major brands are delaying investment in digital transformation when they need to bring it forward – Econsultancy

On the one hand, it is forcing a rapid evolution and reinvention of infrastructure and processes as almost everything shifts online: from food orders to grocery shopping, business meetings to entertainment.

On the other hand, the widespread global uncertainty, particularly in terms of the financial markets, and the loss or reduction of thousands upon thousands of jobs is causing many firms to rethink spending that they might otherwise have planned on technology and infrastructure upgrades and strategic initiatives.

A recent Econsultancy and Marketing Week survey that investigated the impact of the COVID-19 coronavirus outbreak on the marketing industry found that among 500 marketers working at major brands (earning more than £50 million in annual revenue) in the UK and North America, a full 91% (UK) and 87% (North America) predict an increase in the use of online services by consumers in the midst of the outbreak. Seventy percent in the UK, and 75% in North America, also predict an increase in ecommerce usage.

However, 47% of the same respondents (43% in the UK, and 51% in North America) admitted that planned technology or infrastructure spending in their own companies was either delayed or under review. A further 47% (41% in the UK, and 53% in North America) say that they have delayed or are reviewing strategic initiatives, such as digital transformation or restructuring.

Fifty-three percent of respondents (45% in the UK, and 61% in North America) have also said that planned new hires are delayed or under review – something which may further impact brands’ capacity for dealing with the crisis if they are unable to take on workers with the appropriate level of digital skills, or have put a freeze on new hires intended to support a digital transformation.

A caveat: while the survey was undertaken just a week ago, the situation with coronavirus has been changing at lightning speed, with many companies in the UK only just closing down their offices and beginning to reckon with the full business-hitting implications of the outbreak. Therefore, it is quite possible that if we re-ran the survey again today, the percentage of businesses who are delaying or reviewing spending plans would be even higher.

Either way, these figures carry worrying implications for businesses’ ability to cope with the additional demands on digital services and infrastructure during the ongoing coronavirus epidemic. On the one hand, scheduling a major website upgrade or an overhaul of legacy infrastructure – something which can cause issues even in the best of circumstances – in the middle of a period of financial uncertainty and high demand seems like a self-evidently bad idea. On the other hand, failing to proceed with a much-needed upgrade could see businesses struggling more or further losing their competitive edge in the longer term.

There’s no absolutely clear path forward. In the short term, businesses will be inclined to take whatever course of action keeps their company afloat, but it might be the time to shift to long-term thinking. The coronavirus epidemic has vastly accelerated a shift that was already taking place across every sector, from healthcare to retail, finance to leisure.

And while opinions are still divided on what the lasting impact of the epidemic will be even once things return to (relative) normal, the consensus is increasingly shifting towards the idea that there will be a lasting impact from this abrupt digitalisation, as consumers become used to availing themselves of digital services and form new habits.

The good news, such as it is, is that digital transformation was never meant to be implemented all in one go. It’s an iterative process that affects not just systems and technology, but culture and people, and while its exact timeline is a matter of debate, it certainly doesn’t happen overnight. On top of this, even ‘quick wins’ and small improvements are still wins and improvements, and could potentially alleviate a difficult situation for businesses as well as improving their competitiveness in the longer run.

While each brand should make a decision about whether to proceed with digital transformation or technological improvements based on their individual circumstances, now might be the time to get creative – as many businesses have already been forced to do, enabling remote working at speed or reinventing conferences as virtual events. What was once a ‘nice to have’ could now become a ‘crucial to have’.

And while short-term survival will always be a priority, in order for brands to thrive in the medium and longer term, it may be necessary to revisit digital transformation plans with a view to potentially bringing forward planned upgrades, upscaling digital infrastructure, or hiring for new skillsets in order to give themselves the best chance of competing in the current ‘new normal’.