Never let a crisis go to waste: The staggering speed of new technology adoption leads to revenue growth in the COVID-19 world.
The results of a recent McKinsey survey of almost 900 executives show an unprecedented responsiveness by companies, and a potentially permanent shift in business priorities. The survey found that the astonishingly fast pace at which companies adopted new technologies in the face of COVID-19 paid off, and those companies who quickly implemented cutting-edge systems ultimately experienced, on average, the highest revenue growth. What’s more, the breakneck speed at which the changes were made didn’t negatively impact their outcomes, and many changes are expected to leave a permanent mark on how companies view technology as a strategic imperative. Indeed, McKinsey’s findings suggest a shift from executives assessing the value of technology on a cost/benefit basis to assessing its impact on their competitive advantage.
Check out these numbers:
- Executives said that prior to the COVID-19 crisis, they would have expected the process of implementing new technologies in business operations to take 672 days. But, in actuality, they were able to implement the needed changes in an average of just 26.5 days. That is 25 times faster than anticipated!
- The expected time, before COVID-19, to implement new technology to aid in decision making was 635 days. In the spring of 2020, the relevant changes were made in just 25.4 days, on average.
- 56 percent of top-performing companies say they were the first in their industries to respond to changes due to COVID-19 with new technology.
- Only 30 percent of surveyed companies said their increased use of advanced technology in operations won’t extend past the COVID-19 crisis.
It’s true: We never know what we’re capable of until we’re forced to change. But these results confirm that a corporate culture that embraces technological change, and is capable of quick pivots, is more likely to see revenue growth, particularly in a crisis.
Of course, the idea that a culture of innovation leads to success isn’t unique to the COVID-19 world. Accenture research from 2019 found that companies leading in technological innovation experience revenue growth at twice the rate of the companies lagging behind. But the fast pace of recent world events further magnifies that divide. Cliché or not, the need to respond quickly and intelligently to change truly is unprecedented.
Another shift of historic proportions is the motivation for introducing new technology. A 2017 McKinsey survey found that the cost benefit was the main reason for introducing new systems. The 2020 study, however, found that the main motivation was to obtain a competitive advantage. Companies are recognizing that advances in technology can help them gain actionable insights and improve productivity, both key elements for navigating uncertainty.
These results overwhelmingly provide impetus for updating legacy technology. Companies who are aware that they are working with dated systems need to recognize that the time to change is now.
They can also feel confident that those changes don’t have to be as onerous of an undertaking, timewise, as they may think, since timelines for changes in 2020 have been proven to be drastically shorter than anticipated.
But these findings also lead to an obvious question: Why weren’t the changes made in response to COVID-19 undertaken earlier, if they were so successful? Some of the reasons listed in the survey include:
- Not a high priority at the time.
- Lack of leadership agreement.
- Too big of a change from what employees were used to doing.
- Insufficient IT infrastructure.
- Organizational silos slowing down decision making.
We get those hesitations. Change is hard. Why mess with a process if it’s working, even if you know there are better tools out there? Who has time to implement a new system? What if employees don’t like it? In uncertain times, it often seems easiest to cling to what we know best and stay in our comfort zones. But the evidence is that change is easier – and more worthwhile – than you think. Of course, there is a wide range of possible experiences and timelines when a company implements something new. It may be as simple as introducing Zoom as a way to host meetings for remote workers. Or it could be as complex as migrating to a more robust ERP, like NetSuite or Sage Intacct. No matter what change a company is considering, research supports the value of pursuing innovative paths. It also confirms that fast, progressive changes are possible.
At Airbase, we often see this resistance to change when talking to finance professionals. After all, our spend management platform represents a big change from how corporate cards and AP have traditionally been handled. As an innovative platform that replaces an often-messy stack of legacy products, it’s far more efficient in terms of both time and money. Most finance teams recognize those aspects. But the true value comes from the competitive advantage it offers when finance teams are able to play a more strategic role. For example, the ability to access real-time reporting on company-wide spend empowers management to make more regular assessments of a company’s financial activity and to react quickly if necessary.
However, it is not always readily apparent how profoundly this can impact a company. As a result, finance teams often choose to continue using a slapped-together stack of multiple systems, including separate platforms for bill payments, expense reporting, and invoice generation. They continue with this siloed approach while recognizing its inefficiencies.
Making a change to a new, more comprehensive spend management platform can seem like a daunting task that might not be worth the effort. But the evidence is that companies around the globe have learned that adoption is more manageable than they thought.
An upside of this tragic pandemic is that many companies are becoming more competitive.
Airbase offers a one platform solution to manage all non-payroll spend. It provides oversight and control over spending with real-time reporting and automatic syncing directly to your general ledger. Control all payments – physical cards, virtual cards, ACH, and checks – from one place. Close faster. Empower employees. Control spend.