09 June 2020

Covid-19 and technology: the systemic shift

Whilst no one can say how long the current crisis will last, it is clear that the impacts will be far reaching and society changing. Roland Emmans, Head of Technology, HSBC UK, considers what the future could look like and how the UK tech sector and wider world of business is being reshaped by CV-19.

Much of what we are hearing from customers and observing ourselves is an acceleration or repurposing of existing themes in the tech sector and beyond, so we are referring to the changes driven by CV-19 as a Systemic Shift.

We have split this Systemic Shift into five groups, all of which are hyper-connected and dependent on each other. In this article, I’ll look at four of those groups and I’ll return to the theme of the ‘new contact-free economy’ next time.

1. Flexible working: new habits & behaviours are likely to stick around

We owe a lot to technology. Since the UK entered lockdown on 23rd March, technology has allowed many businesses to continue to operate remotely, kept us connected to our loved ones all over the world and has supported the NHS’ fight against CV-19. Technology has allowed us to overcome the barriers of physical distance to a large extent, with virtual quiz nights, kids Zooming their friends and virtual drinks all becoming a common vernacular.

We are all now equipped and accustomed to remote working and running virtual meetings, and it may be that employees want to retain an element, or all, of this new way of working in the future. We are starting to hear businesses ask themselves some key questions around how they will operate in the future, for example:

  • Is it time to consolidate office space and promote flexible working?
  • Should we have a distributed office model of small local sites?
  • Do we need to travel as much as we did?
  • Can we move face-to-face meetings virtually?
  • How do we structure the office as a team collaboration space?
  • It is positive to hear businesses starting to consider new ways of working and evolving following the crisis. This will likely lead to a number of benefits including: (i) reduction in premises costs (ii) acting more sustainably (iii) improved staff work/life balance and, initial research suggests, (iv) improved customer service. Face-to-face interaction remains a key part of our social wellbeing and we anticipate employees will make work work for them going forward, for example choosing when to go into an office or work remotely. Some rules and norms may need to be established to make this work, for example model month structures with home and office time scheduled, allowing teams to have scheduled physical collaboration time.

2. Urgency: the speed of innovation and change has shifted

CV-19 has shown how quickly businesses can adapt and implement new technology – what once took nine to 12 months has now been done in seven days. Many businesses we have spoken to want to ensure this pace of change continues and is embedded into their post CV-19 operating rhythm and culture. The digital transformation sense of urgency we have seen over recent weeks needs to survive. A number of commentators are suggesting this is a once in a generational opportunity to evolve our business models and how we work. With the speed of change shifting, what will this mean for innovation? Two schools of thought 1) innovation will be cut as costs are controlled or 2) innovation is the answer to improve sales, customer satisfaction and control costs. Through the last downturn, we saw a surge in new product development and innovation. We could well see this again as firms focus on R&D and product development to meet evolving customer needs. Post CV-19 there will be numerous opportunities for technology firms to pivot their business and product set to meet new customer demand.

3. New connectivity needs: will telecoms infrastructure be under pressure?

Remote working is here to stay, which may put pressure on our broadband and network providers resulting in performance degradation. In response to this, we could see an acceleration of fibre broadband rollout as well as a push to get 5G up and running more widely across the UK to help support the new demands for home working, video calls and home schooling. Since the lockdown started, there has been less fixed line or mobile calling with video calls taking over. This is a continuation of the recent telecoms shift from analogue to digital calling into VOIP (voice over internet protocol) and OTT (Over-The-Top) services. Integrated communications platforms like Microsoft® Teams, Zoom and others are accelerating this trend. Everything from instant messaging to external calling can be done from these platforms. Whilst these trends are not new, their acceleration due to CV-19 leaves questions as to whether fixed lines will become redundant as we further rely on the internet.

4. Localised supply chains may win over global supply sources

CV-19 has shown that current global supply chains can have unexpected weak points, and we may need a more localised supply in the future. It is possible we will no longer import components from around the world but instead buy a design and use local 3D printing facilities. For example, for a new phone case you could buy the design and your local 3D print shop could have it ready on the same day. This would save time, reduce shipping costs and environmental impact and help make supply chains more robust.

The impact of technology

Whilst some may have a love/hate relationship with technology, it cannot be denied that technology is helping us through the crisis. Technology has often created the fear that human engagement will be lost, however it may just change as we have seen since lockdown began. Virtual work video calls into colleagues’ homes have provided a deeper insight into who our colleagues are and what matters to them – from seeing their interesting taste in décor to having their children unexpectedly join Zoom meetings. We’ve all seen a new side to our colleagues, which has brought us closer in some way.

Overall, our future has changed following the crisis, and technology is set to be a key player in our new way of life, offering a wide range of benefits including reduced fixed costs for businesses, better work/life balance for employees and positive environmental impact for both. The Systemic Shift we are anticipating offers technology firms a chance to pivot their business to meet new demands and support our transition to a new way of life post the crisis.

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