Coronavirus BRIEFING

Digital Adoption Has Taken a ‘Quantum Leap’ Across Organizations and Industries, According to McKinsey

NEW YORK—During the second and third quarters of 2020, the COVID-19 crisis has brought about “years of change in the way companies in all sectors and regions do business,” according to a recent McKinsey report and analysis. Citing its new McKinsey Global Survey of executives, the consulting firm noted that the companies surveyed have accelerated the digitization of their customer and supply-chain interactions and of their internal operations by three to four years.

In addition, the share of digital or digitally enabled products in their portfolios has accelerated by “a shocking seven years,” McKinsey said in a post on its website.

“Nearly all respondents say that their companies have stood up at least temporary solutions to meet many of the new demands on them, and much more quickly than they had thought possible before the crisis,” according to the consulting firm. “What’s more, respondents expect most of these changes to be long lasting and are already making the kinds of investments that all but ensure they will stick.”

McKinsey noted that when it asked executives about the impact of the crisis on a range of measures, the executives noted that funding for digital initiatives has increased more than anything else—more than increases in costs, the number of people in technology roles, and the number of customers.

“To stay competitive in this new business and economic environment requires new strategies and practices,” McKinsey said. “Our findings suggest that executives are taking note: most respondents recognize technology’s strategic importance as a critical component of the business, not just a source of cost efficiencies. Respondents from the companies that have executed successful responses to the crisis report a range of technology capabilities that others don’t—most notably, filling gaps for technology talent during the crisis, the use of more advanced technologies, and speed in experimenting and innovating.”

The survey results, according to McKinsey, confirm “the rapid shift toward interacting with customers through digital channels. They also show that rates of adoption are years ahead of where they were when previous surveys were conducted—and even more in developed Asia than in other regions.”

Indeed, the survey respondents are three times likelier now than before the crisis to say that at least 80 percent of their customer interactions are digital in nature.