What’s the Influence of the COVID-19 Pandemic on the Digital Transformation?


The COVID-19 pandemic enforced us to change our everyday lives and adapt to the new normal. The majority of businesses had to change their technology strategies to adapt to the evolving conditions. Remote working became the key way to continue their business operation. With the adoption of remote working, the open question is: how to stay competitive in this new business and economic environment?Companies that succeeded during the crisis caused by COVID-19 name a few things that helped them to stay afloat: filling gaps for technology talent, the use of more advanced technologies, and speed in experimenting and innovating. 

Digital Transformation as the Main Effect of the COVID-19 Pandemic 

Even before the pandemic began, digital technologies played an important part in businesses across all industries. Companies strive to automate repetitive processes, optimize operations to gain better productivity, and develop workforce flexibility. The pandemic has accelerated the adoption of digital transformation and forced manufacturers and service providers to convert traditional in-person operations into digital ones. In the shortest time, companies employed software solutions to continue their businesses while working from home. Those who managed to transfer their business processes to the digital environment have survived after 2020’s COVID-19 lockdown.  

The research conducted by Mckinsey states that the respondents adopted digital changes 20-25 faster than they would have been expected. In particular, it relates to remote working: the respondents thought their businesses were able to implement solutions for remote working 40 times faster than expected in the pre-pandemic times. Thus, companies created a digital environment for employees to continue their jobs from home.  

Powered by the pandemic, unprecedented digital acceleration happened due to prioritization. Companies had to adapt to the new conditions to survive during the pandemic. When the implementation showed positive outcomes, they understood that perfection is not required when technologies are introduced. Prioritization is what drives digital transformation. The pandemic forced companies to eliminate all barriers that held back on digital adoption. For example, companies worry about network security when allowing their employees to work from home.  

Key Digital Transformation Trends Caused by the COVID-19 Lockdown 

The Inevitable Shift to Remote Working 

Before the pandemic, many business owners felt skeptical about remote working. They didn’t believe that employees could be as productive from home as working in the office. Still, in the pandemic time, businesses had to quickly respond to the governmental restrictions related to in-person communication. To continue their business, they needed to go online and work remotely. 

They found new ways for their staff to collaborate and complete work while working from remote locations. Businesses began to adopt tools for online collaboration, videoconferencing, task management, and time tracking.  

Rapid Transformation of the Entire Enterprise Infrastructure 

In the pre-pandemic period, most companies used on-premise solutions to keep data on local servers. The emergence of coronavirus and shifting to remote working caused organizations to reconsider their infrastructures. Though remote working seemed an advantage to many employees, most businesses were not ready to arrange it to ensure all the operations and processes are executed well. 

Businesses had to move towards cloud migration to stay on the rise during the lockdown. As Microsoft CEO Satya Nadella noted, the company had seen two years of digital transformation in two months as its clients began to adopt cloud solutions. 

Why did COVID-19 accelerate cloud adoption? As Forbes states, business resilience is one of the reasons for accelerated cloud adoption. To resist the COVID-19 crisis, companies needed to place the following factors on top of the challenges they thought they would have met:  

  • Flexible computing power,  
  • High availability,  
  • Disaster recovery, 
  • Lower cost for backup and disaster recovery,  
  • Resilient core for business process and business continuity,  
  • Legacy skill risk,  
  • Remote workforce management,  
  • Safe return to the workplace,  
  • Business agility. 

Remote working is one of the key factors that contributed to cloud adoption. Remote working emphasized the necessity for cloud migration for better collaboration with remote workforces. 

Increased Demand for Software Development 

With the acceleration of digital transformation, the demand for software development has increased. Because of accelerated digital transformation, the demand for software increased. According to Statista, businesses revised their spending on software during the COVID-19 outbreak. Another Statista’s survey revealed that though they reduced investment in certain software, they increased spending on other software such as remote work solutions. The other groups of software that were are in demand during the COVID-19 pandemic include: 

  • Web conferencing software 
  • Collaboration tools 
  • Remote desktop tools 
  • Security software 
  • Learning management software 
  • Time tracking tools 

Digital Transformation and IT Outsourcing 

After companies realized they needed to respond sustainably to the COVID-19 crisis, they turned to IT outsourcing providers. The demand in IT outsourcing services was intensified by the accelerated digital adoption to address all the challenges and stay resilient during the crisis.  

By trying a remote work model in their businesses, organizations recognized its efficiency, so the pandemic reinforced the advantages of IT outsourcing. Forbes announced several reasons why the pandemic led to an increase in IT outsourcing that is as follows: 

  • COVID-19 speeded the adoption of digital technologies by about six months on average. Since businesses changed their priorities during the crisis and needed to deliver remote work solutions faster, they turned to IT outsourcing companies. 
  • The necessity for remote working helped to overcome most of the concerns about it, regardless if the remote team is in-house or external. Different studies show that the productivity of remote teams increased during the pandemic. Once they realized that they were able to collaborate with remote teams without compromising on productivity, they turned back to IT outsourcing. 
  • When companies need to save, outsourcing is the best way to apply. By hiring a remote offshore team, they reduce all the associated costs, including office rental and maintenance payments, taxes, spending on utilities, etc. 

Final Thoughts: What’s the Future of Digital Transformation After the COVID-19 Pandemic? 

Many people wonder if we get back to the old normal after the pandemic is over. What will happen to all the changes made in response to the pandemic? The answer seems to be obvious: they are likely to remain in the post-pandemic period. Companies will continue to adopt technologies they have already invested in and implement others to expand their business flexibility. For instance, companies will allow hybrid working to their staff, allowing them to combine WFH with the work in the office. Many world leaders have already adopted a hybrid model in their workplaces, and one of the first companies who announced it was Google.   

Moreover, businesses understood that technologies don’t just reduce costs but help stand out over competitors as well. Since they realize the necessity to gain advantages over competitors, they will continue to invest in digital adoption in the longer term.  

Thanks to the pandemic crisis, IT has become an integral part of digital transformation. Businesses will continue to turn to IT outsourcing providers as they recognize the benefits of cooperation with them.  

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