TheTCSCOVID­19BusinessImpactSurvey2020DigitalReadinessandCOVID­19:AssessingtheImpact

www.tcs.com

3 Executivesummary

14 Finding4Amidshrinkingbudgets,digitaltransformationprojectsriseasapriority

5 Theessentialdigitalcapabilities7 Fivekeyfindings 8 Finding1Mostorganizationslackessentialdigitalcapabilities,andthepandemicisexposingthisasaweakness 9 Finding2Organizationswithessentialdigitalcapabilitiesarecopingbetterwiththepandemic 11 Finding3Manyorganizationsareactivelyexpandingtheirdigitalcapabilities

22 Findingsbyindustryandregion29 Calltoaction:Thrivingamidpandemic­drivenurgencyandbeyond33 Appendix:Demographics

19 Finding5Remoteworkisanewlong­termnorm,andnearlyallorganizationsareinvestingtomakeitproductiveandsafe

TheTCSCOVID­19BusinessImpactSurvey2020 1

Contents

2

Weconductedacross­industrysurveyofexecutivesatlargeglobalcompaniestouncoverhowtheircompanieshavefaredduringthepandemicandtheirstrategyforrecoveryintheemergingcompetitivelandscape.Wefoundthatcompaniesthathadembraceddigitaltransformationmorewhole­heartedlyandwerefurtheralongintheirdigitalevolutionhave,onaverage,performedbetterduringthepandemicandsubsequenteconomicdownturn.What’smore,theyexpectafasterrebound.Sincemanypandemic­erabusinesschangeswilloutlastthecrisis,thesecompaniesarepoisedtoprosperinthelongterm.Ourreportprovidesdataonthemostdigitallypreparedcompanies,aswellashowtherestofoursurveysampleisracingtocatchup.Wefoundsurprisinginsightsthatwillhelpyouplanyournextstepsandenvisionyourpathforwardintoaneconomiclandscapefilledwithnewopportunities.HappyReading!RajashreeR,ChiefMarketingOfficer,TCS

Evenbeforethepandemic,thedigitalcapabilitiesthatcompaniespossessedwererapidlybecomingcentraltotheirsuccess.Asaresult,digitaltransformationinitiativesappearedtobehappeningeverywhere.TheCOVID­19pandemic,however,hasservedasawakeupcall.Asournewsurveyfound,manycompanieswerenotasfaralongindevelopingessentialdigitalcapabilitiesastheyhopedtheywouldbe.

TheTCSCOVID­19BusinessImpactSurvey2020

ExecutivesummaryFromthestart,digitalcapabilitieslikecloud,AI,automationandagilemethodologiesheldtransformativepotential.Somecompanieswerequicktoembracethepromiseandracedaheadtowarddigitaltransformation.Othersembracedthejourneymorecautiously,preferringtotakeawait­and­seeapproachasthetechnologiesmatured.Themajorityfellsomewhereinthemiddle–neitherfullyembracingnorcompletelydismissingthechangesdigitaltechnologieswereusheringinonanunprecedentedscale.ButasCOVID­19swepttheglobethisspring,thedigitaltransformationjourneyacceleratednearlyinstantaneously.Timelinesshrunktotwooptions:fastandfaster.Tounderstandtheimpactofdigitalreadinessandtransformationagainsttheever­changingCOVID­19backdrop,wesurveyednearly300seniorexecutivesin11sectorsinAsia,EuropeandNorthAmerica,abouttwo­thirdsinorganizationswithannualrevenueover$5billion.InJulyof2020,weaskedquestionsinfourareas: Howisthepandemicimpactingtheirbusiness,andwhendotheyforeseeeconomicconditionsreturningtopre­pandemiclevels? Whatarethemainchangestheyanticipateintheirbusinessandindustryinareassuchasthebusinessmodel,supplychainandcustomerexperience(CX)? Whatarethemostimportantandmostdifficultactionstheyhavetakenorareplanningtotake,particularlyconcerningtechnologyinvestmentsandpandemicresponse? Whatdigitalcapabilitiesdotheyhavetoday,oraredevelopingorareplanningtodevelopduringthepandemictoremainvibrantduringandafterthecrisis?

3TheTCSCOVID­19BusinessImpactSurvey2020

Otherwise,thereisaprofoundlackofclarityasorganizationsrethinktheirstrategiesforthepost­pandemicworld.Uncertaintywilllikelyremainfortheforeseeablefuture.Butevenasorganizationsconcedetheinabilitytopredictwhatthefuturewillbring,theyareunitedintheirbeliefthatthepathforwardlieswithdigitalreadiness.

LeadersandFollowersOuranalysisidentifiedasmallminoritythathadoutperformedtherest(“Leaders”).TheseLeadersarefurtheralongintheirdigitaltransformationandhaveacquiredessentialdigitalcapabilitiesthatsetthemapartfromtherest.Thesecapabilitiesinclude: Anend­to­enddigitalcustomerexperience(CX) AI­basedanalyticstocontinuallyimprovetheCX Coreenterprisesystemsinthecloud Digitalsensorstrackingproducts KeypartnershipsindigitalecosystemsByandlarge,therestoftheorganizationssurveyedlackedthesedigitalcapabilitiesandhavefurthertogointheirdigitaltransformations.Butthoseorganizationswon’tlagbehindforever.Theyareimplementingdigitalcapabilitiesatapacemanycouldneverhaveenvisionedbeforethepandemic.Infact,wefoundthatdigitalinvestmentisgainingmomentumsoquicklythatinafewyears'time,theproportionofLeaderswillbefarlargerthanitcurrentlyis.Butevenasorganizationslookforwardtonewbeginnings,they’rejugglingtwocriticalanddifficultissuesthatimpactinvestmentdecisionmaking:rethinkingtheirstrategyforadigitalworldwhiletightlymanagingcashflows.Thusfartheirinvestmentsarefavoringtheremoteworkforce,whichtheylargelyanticipateisheretostayinoneformoranother.

WeexpectedtolearnthattheCOVID­19pandemichadinflictedfinanciallossonmanycompaniesacrosssectors.Ourfindingslargelyconfirmedthis.Whatwassurprisingwasthatdespitetherevenuedeclines,anastonishing90%ofallcompaniessurveyedsaidtheyhavelargelymaintainedorincreasedtheirinvestmentsindigitaltransformationduringthepandemic.Thesurveyfindingsunderscorewhatorganizationsrealized–insomecases,painfully–whenthepandemichit:digitalcapabilitiesareabusinessimperativeforsurvival.

