience significant levels of digital friction, which can cost large enterprises hundreds of millions of dollars a year. Gartner estimates that an enterprise with 25,000 employees loses $175 million to $195 million a year in productivity due to unnecessary processes, bureaucracy, and ineffective toolsets.
A Gartner survey found that 41% of employees outside IT have moved beyond tech “end users” to become technology producers. CIOs that actively manage digital friction can turn these employees into instruments of change to accelerate digital and respond more effectively to threats and opportunities.
Two specific actions that leaders can take to remove barriers to work are ending dependence on centralized decision making—especially as it pertains to risk management—and holding off on performance appraisals as the coronavirus crisis remains ongoing. Instead, empower employees at the edge to make responsible decisions and only escalate essential decisions. Redirect middle management and HR resources that would otherwise be expending energy on performance reviews toward digital acceleration efforts instead.
Stop endless market research
Many enterprises that Gartner works with perform extensive market research to make certain that the new products or features they are exploring are what the market is explicitly asking for. In the digital world, this approach is a bit misguided for a few reasons: Excessive market research could delay the service launch to a point where the enterprise misses the window for optimal business performance. Customers might not even know they want a certain product until it’s rolled out. And other competitors may seize the opportunity while your enterprise is still researching.
IT leaders should adopt venture capital tactics and build a portfolio of “startup” ideas, rapidly create a minimum-viable product for each idea and rapidly develop and scale. Partnerships and customer co-development can help to gain faster understanding of the market for these new products and to spread risk.
Shift the focus away from optimizing operations for stable business conditions
Long periods of stable business conditions may not return for some time—if at all. Conducted prior to the pandemic, the 2020 Gartner CIO Survey found that half of enterprises suffered a severe disruption in the previous four years. In 2021, with most enterprises focusing on digital business initiatives, digital disruption or M&A activity may be next.
Enterprise operations in stable conditions practice rigid processes, emphasize productivity and cost efficiency, and emphasize organizational structures and culture. However, to thrive amid the ongoing disruption, leaders must de-emphasize these things in favor of agility and continuous learning, resilience and innovation, and risk taking—activities that prepare the business for future opportunities and threats to their customers, services, and value propositions.
Author: Stephen Smith
Stephen Smith is a Vice President with Gartner in the CEO and Digital Business Leadership Research team. Mr. Smith covers digital business, the cross-industry impact of disruptive innovation, strategic planning and the blockchain for manufacturers.