Bain Technology Report 2020 highlights Covid-19 ‘catalyst’
At the turn of the year, few people could have predicted the global turmoil and devastation caused by Covid-19. The devastation also created an opportunity for growth as people around the globe pivoted to a life more virtual – made possible by technology.
Commentators claim the digital transformation was brought forward a decade in just six months, yet most technology companies haven’t drastically altered their existing plans, according to Bain & Company.
One of the clearest examples is that the long-term shift from on-premise to cloud computing continues to be a critical priority, according to a cross-section of IT decision-makers Bain surveyed monthly since March (see Figure 1).
“When the crisis hit, companies paused many of their IT investments,” says the report. “Early in the pandemic, IT decision-makers said they expected decreased spending on software maintenance contracts and on-premise IT to continue at least through 2021. The expected spending reductions have only grown more pronounced as the pandemic has unfolded.
“It wasn’t all belt-tightening. IT decision-makers said they immediately boosted spending on cloud-based security and software-as-a-service for remote work in the wake of the pandemic. They expect their cloud budgets to continue growing over the next year and beyond.”
Meanwhile, the pandemic has highlighted the need for resilience (see Figure 2).
Retooling the supply chain has become an urgent priority in a quest to make them stronger as well as cost-effective. The disruptions due to Covid-19 have shown how far technology supply chains have been stretched in an effort to achieve lean – shortening cycle times, concentrating production, and reducing costs and inventory.
The report says companies are accelerating and scaling up experiments with robotic process automation, artificial intelligence and other advanced automation tools.
“Technology has always moved fast, but the transformation across the industry has accelerated faster than some in the industry thought possible,” states the report. “Like past crises, this one will favour those who boldly adapt and extend new ways of operating.”