DX Initiatives Driving Organizational Change
Necessity is the mother of change, and the world’s needs in this pandemic are making digital initiatives a must, rather than simply an option. In a report on its Future of Work (FoW) framework dated July 16, IDC observed that “organizations’ behavior and the way they adopt technology has been changing in ASEAN, especially during the pandemic and these changes will continue moving forward as well, leading to a shift in the transformation strategies and future of work initiatives.”
DX initiatives are mainly introduced in Operations, human resources, and customer relations. But, without a doubt, the pandemic has quite starkly affected these areas. Hence, there is an increased demand for work from home arrangements and contactless digital transactions. Furthermore, improved supply and distribution logistics and quicker responses between co-workers and clientele using digital means are necessitated.
DX initiatives as a tool for adaptation
Organizations need to understand off the bat that DX is an enterprise-wide initiative involving more than just technological investments. DX demands cultural change, employee empowerment, and many other adjustments that maximize the available technology. The changes begin with the organization’s humans, and move on down the line to organizational strategies, policies, mindsets, and resources.
IDC defines FoW as the applications of new talent management practices along with 3rd platform technologies and Innovation Accelerators. The evolution of the concept of work is one of its main agendas.
In its July FoW report, IDC said “a lot of organizations are trying to be adaptive in these challenging times”. For example, ASEAN enterprises are changing the way they run their businesses. Based on a survey by IDC, 50% of the organizations in AP (including ASEAN) are expected to expand/add remote working to their HR policy.
“Organizations have adopted themselves by quickly migrating to remote working models during crisis taking a step towards an agile, flexible work environment and we expect to see more organizations across different industries will formalize policies around remote working. Workforce of the future will be operating in a borderless but high secure, integrated, and collaborative environment” IDC Malaysia Research Manager Mohit Raizada said.
Cost of DX
Changes don’t come for free. Therefore, spending on DX is an investment rather than an expense. On June 11, IDC said its latest Worldwide Digital Transformation Spending Guide that “Canadian spending on DX is forecast to reach C$28 billion in 2020 with a growth rate of 7% according to the, despite the challenges presented by the COVID-19 pandemic.
This pandemic has wiped out “more than C$20 billion of Canadian DX technology investments between 2020-2023,” IDC Canada’s Market Insights and Analytics team Research Manager Meng Cong said. “Yet despite these losses, pockets of growth opportunities exist across most industries”, she added. A deep dive reveals specific use cases that solve specific business problems. A few examples include virtualized labs and data visualization in education and advanced digital simulation in transportation. On the other hand, governments are employing remote health monitoring.
IDC’s Canadian Digital Transformation: Application and Professional Services research program manager Jim Westcott noted that “COVID-19 has impacted the Canadian economy in a number of ways”. More importantly, businesses have prioritized spending on existing and new IT projects and technologies. Westcott added that “DX has emerged as a valuable solution to the business challenges posed by COVID-19″. Because of this unprecedented occurrence, Canadian organizations have had to create long-term strategies. They are getting ready for the post-pandemic era and DX initiatives that are fulfilling these requirements.
According to IDC, the industries “that will see the slowest year-over-year growth in DX spending are the ones experiencing the greatest impact from the economic downturn caused by the pandemic.”
DX Initiatives as an Investment
IDC’s DX spending guide predicted that “personal and consumer services will only see a 1% growth in its DX spending this year”. This is partly as a result of the initial government shutdown for all non-essential businesses. The resources industry will also experience a significant drop with growth declining from 18% to -2%. The dramatic collapse in oil prices has caused this to happen. Additionally, the price war between major global vendors has also contributed. Professional services, on the other hand, will continue to be one of the top industries contributing to DX spending in Canada.
What holds true for Canada will, to some degree, apply globally as well. Though the severity of the impact will vary from country to country.
Robotic manufacturing and intelligent and predictive grid management for electricity distribution top the list of potential DX investment areas. The list also includes 360-degree customer and client management. For instance, spending on robotic manufacturing will hit $813 million in 2020 as per IDC.
Money may be tight now, but spending it strategically will go a long way. They will contribute to making a progressive and steady recovery once the pandemic ends.