Highlyautomatedcorebusinessprocesses

4TheTCSCOVID­19BusinessImpactSurvey2020

Withinthesurveyfindings,weidentifiedsixessentialdigitalcapabilitiesthatprovedcrucialtorespondingrapidlytoCOVID­19andforthepost­pandemicworld.Offeringanend­to­enddigitalcustomerexperience.Suchacustomerexperienceenablespeopletoseamlesslyresearch,purchaseandobtainsupportontheirdevices.Thisboostsrevenuesbymaximizingconvenienceandenablingcustomersaroundtheworldtofulfilltheirneedsrapidly,aroundtheclock.Amazonisbothapioneerandthemasterofthis.Duringthepandemic,itsrevenueshavesurgedanditsprofitshavedoubled,inlargepartbecausethee­commercegianthasenabledcustomersunderlockdowntofindwhattheyneedandorderitconvenientlyandseamlessly,thenhaveitlandontheirdoorstepwithindays.UsingAI­powereddataanalyticstocontinuallyimprovethedigitalcustomerexperience.AI­poweredanalyticscanensurethatacomplexcustomer­experiencesystemisfunctioningoptimally,andcanidentifyimprovementsthathumananalystsmaymiss.

Thesixessentialdigitalcapabilities

OnlinefurnitureretailerWayfairexcelsatthis.Thecompany hasmorethan2,300engineersanddatascientistsbuildingmachinelearningalgorithmstopersonalizesitemerchandiseandmarketingcampaignstomorethan20millioncustomers.Italsousesnaturallanguageprocessingtounderstandhowtobestcurateproducts.

5TheTCSCOVID­19BusinessImpactSurvey2020 23%havedigitalsensorstrackingproducts

26%candeliveranend­to­enddigitalcustomer

21%havekeypartnershipsindigitalecosystems

26%candeliveranend­to­enddigitalcustomer26%candeliveranend­to­enddigitalcustomer 24%haveAI­based 26%havecoreenterprisesystemsinthecloud

24%havehighly

Only...

Hostingcoreenterprisesoftwareinthecloud(ratherthaninon­premisesdatacenters).Cloudhostingprovidesnumerousadvantagesandefficiencies.ItstreamlinesITdemands,facilitatescustomizationandremoteaccess,andenablesdatatobeextractedforbusinessintelligencepurposes.TheDisney+streamingservice,launchedinlate2019,isalreadyestimatedtobea$3.7billionbusinesswith54millionsubscribersasofMay2020,and infiveyears.Disney+usesAWSasacloudpartner,couldreach$30billionprovidingnumerousbenefitsandenablingtheservicetoscaleatspeed.Deployingautomationtohandleahighdegreeofcoreenterprisebusinessprocesses(suchasmarketing,sales,serviceandproduction).Automationimprovesefficienciesandfreesemployeestotacklehigher­valuetasks.

UsingInternetofThings(IoT)digitalsensorstotrackhowproductsperformforcustomers.IoTsensorsprovideunprecedentedinsights,enablingengineerstobetterunderstandcustomerneedsandimproveproducts—evenonthefly.Therearealreadymorethan25billionIoTdevicesconnectedtotheinternet,revolutionizinghowproductsandserviceswork.WhenHurricaneDorianthreatenedtheU.S.EastCoastin2019,Teslaannounceditwoulddisablearestrictionimposedonits enablingeachcartotravelfartheronasinglecharge.Itdidallthisremotelywithoutbatteries,havingtotouchasinglecar.Inanotherexample,shipbuilder isputting700sensorsintoeachofDamenShipyardsthe sitsells(about175peryear)todetectandfixengineandothermaintenanceissuesbeforetheyoccur,vesselandincreaseitsservicebusiness.Capitalizingonthedigitalecosystempartnershipswithkeyplayers.Digitalecosystempartnershipsenablecompaniestoidentifyandseizeinnovativecollaborativeopportunitieswithsuppliers,customers,dataprovidersandotherswithintheirdigitalsphere.Bytakingadvantageofdigitalecosystempartnerships, has itselffromadrugstorechainCVSHealth transformedtoawide­rangingproviderofhealthcareproductsandservices(includinghealthinsurance).Ithasforgedextensivedigitalpartnershipswithmedicalservices,productdistributorsandotherecosystemplayers,andexceeded$250billioninrevenuein2019vs.$96billionin2010.

Takeda,the$19billionJapanesepharmaceuticalcompany,isusingroboticprocessautomation(RPA)toaccelerateclinicaltrialsofapromisingCOVID­19treatment.Takedareducedthetimetocompleteparticipant­onboardingpaperworkfromweekstodays.ThecompanyestimatesthatitsRPAeffortscouldautomate4.6millionhoursofofficeworkperyear.

6TheTCSCOVID­19BusinessImpactSurvey2020

FivekeyfindingsThesurveyrevealedthattheessentialdigitalcapabilitiesplayedadramaticroleinorganizations’performanceduringthepandemic.Inanalyzingthedata,fiveinsightsstandout.Thefollowingsectionsexaminethesefivefindingsingreaterdetail.

Finding1 Mostorganizationslackessentialdigitalcapabilities,andthepandemicisexposingthisasaweakness.Whilewefoundthatmostcompanies(66%)hadthecapabilityofenablingtheirworkerstoworkfromhome,onlyaboutafifthtoaquarterhadthesixessentialdigitalcapabilitiesweidentified.(SeeFigure1.)Figure1:Percentageofcompanieswithsixessentialdigitalcapabilities

Thisisprovingtobeasignificantliabilityduringthepandemic.AslegendaryinvestorandBerkshireHathawayCEOWarrenBuffetthassaid,“It’sonlywhenthetidegoesoutthatyoulearnwho’sbeenswimmingnaked.”Likewise,ittookapandemictoseewhichcompanieshaddevelopedstrongdigitalcapabilities,andwhichhaveyettogetuptospeed.Thelackofthesecapabilitieshasharmedthemcompetitivelyinaworldthat,bynecessity,hasleapfroggedintodigital.Sectorsthatleadindeployingthesixessentialdigitalcapabilitiesincludehightechandretail.Thosethattrailedinfourormoreessentialdigitalcapabilitiesaregovernment,consumerpackagedgoods(CPG)anddistribution,andpublicservices.(Formore,see“FindingsbyIndustryandRegion”section.)

digitalCXcandeliveranend­to­end haveAI­basedanalytics havecoreenterprisesystemsincloud25% 24% 27%havehighlyautomatedcorebusinessprocesses havekeypartnershipsindigitalecosystems havedigitalsensorstrackingproducts23% 21% 22%

8TheTCSCOVID­19BusinessImpactSurvey2020

Finding1 Organizationswithessentialdigitalcapabilitiesarecopingbetterwiththepandemic

TheTCSCOVID­19BusinessImpactSurvey2020 9

2 Inanalyzingthesurveydata,weidentifiedLeaderswhohavestrongdigitalcapabilities,Followerswhohaveweakerdigitalcapabilitiesanda“VastMiddle”ofcompaniesthatfallbetween.Leadersconstitute12.5%ofall287surveyrespondents.ToqualifyasaLeader,acompanymusthavedeployedatleastfourofsixessentialdigitalcapabilities.Followers(19.5%ofthetotal)werecompaniesthatlackedatleastthreeofthesecapabilities,orwerenotdevelopingorevenconsideringdevelopinganyofthem.Companiesinthevastmiddle(68%)–i.e.,neitherLeadersnorFollowers–wereatleastplanningtodevelopmorethanthreeoftheessentialdigitalcapabilities,andtheymayalreadyhavetwoorthreeinplace.

