Digital Value Creation

The New Digital Expansion

July 15, 2021 Tamas Hevizi
Digital Value Creation
The New Digital Expansion
Show Notes Transcript

My latest post is on the massive post-pandemic digital expansion due to labor shortage and massive economic growth.

While businesses focused on cost and lean operations last year - now it is all about growth, and major digital expansion.
Companies are moving from tactical to the strategic use of automation, analytics, and customer experience like never before.

This is 2021 and the economy in the US is in a massive growth mode. While businesses focused on cost and lean operations last year - now it is all about growth, and yes, major digital expansion.
Companies are moving from tactical to the strategic use of automation, analytics, and customer experience like never before.
Let’s see what’s happening.

Everywhere you look right now the economy is booming. The US is expected to grow by 7%, the highest in recent memory. Europe is not far behind at a projected 5% growth -  a record in 45 years! Estimates in Asia are even higher. The world economy is on a tear. We don’t know how long the boom is going to last but one thing is clear. It helps accelerate the digital transformation that started last year. Digital transformation is becoming core to what businesses do.

There are several elements of the perfect storm for digital. Accelerated business growth and severe talent shortage.

With the economy on a massive growth trajectory, there are changing demand patterns and supply chain problems. Many companies moved to predictive analytics that helped them anticipate future disruptions. There is now even a trend of prescriptive analytics, which not only anticipates the business problems but makes recommendations on how to fix them. This is not just a play on words.  AI and software robots are taking over responsibilities for anticipating and correcting problems before they happen. Predictive analytics has been used in operations for a long time. Now prescriptive analytics is in play to anticipate sales and supply shortfalls and possible corrective actions. AI and machine learning are being trained on vast amounts of data to be able to make predictions and take action. And the results are promising.

Businesses can’t hire enough people to support the growth. Frankly, they cannot even find people to fix the broken processes.  There is a massive talent shortage that I covered in my last video. I spoke with some CIOs and CTOs who had to put many projects on hold because they can’t find enough experts to do them. Not having enough staff forces businesses to digitize even more processes and automate more tasks just to keep the business running. This has also been a boon to artificial intelligence. Executive teams are willing to deploy more technology to augment the missing workforce. 

A few months ago many predicted business going back to the pre-pandemic normal. I thought so too. I thought some of the digital momentum from last year would slow down. 
That’s clearly not the case. In fact, digital projects are accelerating further, companies are thinking bigger.

This is how a private equity investor put it. Previously digital was a project you did. Now digital became how you do everything you do. I have to agree. It feels like the majority of companies are making digital core to their strategy.

There are 3 major shifts I’m seeing right now in digital transformation:


As businesses turn to sales growth, digital projects also focus on areas of expansion: Digital marketing, sales analytics, digital-enabled selling, autonomous commerce, and AI-enabled contact centers are all at the forefront. A year ago businesses were hunkering down, automation and AI were used to optimize operating costs, keep labor costs low and provide lower-cost customer support. The same digital technologies were keeping businesses running lean and products being shipped on time. Now it is growth, growth, and growth. With no people to find, more automation augments the ranks of business operations, customer support, and business planning. 


I spoke a lot in this channel about the limited business value of digital experiments and small pilots in digital transformation.  They solve small, tactical use cases and they simply do not move the needle. 
This year companies are asking bigger questions, like what is the art of the possible from digital? How much more growth can we drive from new digital services? How much more pipeline can be developed from better customer experience? How much more accurate can our sales forecasts be? How can we improve customer service with automation? 
There is a clear shift from Why Do Digital? to How Much Growth Can We Possibly Drive from Digital Transformation?


During the crisis there was clear urgency to deploy technology to keep the business running well. Now there is an urgency for digital tech to help drive business growth. In fact, there is an expectation that to fix any business challenge or disruption, we will turn to technology. Now. Not later.

The biggest legacy of the last 18 months may become the global shift to digital-first mindset. If technology can help in a downturn and can help us grow then every successful business at its core will be a digital business.

And my investor friend will prove to be right: Digital is simply how you do what you do as a business.