The Digital Transformation of Business, and What MBA School Students Should Know

“Necessity is the mother of all invention” is an apt expression for describing the state of the world’s business landscape, in many ways forever impacted by adaptations made as a result of the pandemic. Some brick and mortar operations unaccustomed to the digital world have suddenly found themselves forced to switch over to online channels to survive. Others well-seasoned in digital approaches may have still needed to completely revamp their strategies to accommodate an increase in demand for online services. In this new climate, some companies have moved over to digital exclusively in an effort to remain resilient, with others finding innovative ways to develop unique hybrid models for operating. To understand more about the impact of this transformation, let’s examine the current digital landscape more closely based on recent research.

The COVID Era Has Massively Accelerated Digital Transformation

While many nations had already become well ingrained in the digital world prior to COVID-19, the pandemic has sped up its adoption significantly for many others. Those taking business courses will be interested in the results of recent surveys, showing the acceleration of digital technologies to have already advanced the practice by many years across the globe.

A McKinsey Digital survey of 20,000 European consumers, as an example, revealed that digital adoption across Europe increased from 81% to 95% as a direct result of the global pandemic. That’s thought to represent a leap that would have taken between two and three years to achieve across industries under pre-pandemic rates of growth.

Another recent McKinsey Global Survey of executives reveals the transformation to be occurring at both the organizational and industry level, with respondents three times more likely to report more than

80% of customer interactions to be digital in nature. That same survey noted a seven-year increase on average in the rate at which businesses are developing digital products and services.

Reported Benefits of the Transformation for Students in MBA Programs to Ponder

While some businesses have found the change to be devastating to their bottom lines, many others, especially start-ups, have found the need to shift into online services or e-commerce to be an interesting foray into a previously underexplored domain. Some executives noted they were able to respond to COVID-related changes much faster than anticipated, with many of the companies surveyed acting 20 to 25 times faster than expected. Remote working saw an even quicker implementation for a number of companies, adopted for many respondents up to 40 times faster than they thought possible for such action pre-pandemic.

Many companies reported taking an average of 11 days to implement a workable solution, with most others taking no more than a few months to have an active plan in use. The result has been an eye-opener for many in observing just how much can be achieved in a very short time. It’s also been an affirmation for many of an ability to demonstrate resilience amid the most urgent of conditions - something many businesses theorize about, but never have the chance to attempt in reality.

Many of the Changes Could Prove to be Long Term

While the re-designed digital format of many businesses has been introduced to adapt to the new marketplace reality, those attending MBA school will be fascinated to learn that for many, the change is likely to stay. Respondents of the McKinsey Global Survey of Executives said they believe the changes will be long lasting, and report prioritization of funding for digital initiatives.

Survey respondents reported the most significant changes to be represented by increases in remote working, a rise in customer preference for digital interaction, and a significant migration to the cloud. The majority of the executives also expressed a strong belief that the changes are more likely to remain after the pandemic than a movement back to former operational practices—a brave business new world that appears likely to become permanent for many.

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