WhoqualifiesasaLeader?

%ofLeaders,FollowersandtheVastMiddlesurveyson6essentialdigitalcapabilities

AhigherpercentageofLeadershaveperformedbetterrevenue­wisethantherestofoursurveyparticipantsduringthepandemic.Theyarealsoshowinggreaterresilience.AsmallerpercentageofLeadershaveseenrevenuedeclinesthanhaveFollowers.

AndLeaderswhoserevenuediddeclineexpectamorerapidrecovery.

Leaders64% Followers73% VastMiddle68%74%Leadersexpectrevenuetobouncebackwithintwoyears Only54%Followerssaythesame

VastMiddle59%

19.5%67.9%12.5% Leaders VastMiddle Followers

Finally,Leaderswerefarbetterpreparedtoshiftworktoemployees’homes.AllLeadersindicatedtheirremoteworkersoperateproductively,securelyandcollaborativelyfromhome.(SeeFigure2.)Thiscomparestojust45%ofFollowers,and67%oftheVastMiddle.Leaderswerealsomoreconfidentaboutpredictingthefuture.While10%ofFollowersand14%oftheVastMiddlewereuncertainwhentheirrevenueswouldrecover,alloftheLeaders(100%)madeaprediction.

10TheTCSCOVID­19BusinessImpactSurvey2020

FollowersVastMiddle

Leaders 100%4% 6%23%67%

4%45% 18% 25% 9% Alreadysupportremoteworkersthisway Currentlydevelopingthiscapability Planningtohavecapability Considering Noplanstodevelopcapability

Whichindustriesaremoredigitallyadvanced?SectorswiththehighestproportionofLeadersoutofallsurveysintheirsectorwerehightech(22%ofthesecompanieswereLeaders)andinsurance(16%).Theseareamongthemostinherentlydigitalindustries,dominatedbycomplex,intangibleservicesthatcanbedigitized.SectorswiththehighestproportionofFollowerswerebankingandfinancialservices(BFS)(20%),energy(16%),andmanufacturing(16%).ThisissurprisingforBFScompanies,giventhattheirprofitmarginscanbesubstantialandthattheyspendgreatamountsoninformationtechnology.Energyandmanufacturingaredominatedbyhugecapitalassetinvestmentsandarethereforelesseasytodigitize.Still,thereisenormousuntappedpotentialtoprofitfromdigitaltransformationinthesesectors,notablyinusingIoTtomonitorequipmentinthefield.

Figure2:%ofcompanieswhereremoteworkersoperateproductively,securelyandcollaborativelyfromhome

Note:Numbersmaybelessormorethan100%duetorounding

Thefourcapabilitiesare“robustdataanalyticswithAItoimproveCX”(63%),“coreenterprisesoftwareinthecloud”(66%),“highautomationofcorebusinessprocesses”(67%),and“anend­to­enddigitalcustomerexperience”(69%).(SeeFigure3.)

Ourfindingssuggestthatifweweretoconductthesurveyinafewyears’time,wewouldfindamuchhigherproportionofLeaders.Ifthesecompaniesaresuccessfulandmaintaintheirbudgetsthroughoutthepandemic—whichtheyareexpectedtodo—fouroftheessentialcapabilitieswillhavebeendeployedbyabouttwo­thirds(63%to69%)ofcompanies,includingboththosethatcurrentlypossessthesecapabilitiesandthosethataredevelopingthem.

Anend­to­enddigitalCX(44%) Highlyautomatedcorebusinessprocesses(44%)

Inadditiontoaskingexecutivesaboutwhethertheirorganizationshadcertaindigitalcapabilitiesinplace,weaskedwhichcapabilitieswerecurrentlyunderdevelopmentandwhichwereintheplanningstages.Wefoundthatwhilemostorganizationsarebehindinhavingthesixessentialdigitalcapabilities,alargeproportionarenowracingtocatchup.Weseethisasevidencethatthepandemichassoundedawakeupcall.Organizationsrecognizethatthesetechnologiesarecriticalforresilienceinthefaceofthepandemic,andthatdigitalcapabilitieswillcontinuetobeessentialinthepost­pandemicworld,giventhechangesthatthecrisishasaccelerated.Fororganizationsthatdon’thavethesixessentialdigitalcapabilities,theonestheyaremostcommonlydevelopingare:

Roughlyhalfwillhavetheothertwoessentialcapabilitiesinplace:“partnershipswithkeydigitalecosystemplayers”(56%),and“digitalsensorsreportingonproductperformance”(46%).

11

Manyorganizationsareactivelyexpandingtheirdigitalcapabilities.

TheTCSCOVID­19BusinessImpactSurvey2020

Finding 3

Inadditiontotheseessentialcapabilities,thereareotherdigitalinitiativesthatorganizationsalreadyhaveinplaceorarecurrentlydeveloping.Theseinclude“workforcereskilling”(67%),whichsuggestsalong­termviewtowardtransformationratherthanimplementingpointsolutionstogetthemthroughthepandemic.Anddespitetheeconomiccrisis,organizationsremaincommittedtotacklingtheslower­movingcrisisofclimatechange.“Enablingandensuringenvironmentallysustainablepracticesacrossvaluechain”remainsahighpriority(63%)fororganizations.

