History shows that companies that tech-enable their businesses during a recession tend to become more resilient to future shocks
Amid the slow recovery of COVID-19, it may be tempting for companies to stick with what is comfortable and delay ambitious digital transformation projects until more stable times. However, according to GlobalData’s report, tilted Tech, Media & Telecom Themes 2021, this would be a mistake. History shows that companies that tech-enable their businesses during a recession tend to become more resilient to future shocks.
The report states that enterprises have taken a conservative approach towards IT spending in 2020, with larger transformational projects unlikely in 2021. However, the world of ‘remote everything’ should prompt organizations to accelerate digital transformations.
Cyrus Mewawalla, Head of Thematic Research at GlobalData, comments: “Targeted, tactical digital transformation will be vital for companies to survive in the new world. This is good news for IT services, infrastructure and application software companies, which have struggled in 2020 as many enterprise IT projects have been delayed, scaled back, or cancelled.
“The way we work, shop, eat, seek medical advice, socialize, and entertain ourselves has fundamentally changed, and there is no going back. Like all industries, the technology, media, and telecoms (TMT) sector must plan for multiple eventualities.”
Tech companies have long recognized that spending rather than saving is the way to survive recessions. In 2008, Intel’s decision to continue to invest in research and development (R&D) in the recession put it several years ahead of competitors. The company was adamant that you cannot save your way out of a recession.
GlobalData predicts that to aid in COVID-19 recovery, companies will rely on multiple technologies ranging from cybersecurity to cloud computing, automation, Internet of Things (IoT) and Artificial Intelligence (AI) to recover from the COVID-19-induced economic downturn that is likely to be deep and prolonged.
For example, robots will increasingly be used to perform a broad range of functions, from cleaning supermarkets and offices to delivering packages and even offering comfort and support to the sick. Meanwhile, AI is already being used to automate routine business processes, saving time, reducing operating costs, cutting out errors, and increasing productivity. Automating mundane day-to-day activities and obligations contributes to more efficient use of labor, with workers able to focus their time on higher-value tasks.
Mewawalla continues: “No-one could possibly have predicted the seismic shock COVID-19 has caused to the world. However, what we do know is the world relies on technology, and it will be the beating heart of its recovery.”