Companies are using tech lessons from the pandemic to advance digital transformation

A new report from Microsoft found that companies see an increased responsibility to use technology to help workers and society at large.

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Companies that had the digital tools to meet the demands of the pandemic are now ready to move into phase two of digital transformation, according to a Microsoft executive. This means seeing a return on investment from cloud infrastructure, remote work tools, automation and machine learning.

Deb Cupp, Microsoft corporate vice president of worldwide commercial industries, said that the first phase of digital transformation is establishing a cloud-based infrastructure. Companies that had passed this milestone before 2020 were better prepared to cope with the pandemic and are now ready to realize the benefits of this transformation.

“Now companies are figuring how to use AI and ML and how they benefit from common data models to get better business insights,” she said. “They are a click ahead in the process of getting business value from these platforms.”

SEE: Digital transformation tops service management as main business priority in 2020 (TechRepublic)

Microsoft released a new report today, “The transformation imperative: Digital drivers in the COVID-19 pandemic,” that examines how companies accomplished this. Microsoft commissioned the report from the Economist Intelligence Unit to examine how business leaders view the impact of past, present and future technology investments as a catalyst for change.

Cupp sees edge computing as one of the biggest values for companies.

“Companies are thinking about new business lines that they couldn’t have done before, and this is going to continue to create an acceleration,” she said. “The pandemic created enough of a shock to the system that there’s a recognition that you can’t go back.”

Cupp included Unilever, Honeywell and GM as examples of companies that are moving into the next phase of digital transformation.

“Unilever is spending a lot of time thinking about digital twins,” she said.

A Microsoft blog post about Unilever’s digital transformation explains how the company is using data, automation and digital twins to improve the production process. Unilever operates eight digital twins across North America, South America, Europe and Asia and streams data from 15 of its 300 global plants. Unilever’s engineering team built the twins in partnership with The Marsden Group, a Microsoft partner. The machines and equipment in the factory send production data to the model, which learns over time and uses this knowledge to change the manufacturing process. The digital twins have already improved the production process, according to the company:

“…the digital twin has used data on how long it takes to produce one batch of liquid, such as shampoo or detergent, to predict the correct order of processes in order to get the most efficient batch time. The less time each batch takes, the higher the production capacity of the plant, fully utilizing the asset and avoiding having to invest in capability elsewhere.”

The report is based on a cross-industry survey of 800 senior business executives and senior-level government employees in the Americas, Europe and the Asia-Pacific region. The report focused on five elements of organizations’ technological infrastructure:

Supply-chain adjustment
Remote work and collaboration
Risk modelling and predictive analytics
Real-time decision-making
Employee safety monitoring

Remote work: Engagement vs. isolation

The survey highlighted the double-edged sword of remote work: 34% of respondents said the biggest concern was isolation even as 40% reported increased engagement.

Cupp said that there is no question that people are tired. She expects technology to continue to be the connective tissue for companies figuring out what hybrid working arrangements look like.

“Companies will use technology to build an inclusive environment for people working from home and those back in the office,” she said. “Technology will be the piece that holds everyone together.”

Reskilling and social responsibility

One conclusion of the study was that tech capabilities such as digital twins benefit both companies and society at large. The study authors recommend that corporations develop public-private partnerships to improve training and education opportunities. Respondents selected skill-building as the biggest benefit to society at large from digital transformation.

The survey reflected a broader theme of increased social responsibility with 76% of respondents stating that the pandemic has placed fresh responsibility on companies to play a constructive role in wider society. The majority of respondents (75%) also believe that digital transformation needs to pivot from enabling business success to supporting broader societal improvement.

The survey found that this benefit could cover a broad scope of issues:

Automotive respondents were far more likely to say that digital transformation in their industry could benefit climate change (41% compared with a survey average of 23%)
Government respondents cited public safety at the highest rate for the same question (38% compared with a survey average of 27%), reflecting the importance of technology and data for policing, transportation and healthcare
Manufacturing respondents see diversity and inclusion as a benefit of their own digital enhancements and a way to provide new career pathways for a workforce that is reinventing itself
Retailers were the most likely to believe their own digital evolution would benefit employment which suggests that technology would enhance not replace the workforce running shops and storefronts

However, only 54% of all respondents participate in initiatives with secondary or primary schools. The study authors suggest that closer engagement with younger people could be key in shaping education and career trajectories at an earlier point.