UK organisations are facing tension between short-term needs and long-term digital transformation goals

How recent events have impacted digital transformation in the UK, and the steps business leaders can take to overcome existing barriers to innovation

IDGConnect_digitaltransformation_ITmanagement_shutterstock_524133994_1200x800
Shutterstock

This is a contributed article by Pip White MD for Google Cloud, UK&I.

The last year has seen rapid change for most global organisations. With much of the world experiencing some sort of lockdown throughout the year, businesses of all sizes found themselves quickly transitioning to a remote workforce and adopting new ways to collaborate.  At the same time, the UK was working towards completing its exit from the European Union.

For many UK enterprises this meant balancing the immediate pressures of these two events with long-term digital transformation and innovation strategies. A recent study by IDG found that UK organisations have faced tension between responding to events that have required reactive measures and their more long-term innovation goals. 

Heading into 2021, it’s become clear that IT leaders must ensure that the urgency to adapt to the practical challenges posed in the last year does not threaten future IT priorities and business objectives. For many the answer lies in the cloud and supporting technologies, which will play a key role in supporting key initiatives. But first it’s important to understand how the pandemic has impacted digital transformation in the UK and the steps that IT and business leaders can take to overcome existing barriers to innovation.

Immediate impact on the industry

IDG asked IT leaders across Europe how the pandemic has impacted the way they work and what initiatives businesses introduced to support remote working.

For context, the study found that 51% of organisations ranked as “digitally forward”, suggesting that they were either completely digitally transformed or on the way to being transformed. This was significantly lower than 67% in France and 62% in Germany, suggesting that the UK is perhaps lagging behind in this regard. Interestingly though, less than a third of UK business leaders said that the COVID-19 pandemic heavily impacted their organisations, whereas in the rest of Europe it was slightly higher in French (33%) and German (34%) organisations.

When looking deeper at UK IT leaders’ approach to their organisations’ priorities, this is where the “growing disconnect” between short-term reactive decisions and long-term objectives started to become more apparent. When the pandemic was spreading across the world, unsurprisingly over half (58%) of UK organisations started to introduce initiatives to improve remote working and support employee communication and collaboration.

However, with the industry also preparing for Brexit, there were signs of belt-tightening and a focus on maximising returns from existing IT infrastructure - over a third (36%) of organisations launched or hastened the optimisation of existing products or services. Further results found that the UK was more cautious in accelerating some technologies over others. For example, perhaps more innovation-centric technologies such as automation and analytics were lower on the list of priorities - likely down to a number of factors including cost, regulation and skillset.

On the other hand, nearly 40% of businesses accelerated or launched initiatives around digital customer experience and cloud-native software development. The findings show that IT leaders opted to pursue some digital initiatives at the same time as slowing or canceling efforts in similar areas.

Shifting priorities across all industries

Maximising existing products and services in the wake of the pandemic appeared to be an industry-agnostic exercise. In the retail sector, organisations prioritised customers by focusing on customer service and support, with acquisitions and retention next in line. Moreover, product lifecycle management and store and facilities operations also became a top priority for the retail industry in 2021 - pointing to growing concerns around dealing with the ongoing uncertainties around demand.

In other verticals, forward-looking priorities such as product and service development, which originally topped the list for organisations in 2020, went down to sixth place for 2021. This trend was particularly evident for the financial services and healthcare sectors, where it fell by 16%, indicating a nervousness around what the impacts of a post-pandemic environment could potentially have on their business. At the same time, it also nods to potential uncertainty over the future of the free flow of data within the EU.

Sales and marketing was on the opposite trajectory however, rising from fifth place in the list of 2020 priorities to first place this year. This was particularly evident in the manufacturing, industrial, transportation and logistics sector where sales and marketing increased by 20% from last year. As businesses try to recoup lost sales and revenue from months of closures or disruption, it’s perhaps unsurprising that they are putting renewed efforts into their sales and marketing functions.

Cloud as the solution

So, what can businesses do to ensure they can respond to reactive events such as the pandemic but also ensure the longer-term alignment of IT priorities? This challenging time has introduced an opportunity for IT leaders to embrace emerging technologies such as the cloud.

Cloud computing has played an important and distinguishable role within the IT ecosystem and enabled millions of people around the world to continue to operate and work from home over the last year. It’s no surprise then that 67% of UK business leaders have leaned on cloud providers for support to help them shape their business objectives and digital approach to better respond to the headwinds of 2021.

The effects of the pandemic disrupted the working landscape last year which had meant that UK IT leaders had to rethink their working strategies. Across the board, the survey findings have revealed that there are no doubt tensions between the short-term business needs brought about by the challenges the UK faced in the last year, and the need for digital transformation in the long term. Over the course of 2021, we’ll likely see IT leaders continue to battle this conundrum.

Whilst the long-term impacts of the last year are somewhat uncertain, what’s clear is that many businesses are turning to the cloud as a solution to this disconnect and a business-critical tool for a digital-led future.