12TheTCSCOVID­19BusinessImpactSurvey2020

Figure3:BusinessinitiativescompanieshavedeployedorarecurrentlydevelopingAnend­to­enddigitalCXHighautomationofcorebusinessprocessesWorkforcere­skillingCoreenterprisesoftwareinthecloudEnvironmentalsustainabilityacrossthevaluechainRobustdataanalyticswithAItoimproveCXDownloadableend­to­enddigitalproduct/serviceKeydigitalecosystempartnershipsNewchannelsNewbusinessmodelsNewoperatingmodelsAsupplychainthatcanquicklyshiftfromglobaltoregionalDigitalsensorsinproductsreportingonperformanceMorecompanyacquisitions,jointventuresandalliancesNewbusinessventures/startups Alreadyhaveit CurrentlydevelopingNote:Numbersmaybelessormorethan100%duetorounding

13

Ontopoforganizationsthatcurrentlyhaveessentialcapabilitiesinplaceoraredevelopingthem,10%to22%areplanningtodeploytheminthefuture,asshowninFigure4.Thiswouldbringthetotaltomorethan84%for4ofthe6essentialcapabilities.Thefindingthatasignificantmajorityofcompaniescouldsoonqualifyasleadersdramaticallybooststheurgencyfordeployingdigitaltechnologies,transformingthemfromacompetitiveedgetoabusinessimperative.

TheTCSCOVID­19BusinessImpactSurvey2020

Figure4:Businessinitiativesorganizationshavedeployed,arecurrentlydeveloping,orplantodevelopAnend­to­enddigitalcustomerexperienceRobustdataanalyticswithAItoimproveCXHighautomationofcorebusinessprocessesCoreenterprisesoftwareinthecloudWorkforcere­skillingEnvironmentalsustainabilityacrossthevaluechain 77%Newchannels 76%Downloadableend­to­enddigitalproduct/service 74%Keydigitalecosystempartnership 67%Newbusinessmodels 66%Newoperatingmodels 64%Morecompanyacquisitions,jointventuresandalliances 63%Asupplychainthatcanquicklyshiftfromglobaltoregional 60%Newbusinessventures/startupsDigitalsensorsinproductsreportingonperformance 0% 20% 40% 60% 80% 100%

85%85%25% 44% 16%85%84%82%80%

23% 44% 18%24% 39% 22%26% 39% 18%24% 43% 15%31% 32% 17%

56%

20% 36% 21%27% 33% 16%21% 36% 18%16% 34% 17%19% 30% 17%20% 23% 20%21% 27% 16%20%16% 24%24%22% 10% Alreadyhaveit Currentlydeveloping WilldevelopinthefutureNote:Numbersmaybelessormorethan100%duetorounding

Amidshrinkingbudgets,digitaltransformationrisesasapriority

TheTCSCOVID­19BusinessImpactSurvey2020

Finding 4

14

Thoughthecommitmenttodigitaltransformationisstrong,thereisasignificantlackofclarityonhowtostrategicallymoveonmultipledigitalfrontscost­effectivelyinthiseconomicenvironment.Thesurveyfoundthatexecutiveshavebeencontendingwithintensebudgetpressuresduringthepandemic.Revenuehasfallenat68%ofcompanies(seeFigure5),andatleasttwo­thirdsdon’tseeitreturningtopre­pandemiclevelsformorethanayear(seeFigure6).

DecreasedStayedthesame

Increased 8%68%

24%

Figure6:Whenorganizationsbelieveannualrevenue/budgetrunratewillreturntopre­pandemiclevels2%4% 17% 37%28%11%

Within3months3monthstolessthan6months6monthstolessthan1year1yeartolessthan2years2yearstolessthan5years5yearsormoreTooearlytotell/Don'tknow 2%Note:Numbersmaybelessormorethan100%duetorounding

Figure5:HowCOVID19pandemicimpactedorganizations'revenue/budget

Amidthiswidespreadrevenuedecline,budgetpressuresareintense.Onascaleofonetofive,respondentsranked“managingthecompany'scashflowandbudgets”and“strategiccostmanagement”amongthemostimportantinalistofmorethantwentyconcernsexecutivesface,alongsidesuchchallengesas“ITsecurity”and“implementingastrategyfordealingwiththecrisis”(Figure7).

15

Figure7:Pandemic­relatedconcerns

TheTCSCOVID­19BusinessImpactSurvey2020

3.203.393.553.603.653.723.823.843.903.914.034.084.104.114.164.19

4.364.364.424.444.464.484.55

1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00Restartingplants&warehousesRe­imaginingphysicaltouchpointswiththecustomer—e.g.,in­storeexperience,travelexperience,etc.AttractingandrecruitingtalenttoourorganizationRevampingoursupplychain(e.g.,makingitflexibletooperateonbothaglobalandregional/countrybasis)Beingtechnologyassetlight(fewerdatacenters,etc.)bymovingITinfrastructure,applications,anddatatothecloudManagingfieldservicespartnersUpgradingexistingITinfrastructureHavingproductsandservicesthatarerelevanttocustomers'needsandwantsRe­imaginingecosystempartnerrelationshipstoenhancecollaboration,obtainon­demandcapacity,etc.RetainingtalentandenhancingworkforceskillsGeneratingcustomerdemandforourproducts/servicesDevelopingleadershipskillsatalllevelstohelpmanagersandemployeesdealwiththecrisisDetermininghowto"godigital":ourbusinessmodel,coreofferings,marketing,sales,delivery,talentmanagement,etc.Improvingthedigitalcustomerexperiencetoreachprospects,facilitatepurchases,ordeliversupportRethinkingourstrategyforapost­pandemicworldManagingcriticalbusinessimprovementprojectsthroughremoteteamsStrategiccostmanagementDevisingandimplementinganeffectivestrategyfordealingwiththecurrenteconomiccrisisManagingourcashflow&budgetsShiftingourofficeworktoremotework(foremployeestoconductfromtheirresidences)Continuetoserviceourcustomers/clientsKeepingouremployeeshealthy,bothphysicallyandemotionally

ITsecurity

1=Notimportant;2=Nottooimportant;3=Neutral;4=Fairlyimportant;5=Veryimportant

Despitethebudgetpressure,thesurveyfoundthat66%ofrespondentshavemaintainedtheirdigitaltransformationbudget,and25%haveactuallyincreasedit.Amongthosewhohavededicatedadditionalfundstodigitaltransformation,theaverageincreaseis33%.Amongthe10%whocuttheDXbudget,theaveragedecreaseisonly14%.(SeeFigure8.)

Suchdigitalinvestmentshaveturnedouttobecrucialformanyorganizationsinthedownturn.OnelargeEuropeanairlinehadtogroundnearly90%ofitsfleetduringthepandemicandhandlecustomerrefundrequests.Roboticprocessautomationenabledtheairlinetofieldmorethan100,000refundsandreducethetimeittookacknowledgecustomerrequestsfrom10daystolessthan30minutes.

