The pace of digital transformation "exploded" for 69% of privately-held businesses, a new Deloitte survey finds.
Resilience remains the name of the game for organizations and a new report finds that 75% of highly resilient private companies expect revenues--and profits--to increase, versus only 43% of those that are low resilient, a new report finds. Extending the optimism further, more than two-thirds of private business leaders surveyed expressed high confidence in their company's outlook over the next year, according to Deloitte Private's global report.
More than 2,700 private company executives across 33 countries provided insights into what they think about the vitality of their business and the actions they are taking, Deloitte said.
Why are they so confident? It boils down to when their transformation efforts began. "Many businesses were already embracing transformational change in many areas and the pandemic led most to accelerate existing initiatives, rather than start from scratch," according to the report.
Sixty-nine percent of private companies surveyed said the pandemic significantly accelerated their digital transformation—not just sparking but "exploding the pace of adoption," according to the report.
The difference in how highly resilient companies view the importance of digital transformation to their growth versus those with low resilience was 18 percentage points, the report noted.
Companies are also spending on technology in other areas. In the next 12 months, information security is primed to be the most popular technology spending area according to 39% of respondents, followed closely by cloud computing (38%) and data analytics (37%).
Net results of transforming
Capital investments will increase for 71% of highly resilient private companies vs. only 34% of low resilient, the report said. Additionally, 78% of highly resilient private companies expect productivity to increase vs. only 42% of low resilient companies.
There are lingering results from the effects of the COVID-19 pandemic. "Our respondents believe the wide-ranging impacts from the pandemic will continue to be felt not just for the next 12 months, but for the next several years,'' the report said.
An interesting survey finding was that "the pandemic has not only broadened the number of risks that private businesses face, but it has also altered their nature, making some more difficult to measure and manage. While it's relatively straightforward to assess and quantify the impact of a supply chain that has been compromised by COVID-19, some risks—such as changes in customer preferences—are harder to measure and mitigate and may have an even greater impact on corporate success."
Anticipated workforce growth and other top of mind initiatives
Private companies appear to have laid the groundwork for workforce changes through flexible workforce arrangements and by redesigning their organizations to be more agile and accomplish more with smaller, independent teams, including:
Highly resilient organizations (19%) say they have fully transformed the nature of work at their organizations already and 38% say they are midway through such changes.
Highly resilient organizations are more likely to supplement their workforce in the coming year than low resilient organizations (66% versus 48%).
Further, 61% of private companies said they expect to form new partnerships and alliances, while 60% of respondents believe that supply chains need to be redesigned as a direct result of the pandemic.
At the same time, 66% of respondents said they will focus on sustainability and carbon reductions as a priority.
A sharper focus on purpose
Purpose and trust have always been intertwined in the culture and foundation of private companies but took on greater importance in 2020. The report revealed that:
Nearly 70% of the respondents said purpose increased in importance for their organization as a direct result of the COVID-19 crisis.
Highly resilient organizations were at the forefront in this respect, with 84% of the executives from these organizations saying they sharpened their focus on purpose.
"Private businesses' continued commitment to purpose throughout the past year has enabled leaders to accelerate their response to the uncertainties brought on by the pandemic," said Jason Downing, vice chairman of Deloitte LLP, and U.S. Deloitte private leader, in a statement.
The global report illustrates the forward motion private organizations are demonstrating across multiple areas, Downing said, and also "underscores the marked differences between low and highly resilient organizations, as the latter are more inclined to invest for growth and evaluate their purpose in broader society."
Coming out of the pandemic, private companies will stay laser-focused on resilience and acceleration, and both "will likely continue to prove to be the themes embedded within organizations with staying power," Downing said.
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