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Microsoft: Pandemic ‘turbocharged’ digital transformation

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The impact of the pandemic on tech investment has been a major theme over the past year. But a new report commissioned by Microsoft underscores just how profoundly COVID-19 has accelerated digital transformation plans.

In a study from Microsoft and the Economist Intelligence Unit titled “The transformation imperative: Digital drivers in the COVID-19 pandemic,” 72% of enterprises reported that their pace of transformation had sped up significantly, thanks to the pandemic. The study notes that “In the race to keep up with their digital-first peers, the majority also say the pandemic has turbocharged their own digital journeys.”

According to Microsoft CVP Deb Cupp, that high percentage suggests digital transformation has moved from being something leading enterprises have embraced to a must-have across all sectors.

“This concept of digital transformation used to be thought of as a competitive edge,” Cupp said. “Now you need it for business resilience. That became so evident as we continue to work our way through the pandemic.”

To get there, 50% of respondents said cloud computing has been the most critical tool in their transformation journeys. And 57% said increased efficiency and productivity were “dominant factors” in their decision to invest more in digital tools.

“It’s really created an opportunity for customers to think about how not only do they move to a more agile environment in the cloud, but how do they get data so that they create better insights into decisions that they should be making,” Cupp said. “I think that’s something we learned a lot about, especially with our retail customers and our manufacturing customers.”

Enterprises have also become more socially aware during the pandemic. In the survey, 76% said the pandemic “has placed fresh responsibility on companies to play a constructive role in wider society.” And 75% said any digital transformation plans should go beyond business motivations to include the impact on society.

“This has helped us all learn how interconnected the world is,” Cupp said. “The survey tells us that they recognize that they have this responsibility. So it’s not only about the work that they’re doing for their own organization, but this wider societal impact, which I think was pretty powerful.”

Employees have also become a bigger priority. Prior to the pandemic, 24.3% of enterprises considered employee engagement a priority. That jumped to 35.6% last year. As part of that, training and education have also become more urgent.

“I was surprised at how quickly and how much it popped,” Cupp said. “When you have 72% of the respondents saying that COVID has really been accelerating their pace of transformation, then elevating that employee engagement is not just a nice-to-have. It really is an essential priority.”

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