16TheTCSCOVID­19BusinessImpactSurvey2020

Figure8:Thepandemic'simpactondigitaltransformation(DX)investments25%

66%10%

IncreasedStayedthesameDecreasedAverageincrease:33%Averagedecrease:14%

AfocusonstrategicprioritiesThepandemic­drivenneedtoexpanddigitalcapabilitiesamidbudgettighteningisforcingorganizationstomakedifficultdecisions.Executivesarecompelledtobalancegoals–suchasimprovingthecustomerexperience,supportingremoteworkersandbuildingadigitallyflexiblesupplychain–allofwhichareurgent.Oncetheyhavesettheirpriorities,theyareevaluatingwhichgoalscanbeaddressedwithpointsolutions,andwhichrequireacompleteoverhaulofprocessesoroperatingmodels.Figure9showshoworganizationsarechangingtheirtechnologyinvestmentsduetothepandemic.Increasessignificantlyoutnumberdecreases.Themostcommonincreaseshavebeentotechnologiesthatsupportremotework.Theseinclude“collaborativetechnologies,”“cybersecurity”and“cloud­nativetechnologies.”Whilethepandemicmayhaveacceleratedinvestmentintheseareas,oursurveydatasuggestthatthesetechnologieswillremaincriticaltohowcompaniesoperateinthefuture,evenafterthepandemicisover.Theproportionofcompaniesdecreasingtheirinvestmentwasbothsmallandevenlydistributed.Technologiesinwhichthegreatestproportionofrespondents(5%)decreasedtheirinvestmentswere“facilityautomationleveragingautonomousmobilerobots”and“blockchain.”

Note:Numbersmaybelessormorethan100%duetorounding

17TheTCSCOVID­19BusinessImpactSurvey2020

CollaborativetechnologiesCybersecurityCloud­nativetechnologiesAdvancedanalyticsRPA/automationArtificialintelligence/MachinelearningInternetofThingsDigitaltwinAugmentedreality/VirtualrealityFacilityautomationleveraging‘AutonomousMobileRobots’(AMR),AutomatedStorage&RetrievalSystems,etc.BlockchainDrones/Autonomousvehicles5G

Figure9:Howorganizationsarechangingtheirinvestmentsin13technologiesduetothepandemic2%1%

Increased Stayedthesame Decreased Notapplicable/Notusing

65% 32% 1% 2%56% 40% 2%51% 43% 2% 4%39% 53% 3% 5%65% 2%31%25% 56% 4% 16%18% 52% 3% 27%14% 43% 3% 40%13% 48% 4% 35%9% 43% 5% 43%8% 46% 5% 40%8% 44% 3% 45%44% 3% 46%5%Note:Numbersmaybelessormorethan100%duetorounding

18TheTCSCOVID­19BusinessImpactSurvey2020

Figure10:Topbusinessobjectivesrespondentsfindmostimportantandmostdifficulttoaccomplish

Low

High

HighIndealingwiththepandemic’simpact,howimportanthavethefollowingissuesbeenforyourorganizationtomanage?Whiledealingwiththepandemic’simpact,howdifficulthavetheseaspectsbeenforyourorganizationtomanage?

Degreeofdifficul

ty

Degreeofimportance

Thedigitalecosystem'simpactonstrategyOnastrategiclevel,thepandemicisforcingorganizationstorethinkhowandwheretheycompete.Theacceleratingshifttodigitalrequiresthemtoconsidertheirplaceamongcross­industrydigitalecosystems,andtodeterminewheretheycanbestaddvalue,bothduringthepandemicandonabusinesslandscapethatwillbeforeverchangedbyit.Inadditiontodeterminingwhichtechnologiesaremostimportanttotheirgoals,organizationsshouldasktwoquestionstodefinetheirdigitalstrategy: Howdotheybuildtherightdigitalcapabilitiesquicklybuteffectively? Howdotheydesignthesecapabilitiestobeexpandable,sothattechnologiesdeployedduringthepandemicdon'tconstraintheminthefuture?Giventheneedtoprioritizedigitalgoals,itishelpfultoconsidertheimportanceanddifficultyofimplementation.Figure10plotswhichbusinessobjectivesrespondentsconsideredmostimportantversuswhicharethemostdifficulttoaccomplish.Forinstance,restartingplantsandwarehouseswasviewedasalessimportantbutmoredifficulttask,hencemanycompaniesarenotmakingthisapriority.Ontheotherendofthespectrum,shiftingtoremoteworkandcontinuingtoservecustomers(i.e.,businesscontinuity)wereseenashighimportanceandlowdifficulty,sothesetasksarelikelytobehighonthelistofprioritiesformanyorganizations.

19TheTCSCOVID­19BusinessImpactSurvey2020

Remoteworkisanewlong­termnorm,andnearlyallorganizationsareinvestingtomakeitproductiveandsafe.Finding 5 Asthepandemicspreadaroundtheworld,forthevastmajorityoforganizationsshiftingworkhomehasnotbeendifficult.Yetkeepingremoteworkersproductive,secure,andworkinginagileteamshasbeenarealchallenge.WefoundthatfearofremoteworkersbeinghackedisamajorconcernforITsecurityprofessionals.Additionally,43%ofcompaniesfinditdifficulttomanagekeyimprovementprojectswithremoteteams.Themostcommonareasofincreasedtechnologyinvestmentservetoboosttheefficiencyandsafetyofremotework.

Despitethechallenges,theremoteworkforceisheretostay.Ineachcompany,theaverageproportionofemployeesprimarilyworkingremotelyhasincreased,andisexpectedtoremainelevatedafterthecrisisends:

Beforethepandemic9% Now64% 202540%

Howisthepandemicimpactingtheirbusiness,andwhendotheyforeseeeconomicconditionsreturningtopre­pandemiclevels?

Mostorganizationslackessentialdigitalcapabilities,andthepandemicisexposingthisasaweakness.Organizationswithessentialdigitalcapabilitiesarecopingbetterwiththepandemic. Manyorganizationsareactivelyexpandingtheirdigitalcapabilities. Amidshrinkingbudgets,digitaltransformationrisesasapriority. Keepingremoteemployeesproductive,motivatedandsafefromcyberattackstakescenterstage.

SLIDE 2 Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

SLIDE 4

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

Whatarethemostimportantandmostdifficultactionstheyhavetakenorareplanningtotake,particularlyconcerningtechnologyinvestmentsandpandemicresponse?Whatdigitalcapabilitiesdotheyhavetoday,ordon’thavebutaredevelopingorplanningtodevelopinthispandemic,toremainvibrantcompaniesduringandafterCOVID?

