Three Ways COVID-19 is Accelerating Digital Transformation in Professional Services – CFO
2 julio 2020
Digital transformation was a line item on many business agendas long before COVID-19 came along. But the pandemic catapulted it to the top of the priority list for virtually every business in the world. Now, as we start to look past the immediate pandemic crisis response and toward a “new normal” where working-from-home is expected, the need for cloud-based infrastructure is a no-brainer and predictive analytics are essential. The pace of digital transformation has been dramatically accelerated — it’s not a conversation starter now, it’s a basic business requirement.
Consider the simple example of virtual claims processing in the auto insurance industry. In virtual claims, customers take a picture of their damaged vehicle and submit it directly to their insurer via mobile app. In early April of this year, during the height of the pandemic, Allstatethat more than 90% of all of its auto claims would be submitted via its virtual tools. That was up from 50% two weeks earlier. Before the pandemic, of auto insurance customers used virtual claims tools.
When the world does eventually get back to normal, whatever that may look like, there is no way that the insurance industry is going to go back to the old way of doing things. When compared with the traditional method — sending a claims adjuster to evaluate the damage, submitting a report, waiting for the information to be reviewed — the digital approach saves significant time and money and reduces the likelihood of error.
And that’s just one small example of how the pandemic was a catalyst to a digital initiative that was in the works for a long time but had not yet reached critical mass. These issues were on everyone’s radar before COVID-19. Just weeks before the pandemic struck, I was speaking with, at the World Economic Forum. She had this to say about the growth of the digital economy: “The industry is going there whether we like it or not because it’s just more convenient, and it allows people to be more global. Everybody is going to have to embrace a digital economy.”
Based on my conversations with business leaders and my firm’s work developing professional services software across virtually every industry, it is clear that the digital economy trajectory has been accelerated dramatically due to COVID-19. Following are the three core areas where I see the steepest
post-pandemic digital adoption curves.
One area showing rapid growth even in the thick of the economic downturn is predictive analytics and business intelligence. According to a recent, 49% of large enterprises are either launching new analytics and business intelligence projects or moving forward on projects that had already been planned.
This, of course, makes sense. The COVID-19 crisis is unlike any other before it. Accordingly, traditional econometrics have not accurately captured the impacts of COVID-19 on business. Consider the fact that nearly 300 large corporations within the S&P 1500by April 10 of this year. Conventional forecasting simply couldn’t compete with COVID-19.
Companies navigating their recoveries need advanced predictive analytics that go beyond conventional econometric measures to understand the impacts of this unprecedented crisis. To do that, they are going to need to be able to track disparate data on government and regulations, consumer health and behaviors, industries, and the macroeconomy to identify key thresholds on the path to the future. AI-enabled business analytics, with its power to find meaningful linkages and connections between seemingly discreet data points, are tailor-made for this task and will see significant growth in this sector in the coming months.
A new report frommade it clear that the remaining hold-outs have already started to make the transition. Through the first quarter of 2020, corporate spending on cloud infrastructure services reached $29 billion, a 37% increase over the same quarter last year. The pandemic made it crystal clear: companies that were already on the cloud made the transition to work-from-home look effortless. Those that weren’t were left to deal with clunky virtual private network connections and cyberattack-prone remote desktop log-ins as they tried to keep things running in the work-from-home world with one foot still stuck in the office.
In the months to come, expect the cloud to be one area of the IT budget that will be immune from the budget cuts that are affecting nearly every other area of corporate spending.
Sustainable Remote Work Solutions
Work-from-home has been the big winner of COVID-19. While most professional services-oriented firms had already made work-from-home capabilities available to certain employees for years, no one thought we’d be able to move the entire global workforce into their living rooms and spare bedrooms without suffering some damage. Turns out, we could.
The new potential for the virtual workplace is starting to sink in at the absolute highest levels of the corporate world. It will affect everything from commercial — and residential — real estate to cybersecurity planning and training to product development. The growth of the aforementioned virtual insurance claims reporting technology is also tied to this trend.
With many large companiesthat they will not re-open major office locations after the pandemic, and some governments even contemplating making , we’re rapidly building an expectation that everything should be able to be done remotely. Things like inventory audits, real estate appraisals, doctor’s appointments, trips to the DMV — they will all be pushed to the cloud.
Accordingly, we’re also going to need to develop user-friendly interfaces and cybersecurity protocols that can keep pace with this growing reliance on digital communication as well as heavily investing in the bandwidth to make it all possible.
These three areas — predictive analytics, the cloud, and sustainable remote work technologies — will define capex spending in professional services for the foreseeable future. How well we manage that spend and address all of the ancillary issues that come along with it will determine how effectively we manage the next crisis. We’re slowly managing to get through this crisis, but we need to be prepared for the next one. This is not an area where we can afford to cut corners.
Brian Peccarelli is co-chief operating officer of Thomson Reuters.