Covid-19: Building a Digital Bridge to the New Normal

Technology and analytics are key to weathering the coronavirus pandemic and

emerging stronger.

By Greg Caimi, James Anderson and Florian HoppeGreg Caimi, James Anderson and Florian Hoppe are partners in Bain & Company’s Technology & Analytics Group.

Greg is based in San Francisco, James in London and Florian in Singapore.

The authors would like to thank Laura Polasek and Vlad Solomon for their contributions to this article.

Copyright © 2019 Bain & Company, Inc. All rights reserved.Covid-19: Building a Digital Bridge to the New Normal

At a Glance

➢ The Covid-19 pandemic has forced a sudden economic shift from physical to digital.

➢ Companies can use data analytics and other digital tools to strengthen business resilience,

customer relationships, technology systems and operations.

➢ Executives who take proactive steps now can put their companies in a better position for

the new normal.

As the Covid-19 pandemic disrupts nearly every aspect of life, enterprises are turning to digital technology and

analytics to help them weather the crisis and prepare for new ways of operating and serving customers once

we reach the other side.

People are shutting in and businesses are shutting off in response to the pandemic. That has sparked a sudden

economic shift from physical to digital. This is true both for interactions with consumers (online marketing and

sales channels, digital products) and the way companies operate (remote working). In Italy, for instance, the

lockdown has significantly boosted online shopping, with many people making digital purchases for the first

time. Meanwhile, app-enabled food and grocery delivery services across Asia are experiencing an

unprecedented surge in demand, and some ride-hailing companies and taxi services have pivoted drivers to

deliver food and other items. Beyond the immediate fallout of the crisis, it has become clear that some of these

shifts are here to stay: Covid-19 is radically accelerating the digital future.

Many organizations have circled the wagons to navigate the pandemic, focusing first and foremost on ensuring

the health and safety of their employees, and second, on adjusting their businesses to best serve customers.

Many are deploying critical measures such as war rooms to accelerate decision making and technology to

maintain business continuity.

These are good starts. But business leaders are now thinking strategically about ways to use technology and

data to proactively retool their organizations to prepare for the new normal. We see six critical areas in which

executives can refine their digital roadmap to put themselves in a stronger position for the long term.

1. Build a digitally enabled war room

Companies’ Covid-19 war rooms would benefit from technology that increases transparency and

responsiveness, and better, near real-time data to support effective decision making. Examples might include

implementing digital tools to closely track customer sentiment and behavior, increase supply chain

transparency and responsiveness, and replace traditional planning methods with advanced scenario- and

trigger-based planning. These tools will outlast the pandemic and give companies capabilities needed to

accelerate out of it.Covid-19: Building a Digital Bridge to the New Normal

2. Overhaul forecasting to adapt to a rapidly changing environment

Businesses should set aside traditional demand forecasts, which are no longer accurate and aren’t cut out for

the changes underway. We recommend replacing them with scenario-planning techniques that are

sophisticated and data-driven. Human judgment will also be critically important, particularly when a company

has been using machine learning models that rely heavily on outdated demand patterns.

Leading firms will incorporate a wider range of data sets than typical in order to build actionable plans across

a broad range of outcomes. This will help organizations adapt to the uncertainty around Covid-19 and the

complex reactions of customers, competitors and governments.

3. Build new customer relationships through effective digital experiences

With many people quarantined in their homes, digital experiences matter more than ever. Leading companies

will identify the ones that matter most and improve upon them to build new and stronger customer

relationships. In other words: Follow your customers during the pandemic, then lead them out of it.

This requires understanding the massive shift to online marketing, sales and communication channels, not only

in retail, but also in sectors such as insurance, banking and healthcare. Leaders will make rapid improvements

to their digital channels, starting with eliminating bottlenecks and prioritizing increasingly important customer

“episodes,” such as late payments, cancellations and moves to online service.

Data should underpin all of this. Effective use of it can help companies gather customer feedback and insights

so they can quickly test ideas, learn from them and form stronger bonds with customers.

4. Invest in technology with an eye toward the future

Most companies have taken steps to ensure robustness of their IT systems to enable remote work and

operational resilience. Some have also begun to defend against new cyber threats that have emerged during the

crisis. These are both critical priorities.

But leading companies will go a step further, investing in their technology architecture to accelerate their digital

transformation and put themselves in a stronger position coming out of the pandemic.

Plenty of companies have made similar moves during or immediately following previous economic downturns

(see Figure 1). For example, Amazon switched from a monolithic to a microservices architecture in 2001, which

made its software development teams more nimble and helped pave the way for the creation of its successful

Amazon Web Services business. Or consider Commonwealth Bank of Australia, which began replacing its core

banking system in mid-2008, resulting in its becoming one of the first major banks in Australia to offer truly

real-time transactions.Covid-19: Building a Digital Bridge to the New Normal

Figure 1: Companies that invest in technology during or immediately following economic

downturns can emerge stronger

Companies that embark upon substantial IT projects now can start by conducting a sober assessment of their

current state. From there, it will be critical to prioritize the technology project backlog to aggressively

implement projects that advance the new strategy. And through it all, leaders won’t take their eyes off security

for a second.

5. Accelerate automation

Leading firms will accelerate automation efforts during the crisis, simplifying as they go and using data to

determine critical areas of investment and potential cost savings.

During times like these, it’s important to focus on processes of the highest value and urgency where

automation can be deployed quickly. Lower-priority automation projects can be put on the back burner and

revisited when there is more stability.Covid-19: Building a Digital Bridge to the New Normal

6. Embrace the agile, distributed workforce

Leaders are quickly building new ways of working for their distributed teams that reduce costs and enable

their businesses to move faster. This entails deploying digital tools that go beyond teleconferencing to

improve how the organization plans, collaborates, innovates and executes. As a result, these new ways of

working already have many businesses feeling more, not less, efficient. (Read more in our Harvard Business

Review article about how leading companies have embraced Agile principles.)For more information, visit www.bain.com

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