Determininghowtogodigital Rethinkingstrategyforapost­pandemicworld Strategiccostmanagement Managingcashflowandbudgets

SLIDE 12,13,14

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

44%End­to­enddigitalCX 44%Highlyautomatedcorebusinessprocesses 39%CoreenterprisesoftwareinthecloudSLIDE 8

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

SLIDE 10

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

Purpose­driven. Resilient. Adaptable

SLIDE 12

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

Coalescearoundavisionofthecompany’splaceinthedigitalecosystem. Continuallyexperimentwithnewdigitalbusinessmodels,digitalproductsanddigitalprocesses. Engineerdigitallyflexiblesupplychains.

SLIDE 14

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

Keeptheremoteworkforceagile,productive,energized,healthyandsafefromcyberattacks.Capitalizeonaglobalmarketfortalent. Createasuperioremployeeexperience,especiallyforremoteworkers.

SLIDE 13

Whatarethemainchangestheyanticipateintheirbusinessandindustry,inareassuchasthebusinessmodel,supplychainandcustomerexperience?

Automateeverymanualactivitythatcanbeautomated,usingAItoimprovethemcontinually.CreateanirresistibledigitalCX. Identifynewtasks,skillsandjobsthatcan’tbeautomated,andtrainpeopletomasterthem.

collaborativetechnologies cybersecurity cloud­nativetechnologies

20TheTCSCOVID­19BusinessImpactSurvey2020

Withaneyetothislong­termexpandedroleforremotework,nearlyallorganizationsareinvestingintechnologiestosupportremoteworkandprotectitfromriskssuchascyberattacks.Remoteworkhas,ofcourse,beenvitalduringthepandemic.Organizations'abilitytoshifttheiremployees'worktotheirhomeshasdramaticallysoftenedthepublichealthandeconomictollofthecrisis.Acriticalquestionforthefutureisthis:Towhatextentwilltheshifttoremoteworkendure,evenafterthepandemicends?Theanswertothisquestioncanhelpbusinessesdeterminetherightlevelofinvestmentinsuchareasascollaborativetechnologies,cybersecurity,andsupportforremotework.AsshowninFigure11,thesectorswiththehighestproportionofremoteemployeesincludepublicservices(76%),communications(74%)andinsurance(74%).Thelowestproportionswereinhealthcare/lifesciences(45%)andtravel/hospitality(42%).Geographically,employeesinEuropeweremostlikelytobeworkingremotely(70%),followedbyAsiaPacific(67%)andNorthAmerica(60%).Whilerespondentsbelievethatmanyemployeeswillreturntotheirworkplacesafterthepandemic,theyexpectalargeproportion–about40%ofthetotal–tobeworkingremotelyin2025.Ifthispredictionprovescorrect,abouttwo­thirdsofpeoplewhoarecurrentlyworkingremotelycanexpecttocontinuedoingsoforthelongterm.Afterthepandemic,ahigherproportionofemployeesareexpectedtoworkprimarilyfromhomeinbankingandfinancialservices(44%),energy(43%)andmanufacturing(41%).ThoseintheAsianregionwillbemorelikelytoworkfromhome(45%oftheaverageworkforce)thanEuropeans(41%)andNorthAmericans(37%).

21TheTCSCOVID­19BusinessImpactSurvey2020

TotalBankingandfinancialservicesCommunications,media,andtechnologyPublicservices(governmentagencies)InsuranceEnergy,resourcesandutilitiesHightechRetailTravel,transportationandhospitalityLifesciences/healthcareManufacturingConsumerpackagedgoodsOtherN.America(US,Canada)Asia­Pacific(Australia,India,Singapore)Europe(UK,Benelux,Nordics) Priortopandemic Duringpandemic Fiveyearsfromnow(2025)

Figure11:Inaveragecompany,%employeesprimarilyworkingremotely,byindustryandregions

22TheTCSCOVID­19BusinessImpactSurvey2020

Thesurveyfoundsignificantindustryandregionalvariationsinthedigitalcapabilitiesandplansthatweaskedabout,includingdigitalreadiness,investmentindigitaltransformation,revenueimpact,expectedrevenuerecoverytimes,andtheabilitytosupportremoteworkers.Thissectionexaminesthesesectorandregionaldifferencesingreaterdetail.FindingsbyindustryandregionAmongthekeyfindings:WhileNorthAmericancompaniesareaheadofEuropefirmsonmanyindicators,bothEuropeanandAsia­Pacificfirmsarelikelytobeinvestinginessentialdigitalcapabilities,tothepointwherecompaniesinthesetworegionsmaysooncatchuporhaveanedge.Inthenearterm,thesetworegionsalsoappearpoisedtosurpassNorthAmericainremote­worksupport.Inourindustryanalysis,wefoundthatthesectorswiththesmallestpercentageofcompaniessufferingfromrevenuedeclineswerealsothesectorsthatappearedtobethemostcommittedtodigitaltransformationduringthepandemic.Therewereexceptions,however.Althoughnearlynineintenmanufacturerssurveyedsufferedrevenuedeclines,mostmanufacturerswereincreasingtheirdigitaltransformationinvestments.Ontheotherhand,althoughrevenuesinlifesciences/healthcarecompanieshavefaredrelativelywell,theseorganizationsweremorelikelytocuttheirDXbudgets,perhapsbecauseofurgentpandemic­relatedneeds.CurrentdigitalreadinessstatusbyindustryandregionAmongallsectors,hightechandretailleadindeployingthesixessentialdigitalcapabilities(Figure12).Halfofhigh­techfirmshavedigitalsensorstrackingproductandserviceperformance,and36%useAI­basedanalyticstoimprovetheirdigitalCX.Thesecapabilitiesareanaturalfitforhightechfirms,whichconductalargeportionoftheirbusinessonlineandcompeteonthequalityofcomplexproductsandservices.

Sectorsthattrailedinfourormoreessentialdigitalcapabilitiesaregovernment,consumerpackagedgoods(CPG),andenergy.Sector­specificconsiderationsmayaccountforsomeofthevariation.Forinstance,CPGwasaheadofallothersectorsinhostingcoreenterprisesoftwareinthecloud(44%)andtiedwithretailinadoptinganend­to­enddigitalcustomerexperience(39%).YetCPGisamongtheleastlikelysectorssurveyedtousedigitalsensorstotrackproductperformance(17%),perhapsbecausesuchtechnologymaynotbecosteffectiveforlow­ticketCPGproducts.

Inretail,theessentialdigitalcapabilitiesarehelpingtoreducecostsandretaincustomers.Giventhesector'sfiercepricecompetition,arelativelylargeproportionofretailersareusingcoreprocessautomation(44%)andend­to­enddigitalCX(39%)toreducecostsamidthinprofitmargins.Additionally,digitalCXcoupledwithrobustAI(usedby39%ofretailers)arehelpingtodeliverasuperiorcustomerexperience,acriticalstrategyforbuildingretailloyalty.

