Building a Digital Bridge to Southeast Asia’s Future

Courtesy of Bain and Company

As the Covid-19 pandemic disrupted nearly every aspect of life over the past year, enterprises have turned to digital technology and analytics to help them weather the crisis and prepare for new ways of operating and serving customers in the aftermath.

During the height of pandemic lockdowns last year, people shut in and businesses shut off. That sparked a sudden economic shift from physical to digital. This is true both for interactions with consumers (online marketing and sales channels, digital products) and for the way companies operate (remote working). Across Southeast Asia, more than one-third of digital service consumers started using the service because of Covid-19, according to research by Bain, Google, and Temasek covering Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Vietnam. More than 90% of new digital consumers intend to continue using at least one digital service post-pandemic. Beyond the immediate fallout of the crisis, it has become clear that Covid-19 is radically accelerating the digital future.

Many organizations circled the wagons in the early months of the pandemic, focusing first and foremost on ensuring the health and safety of their employees, and second, on adjusting their businesses to best serve customers. Many deployed critical measures such as war rooms to accelerate decision making and technology to maintain business continuity.

These were good starts. But after stabilizing their companies, the most effective business leaders began to think strategically about ways to use technology and data to proactively retool their organizations for greater resilience. Now, with hope rising that the end of the pandemic may be in sight, we see six critical areas in which executives can refine their digital roadmap to put themselves in a stronger position for the post-pandemic world—and ensure they’re ready for the next crisis.

1. Build a digitally enabled war room 

Companies deployed war rooms to help them respond quickly to the Covid-19 pandemic. War rooms still serve an important purpose and would benefit from technology that increases transparency and responsiveness, and from better, near real-time data to support effective decision making. Examples might include implementing digital tools to closely track customer sentiment and behavior, increase supply chain transparency and responsiveness, and replace traditional planning methods with advanced scenario- and trigger-based planning. These tools will outlast the pandemic and give companies capabilities needed to accelerate out of it.

2. Overhaul forecasting to adapt to a rapidly changing environment

The pandemic has forced many businesses to set aside traditional demand forecasts, which are no longer accurate nor cut out for the changes underway. We recommend replacing them with scenario-planning techniques that are sophisticated and data-driven. Human judgment is also critically important, particularly when a company has been using machine learning models that rely heavily on outdated demand patterns.

Leading firms will incorporate a wider range of data sets than typical in order to build actionable plans across a broad range of outcomes. This will help organizations adapt to the uncertainty around Covid-19 and its aftermath, and to the complex reactions of customers, competitors, and governments.

3. Build new customer relationships through effective digital experiences

With many people quarantined in their homes for long stretches during the pandemic, digital experiences have mattered more than ever. Leading companies have worked to identify the ones that matter most and improve upon them to build new and stronger customer relationships. In other words: Follow your customers during the pandemic, then lead them out of it. 

This requires understanding the massive shift to online marketing, sales, and communication channels, not only in retail but also in sectors such as insurance, banking, and healthcare. Leaders have made rapid improvements to their digital channels, starting with eliminating bottlenecks and prioritizing increasingly important customer “episodes,” such as late payments, cancellations, and moves to online service. 

Data should underpin all of this. Effective use of it can help companies gather customer feedback and insights so they can quickly test ideas, learn from them, and form stronger bonds with customers.

4. Invest in technology with an eye toward the future 

Most companies have taken steps to ensure their IT systems are robust enough to enable remote work and operational resilience. Some have also defended against new cyber threats that have emerged during the crisis. These are both critical priorities.

But leading companies will go a step further, investing in their technology architecture to accelerate digital transformation and put themselves in a stronger position coming out of the pandemic.

Plenty of companies around the world have made similar moves during or immediately following previous economic downturns. For example, Amazon switched from a monolithic to a microservices architecture in 2001, which made its software development teams more nimble and helped pave the way for the creation of its successful Amazon Web Services business. Or consider Commonwealth Bank of Australia, which began replacing its core banking system in mid-2008, resulting in its becoming one of the first major banks in Australia to offer truly real-time transactions.  

Companies that embark upon substantial IT projects now can start by conducting a sober assessment of their current state. From there, it will be critical to prioritize the technology project backlog to aggressively implement projects that advance the new strategy. And through it all, leaders won’t take their eyes off security for a second.

5. Accelerate automation

Leading firms are accelerating automation efforts during the pandemic, simplifying as they go and using data to determine critical areas of investment and potential cost savings.

During times like these, it’s important to focus on processes of the highest value and urgency where automation can be deployed quickly. Lower-priority automation projects can be put on the back burner and revisited when there is more stability.

6. Embrace the agile, distributed workforce  

Leaders have quickly built new ways of working for their distributed teams that reduce costs and enable their businesses to move faster. This entails deploying digital tools that go beyond teleconferencing to improve how the organization plans, collaborates, innovates, and executes. As a result, these new ways of working have many businesses feeling more, not less, efficient. (Read more in our Harvard Business Review article about how leading companies have embraced Agile principles.)

For many companies, managing the digital transformation accelerated by this crisis will be a multifaceted push, at times complicated by remote working arrangements and other challenges. But businesses that take proactive steps in these six areas can increase their organization’s resilience, deepen customer relationships, and emerge better prepared for the future.