COVID-19 Is Supercharging The Digital Transformation
The pandemic has instantaneously forced countless people around the globe to forgo person-to-person contact in favor of digital alternatives. That's (mostly) good news.
PARIS — In mid-March, a major bank sent a message to thousands of its small suppliers. The bank is really sorry…but it will not accept any paper invoices during the pandemic. Only documents sent by e-mail will be processed.
For many of the suppliers, the surprise wasn't so much the sudden policy change, but the fact that until now, they'd still had to print out their bills, write a little note, slip it into an envelope, stamp it after checking that it weighed no more than twenty grams, and put it in a letterbox. And they'll be even more surprised if, when the epidemic ends, they're told to go back to this obsolete process. After all, it would not be the first time that a provisional measure, decided upon under exceptional circumstances, becomes definitive.
The health crisis is giving a tremendous boost to digitalization, and for one simple reason: The virus that has already claimed more than 100,000 lives is spreading through human interaction. A kiss or a handshake, a sneeze, a door or elevator button, and maybe even a letter... the disease only spreads through face-to-face or personal contact.
That's why governments have decided to confine more than half of the world's population. Information could, however, be spared from the lockdown. The virus is physical, not virtual. Going digital is therefore the most radical and effective barrier. That is why digital tools are now taking hold at unprecedented speed, building on the massive investments made in infrastructure, businesses and homes in recent years.
Teleworking is probably the most visible side of the shift. From one day to the next, millions of employees were asked to avoid their offices and work from home instead, via their computers. "With the coronavirus, most of our five-year transformation plan had to happen in one week," said Jason Oliver, director of information technology at the University of Sussex, where 3,000 employees and 19,000 students went digital — over the course of a single weekend, as reported by ZDNet.com.
The numbers are spectacular. Zoom, which offers online videoconferencing services, now has more than 200 million users every day, compared with just 10 million at the beginning of the year. Teleworking is certainly not a panacea. Crowds of employees are lost along the way. The myriads of micro-decisions, once taken over a coffee or when bumping into each other in the parking lot, are becoming much more complicated.
But teleworking has suddenly become the norm. In the United States, where everything usually moves faster, some companies have already announced that they will be terminating their leases for thousands of square meters of office space. To keep in touch, they plan instead to hold conventions with their employees several times a year. A survey of 300 CFOs, conducted at the end of March by the research and advisory company Gartner, revealed that half of them will let at least 10% of their employees work from home after the epidemic.
In retail, the shift is almost as fast. The share of French people shopping online has almost doubled in one month to 20%, according to a research agency Kantar. And Amazon isn't the only company involved. Far from it. Traditional walk-in retailers are going digital too, taking online orders and either delivering merchandise, or preparing for customer pick-up.
Even more striking: these distribution techniques are also developing very quickly in business-to-business trade. For example, the French brand VM Matériaux has reopened points of sale for building materials on a drive-through basis only.
Print media are no exception to this digital acceleration. With the closure of many newsstands and the sporadic operations of the postal service, paper newspapers are losing readers, many of which they might never recover. Advertising has collapsed. At the same time, "page views' on the Internet have exploded. The magnitude of the transition is dramatic. Many newspapers won't survive because their current business model simply can't adapt so fast.
The epidemic will shift the boundaries on the protection of personal data.
Even areas that used to seem resistant to the digital revolution are now making a U turn. Such is the case of the film industry, which had refused to award prizes to films that were intended not for the big screen but for Netflix. With the closure of theaters, the industry suddenly demanded that new films be immediately available on video-on-demand, thus bypassing an essential step in the "media chronology" it had previously insisted on.
The epidemic will also shift the boundaries on the protection of personal data. Many French people will agree to lose control over their data if they can regain their freedom of movement in exchange. The barriers to the digital transition are being lifted, and the acceleration will be powerful. It could bring massive efficiency gains. But it's also going to bring casualties.