Figure12:Percentageofcompaniesbyindustrywiththesixessentialdigitalcapabilities

InsuranceRetail

Manufacturing

End­to­enddigitalcustomerexperience Coreenterprisesoftwareincloud DigitalsensorstrackingproductperformanceRobustAIdataanalyticstoimprovedigitalCX Highdegreeautomationofcoreprocesses Keydigitalecosystempartnerships

21% 26% 24% 21%35% 22% 30% 30% 26%21% 21% 32% 26%23% 27% 23%29% 29% 24% 24%29%25% 25% 21% 21%28%

Bankingandfinancialservices

Communications,media,andtechnology

Publicservices(governmentagencies)Energy,resourcesandutilitiesHightechTravel,transportationandhospitalityLifesciences&healthcareConsumerpackagedgoods

PercentofcompaniesintheirindustryHigh%ofcapabilitiesrelativetootherindustriesLow%ofcapabilitiesrelativetootherindustries

18% 16%39% 35% 39% 19%39% 44%39% 44% 17% 11% 17% 17%19%

16%15% 19% 31%35% 18%39% 50% 36% 32% 32%13% 18% 5% 11% 11% 13%6% 17% 11% 17% 11%

32% 14%

32%

23TheTCSCOVID­19BusinessImpactSurvey2020

24

Europeanorganizationslagtheleadingregion(eitherNorthAmericaorAsia­Pacific)byatleast10percentagepointsinfiveofthesixessentialcapabilities.Europetrailssignificantlyinusingdigitalsensors(12%comparedto27%forNorthAmerica)andincoreprocessautomation(15%comparedto28%inAsia).Figure13:Percentageofcompaniesbyregionwiththesixessentialdigitalcapabilities

Regionally,NorthAmericaandAsialeadEuropeindeployingthesixessentialdigitalcapabilities(Figure13).Onbothcontinents,aboutaquarterofrespondentshavethecapabilitiesinplace,comparedtoonly17%inEurope.AgreaterproportionofAsiancompaniesareusingthecloudfortheircoreenterprisesoftware(35%),AItoimproveCX(28%)andareautomatingcoreprocesses(28%).NorthAmericaleadsindeployingend­to­enddigitalCX(29%),digitalsensorstotrackproductperformance(27%)andinestablishingkeydigitalecosystempartnerships(23%).

End­to­enddigitalCXCoreenterprisesoftwareincloudDigitalsensorstrackingproductperformanceRobustAIdataanalyticstoimprovedigitalCXHighdegreeofautomationofcoreprocessesKeydigitalecosystempartnershipsAverage

NorthAmerica Europe Asia29% 19% 22%27% 19% 35%27% 12% 22%26% 16% 28%25% 15% 28%23% 18% 16%26% 17% 25%

TheTCSCOVID­19BusinessImpactSurvey2020

Despiteleadingtheothersectorsinhavingcapabilitiesinplace,high­techandretailarestillinvestingheavily.End­to­enddigitalCX,thecapabilitythatthelowestproportionoftechorganizationshavedeployed(29%),iscurrentlyintheplanningordevelopmentstageat68%oftechfirms,suggestingthatnearlyeverycompanyinthesector(97%)couldsoonhaveanend­to­enddigitalCX.Likewise,initiativesinplanningordevelopmentwouldboostAIanalyticsforCXto97%saturation,coreprocessautomationto89%andcoreenterprisesoftwareinthecloudto89%.Similarly,morethan8in10retailerswillhavedevelopedthesefourcapabilities.

EssentialdigitalcapabilitiesunderdevelopmentbyindustryandregionTheproportionoforganizationsdevelopingorplanningtodevelopeachofthesixessentialcapabilitiesvariedsignificantlybyindustry(Figure14).Forinstance,publicserviceshadthehighestproportionoforganizationsinvestinginenterprisecloudtechnology(89%),comparedtoonlyhalfofcommunications,mediaandtelecomcompanies.Bothenergyandpublicservicesorganizationsweremorelikelytobedeveloping(orplanningdevelopment)infiveofthesixessentialdigitalcapabilities,likelybecausethesesectorshavebeentrailingothersindevelopingthem.

25TheTCSCOVID­19BusinessImpactSurvey2020

Figure14:%ofcompaniesdevelopingorplanningtodevelopthesixessentialdigitalcapabilities,bysectorEnd­to­enddigitalCX Coreenterprisesoftwareincloud Digitalsensorstrackingproductperformance RobustAIdataanalyticstoimprovedigitalCX Highdegreeautomationofcoreprocesses Keydigitalecosystempartnerships

Lifesciences&healthcare

Manufacturing

BankingandfinancialservicesRetailConsumerpackagedgoodsInsurance

Travel,transportation&hospitalityCommunications,media&telecomHightech

Publicservices(government)Energy,resources&utilitiesHigh%ofcapabilitiesplanned/indevelopmentrelativetootherindustries

Europeanorganizationsmaybebehindinadoptingessentialdigitaltechnologies.Nonetheless,mostofthemareinvestingaggressivelytocatchup.EuropeleadsAsiaandNorthAmericaindevelopingthreeofthesixcapabilities—end­to­enddigitalCX(51%),coreenterprisesoftwareinthecloud(51%)andAItoimprovedigitalCX(44%).AndEuropeanorganizationsaretiedwithAsianorganizationsinimplementingafourthtechnology:coreprocessautomation(47%;).

61% 55% 26% 50% 53% 50%54% 54% 38% 50% 69% 62%48% 65% 22% 61% 39% 44%56% 56% 44% 83% 72% 44%63% 53% 32% 58% 53% 47%58% 50% 31% 65% 69% 42%65% 53% 18% 53% 65% 53%68% 50% 21% 61% 57% 46%50% 50% 39% 54% 46% 54%63% 63% 58% 71% 76% 66%67% 89% 28% 78% 72% 72%

26TheTCSCOVID­19BusinessImpactSurvey2020

Still,AsiaissignificantlymoreactivethanEuropeindevelopingtheothertwocapabilities.Forty­eightpercentofAsia­Pacificorganizationsaredevelopingkeydigitalpartnershipsversus36%ofEuropeanones.Additionally,Europestilllagsindeployingdigitalsensors,withonly19%activelydevelopingthem,comparedto40%ofAsianorganizationsand20%ofNorthAmericanones.Figure15:%ofcompaniesdevelopingthesixessentialdigitalcapabilitiesbyregionEnd­to­enddigitalCX 38% 50%

