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TCS COVID-19 Business Impact Survey 2020

TCS COVID-19 Business Impact Survey 2020

 

Digital Readiness and the Pandemic: Assessing the Impact

Announcing the TCS COVID-19 Business Impact Study 2020

For the past few years, companies that have inventively used digital technologies have disrupted whole industries on a large scale. Savvy disrupters that are agile, automated, intelligent and on the cloud are positioned to enable mass  personalization, leverage ecosystems, embrace risk, and create exponential value.

Collectively, these behaviors represent what TCS refers to as the Business 4.0TM transformation, a wave of change that is reshaping the way business is conducted.  

Today, the same technologies and behaviors fueling disruption have become a buffer against an even larger global disruption. As COVID-19 swept the globe, the need for companies to take a “digital first” mindset shifted from optional to mandatory almost instantaneously. Offices, most retail stores and some factories shut down. Air travel from country to country halted in some regions. Globally integrated supply chains cut many products.

With virtually everything at stake – their workforce, customers, products and services, marketing and sales processes, supply chains, and (for some) entire business models – the digital readiness of companies was put to the test. Could they digitally market their offerings? Sell them virtually? Reconfigure their supply chains? Develop new processes and products through remote teams? Move company leaders from boardrooms to screens?

What we asked

So how did the companies we surveyed do? Did they have the digital requirements necessary to keep operating productively and innovatively in the pandemic?

To find out, TCS asked nearly 300 companies — about two-thirds with revenues over $5 billion — questions in four key areas:

  • How is the pandemic impacting their business, and when do they foresee economic conditions returning to pre-pandemic levels?
  • What are the main changes they anticipate in their business and industry, in areas such as the business model, supply chain and customer experience?
  • What are the most important and most difficult actions they have taken or are planning to take, particularly concerning technology investments and pandemic response?
  • What digital capabilities do they have today, or don’t have but are developing or planning to develop in this pandemic, to remain vibrant companies during and after COVID?

What we found: Sneak preview

We will begin sharing our findings within the month. In the meantime, here’s a preview of the insights we’ve uncovered.

Five key insights

1. Most companies lack essential digital capabilities

Nearly two-thirds could support employees working remotely. But the relative ease with which they did this may have masked the fact that only a very small number of companies were digitally prepared in other ways. Less than a third have these essential capabilities: 

  • Serving customers entirely through digital means before and after the sale
  • AI-driven analytics to continually tweak and personalize the digital customer experience (CX)
  • Core enterprise software in the cloud
  • Highly automated business processes
  • Key digital ecosystem partnerships
  • Digital sensors tracking product performance


2. Companies with essential digital capabilities are coping better

Though the vast majority of companies were caught off guard, a few standouts were more prepared than others. We compared survey respondents on the six digital capabilities mentioned above. We then identified “Leaders” (they had more of those capabilities) and “Followers” (they had few if any of the capabilities) from the two ends of the spectrum of digital adoption.

We discovered that Leaders are less likely to have seen revenue drop during the pandemic than Followers (64% vs 73%). And for Leaders whose revenue did decline, they are far more likely to be confident they’ll bounce back faster than were Followers.

74% Leaders expect revenue to bounce back within two years     

Only 54% Followers say the same


3. Many companies are actively expanding their digital capabilities

Companies caught off guard during the pandemic quickly realized the role digital technologies play in ensuring resilience and adaptability. And as they look forward to new beginnings and new opportunities, many of these companies are turning to these digital capabilities to go beyond traditional constraints and reimagine their business (in some cases, their fundamental purpose as organizations).

The purpose-driven business
A strong driver of how companies adapt themselves is the way they look at their purpose. What is most critical for them? What are their true sources of value? The purpose behind their existence often defines the blueprint for their transformation journey.

We found that most companies without essential digital capabilities are actively building or planning them now. 

Initiatives pursued by the greatest proportion of companies 

44% End-to-end digital CX

44% Highly automated core business processes

39% Core enterprise software in the cloud


4. Digital transformation is a priority, but strategies are often unclear

Budget pressures are intense. Revenue has fallen at 68% of companies, and at least two-thirds don’t see it returning to pre-pandemic levels for more than a year. Despite these dismal numbers, nearly all companies see digital transformation (DX) as a vital priority. Two-thirds of respondents have maintained their DX budget, and a quarter have actually increased it during the pandemic.

The conundrum for organizations is where to invest. Companies must carefully consider what capabilities they need to catch up. Those that do have certain capabilities in place must determine what other capabilities they need to stay ahead. It’s no surprise then that organizations consider these dual imperatives – rethinking strategy and managing cash flow – both the most difficult and most challenging issues facing them right now.

5. The remote workforce is here to stay, and companies are investing in it  

One area of investment that appears unquestionable is support for the remote workforce. Nearly two-thirds of the average company workforce is working remotely now, compared to only 9% before the pandemic. While respondents believe that many employees will return to their workplaces after the pandemic, the average company projects 40% of its workforce will remain remote by 2025.

Keeping employees productive, secure and working in agile teams has proven challenging. The vast majority of companies are increasing their tech investments to support remote work, particularly with collaborative technologies and cybersecurity.

About the Study

In July of 2020, TCS conducted a survey of nearly 300 leaders at global companies in North America, Europe and Asia working in 11 industries to get insights on how they were planning and managing the near-and long-term impacts of the COVID-19 pandemic. Of those surveyed, 63% reported worldwide revenues over $5 billion.

Next Steps: Get the Latest Study Reports

This study is designed to help organizations gain useful learnings and best practices to navigate these business conditions. We will begin releasing the findings this month — across and within the industries we surveyed, and across and within  industries and regions.

To receive the report and other related updates as soon as they are published, write to TL.Institute@tcs.com

Infographic

Five key findings explore the impact and state of digital readiness before and after the pandemic.

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