29.04.2020

The COVID-19 Effect – What CIOs Can Take Away From the Pandemic

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Der Corona-Effekt – Was CIOs aus der Pandemie mitnehmen können

The world has been turning more slowly for a few weeks now. While the COVID-19 crisis means a sudden turmoil and completely new challenges for some companies and their employees, others are hardly affected and are able to continue their business as usual. The more digitized a company was before the crisis, the better prepared they are now for any problems in IT infrastructure, central business processes as well as resource availability. Such a difficult situation gives IT managers the opportunity to draw the right conclusions now and, above all, to evaluate how existing processes can be optimized in the short and long term. On one hand, to be able to work efficiently in the current uncertainty and, on the other hand, to be prepared for the next crisis; for those who are well-prepared would be in a solid position to survive similar occurrences in the future.

Hit the ground running

In addition to strengthening the operational infrastructure, the COVID-19 crisis is forcing many companies to accelerate the implementation of their digital transformation strategy. Faced with resource bottlenecks due to this unforeseen situation, companies must operate at least as efficiently as they did before the crisis. In the finance industry, for example, there is an increasing number of loan applications that can no longer be processed satisfactorily and quickly due to a smaller number of employees. The key question, here, is whether the processing can be done, while working from home, given the process may not be digitized end-to-end.

Enterprises should seize this ‘digitization’ opportunity to better prepare for the future. The question managers should ask themselves is: which structural and technological legacies hinder possible modernization and greater efficiency? Since it is just as important to be able to react adequately to market requirements as it is to meet technical expectations, they should consider perspectives of both business and technology, while trying to answer this question.

Efficiency and automation

In the current situation, saving money is the top priority for organizations to ensure liquidity in the long term. In context of digital transformation, this means initially implementing only short-term projects that promise rapid success. Efficiency and automation should be at the forefront in these initiatives and the objective should be to generate a stronger impact with existing resources.

Automation can only work if there is a transfer of knowledge and experience – in other words, if the knowledge of the employees is made available, including past failures. Organizations must invest in the preservation of this knowledge for future (crisis) events, since this know-how will continue to influence operations – even beyond the COVID-19 crisis. Once this foundation is in place, the next logical step is to implement automation solutions in the organization.

Rapidly changing processes should be automated as much as possible using technology solutions. After all, in crises, it is not always possible for the human workforce to “scale” with new, emerging challenges. Let’s take another look at the example of “credit decisions” from above: clerks analyze the application and grant the appropriate credit based on it. As a result of the government’s aid program, the number of applications has increased many times over in a very short time, while the number of clerks has remained the same. This means that all the banks which have already relied on automated credit decisions in advance, possibly even with the help of artificial intelligence, are now better prepared to meet the expectations of borrowers for rapid approvals and disbursals.

In manufacturing, too, stronger process automation and the intelligent control of machines can help to continue being efficient with limited resources and to provide the service that is being expected from you. A predictive maintenance approach helps the equipment manufacturer to minimize downtimes and ensure optimum utilization of machines with minimal supervision: this approach is enabled by automated reading & processing of data and prediction of failure scenarios based on forecasts. The machine builder can then proactively anticipate a potential machine failure and react appropriately. Automated decision models provide significant support in this exercise.

The optimal preparations

Depending on the industry and corporate strategy, the digitization of an enterprise depends on individual factors. Before initiating a change, those in charge must be aware of various things: Which processes need to be digitized/improved? Which are the relevant factors? Which processes can be automated? Also, not to be neglected is the question of challenges to be expected in the market in the long-term.

The IT department has an important role to play here, as this exercise is nothing more than a digital mapping of processes on which the organization is built. If these processes are to be improved and automated, it is critical to identify the right data-set and to design implement solutions to make the right decisions.

Besides, a crisis like the one we are now witnessing triggers a general rethink in IT operations. In many enterprises, the software development process – from the conception to the implementation of software – takes up far too much time. The CIO has to consider the following fundamental questions: “How can we be more agile so that we can adapt quickly and flexibly to changes and react to bottlenecks?”; “Which methods and transformation approaches can we implement to deliver solutions quickly while maintaining the same level of resources?”; “How can we preserve the knowledge of our employees to use it efficiently for automation processes?” and “How can we ensure a fast and better alignment of business and IT?”

The COVID-19 Pandemic is a difficult time for all of us. We have been forced to review the status quo, test ourselves to re-imagine the future, while working within the boundaries of a tighter cost framework. Those who succeed in finding the right answers for themselves will be poised to differentiate themselves and hence, succeed in a post-pandemic world.

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