Average 34% 41% 43%

NorthAmerica Europe Asia51%Coreenterprisesoftwareincloud 35% 51% 36%Digitalsensorstrackingproductperformance 20% 19% 40%RobustAIdataanalyticstoimprovedigitalCX 36% 44% 38%Highdegreeautomationofcoreprocesses 42% 47% 47%Keydigitalecosystempartnerships 31% 36% 48%High%ofcapabilitiesplanned/indevelopmentrelativetootherregions

Ontheotherendofthespectrum,morethan10%ofrespondentsinfoursectorssaidthattheirrevenueshaveincreased.Insurancefirmswerethemostlikelytoreportanincrease(23%)followedcloselybyCPG(22%).Thesesectorsbenefittedfromnervousconsumersseekingextrasafeguardsandstockpilingsupplies.Retailbenefittedaswell,frompeoplemakingpurchasestokeeptheirfamiliesoccupiedandcomfortable.Thelifesciencesandhealthcaresector,groundzerosforthecrisis,hasalsofaredwell,withCOVID­relatedspendingoffsettingtheneedtopostponenonessentialprocedures.Fewerlifesciences/healthcareorganizations(42%)reportedarevenuedeclinethanothersector,and16%reportedanincrease.

RevenueimpactofpandemicbyindustryandregionOverall,nearlysevenintenorganizations(68%)haveexperiencedrevenuedeclinesduringthepandemic,butthesurveyfoundalargevariationbysector(Figure16).Infoursectors,morethan80%ofrespondentsreportedrevenuedeclinesinthepandemic:manufacturing(89%);travel,transportationandhospitality(88%);hightech(82%);andenergyresourcesandutilities(82%).Inthreeofthesesectors—travel,hightechandmanufacturing—nocompanysaidtheirrevenuehasincreased.Manufacturingandtravelhavesufferedfromtheneedforpeopletophysicallydistance,whilethetroublesintheenergysectorarewellknownamidsteepdropsinenergyuseandprices.

27TheTCSCOVID­19BusinessImpactSurvey2020

Figure16:Revenueimpactofthepandemicbyindustry IndustryBankingandfinancialservicesTotal Insurance ConsumerpackagedgoodsRetail Lifesciences/healthcare Communications,media,andtechnology Travel,transportationandhospitality Hightech Manufacturing Energy,resourcesandutilities PublicservicesDecreasedStayedthesameIncreased68%24%8%

58%34%8%50%27%23%

61%26%13% 22%22%56% 42%42%16% 8%23%69% 88%12% 18%82% 89%11% 82%16%3%56%44%

Regionally,firmsreportingrevenuedecreasesweremorecommoninEurope(70%)andNorthAmerica(69%)thaninAsia(64%;Figure17).ThiscouldbeattributedtothestrictconfinementregimesintheEuropeanUnionandthestill­strongcrisisintheUnitedStates.RevenuesweremorelikelytoremainstableatAsianfirms(33%);only3%reportedanincrease.Giventhesizeandmakeupofthesurvey,however,it’sdifficulttodrawinferencesfromthedata.InEurope,forinstance,anoutsizedrepresentationfrominsurancefirms(12%versus3%inAsia)mayexplainthehigherproportionofEuropeanorganizationsexperiencingrevenueincreases.Similarly,alargerproportionofenergycompanies(8%inEuropeversus3%inAsia)mayhaveskewedfindingsonrevenuedecreases.Figure17:Revenueimpactofthepandemicbyregion

Amongorganizationsthathadsufferedrevenuedeclines,insuranceandhightechfirmsarethemostoptimisticaboutaspeedyrecovery(Figure18).Giventhestrongperformanceoftheinsuranceindustryduringthepandemic,asdiscussedabove,thesector'soptimismappearsjustified.Thehightechindustry'spositiveoutlookmaybedrivenbythevitalrolethattechnologyisplayingduringthepandemic,andthefactthatthevastmajorityoforganizationsplantomaintainorboostdigitaltransformationspending.Sectorsanticipatingaslowerrecoveryincluderetail–where43%sayitwilltaketwotofiveyears–travel(43%)andmanufacturing(40%).Thesesectorsmayallbesufferingfromtheeconomicandoperationalconstraintsposedbyphysicaldistancingrequirements.

DecreasedStayedthesameIncreased69%23%8%

70%19%11%64%33%3%

RegionEurope Asia­PacificNorthAmerica

28TheTCSCOVID­19BusinessImpactSurvey2020

Figure18:Expectedtimetorevenuerecovery,byindustry(forfirmswithrevenuedeclines)

Acrossthethreeregions,thereislittlevariationinthelikelihoodthatcompaniessufferingrevenuedeclinesbelievetheywillrecoverwithintwoyears:61%forNorthAmerica,58%forEuropeand54%forAsia(Figure19).Europeanfirms,however,aresignificantlylesslikelytoexpectrevenuestorecoverwithinayear(10%)comparedtoAsian(22%)andNorthAmericanfirms(28%).NearlyhalfofEuropeanfirmsforeseerevenuerecoveryinonetotwoyears.Asiancompaniesweremorereluctanttomakeaprediction;19%saiditistooearlytotellwhenrevenueswillrecover.Figure19:Expectedtimetorevenuerecovery,byregion

28% 30% 24%Lessthan1year

2­5years1­2years5+yearsTooearlytotell

NorthAmerica RegionEurope Asia­Pacific28%33% 10%48% 22%32%2%9% 0% 3%12% 19%

IndustryBankingandfinancialservices Insurance Retail Communications,media,andtechnology Travel,transportationandhospitality Hightech Manufacturing Energy,resourcesandutilitiesLessthan1year 10% 31% 21% 22% 14% 30% 16% 19%2­5years1­2years5+yearsTooearlytotell

43% 39% 36% 44% 36% 35% 32% 32%24% 23% 43% 28% 43% 13% 40% 32%5% 4% 0%19% 8% 6% 7% 17% 12% 16%(Note:theCPG,lifesciences/healthcareandpublicservicesectorsarenotshownbecausethenumberofrespondentswithrevenuedeclinesyieldedanexcessivelysmallsamplesize.)

Inanalyzingthesurveyresults,onethemerecursconsistently:Theprecipitouschangestriggeredbythepandemicrenderdigitalcapabilitiesmorevitalthanever.Yetaswediscovered,mostorganizationsareatthebeginningofthedigitalmaturitycurvewithglaringgapsintheirdigitalreadiness.Thedigitaldemandsofthepandemicareforcingtheseorganizationstoacceleratetheirdigitaltransformation,withthemajorityactivelydevelopingorplanningtoimplementthesecapabilities.Buttheacceleratingtransformationthatisunderwayisnotonlyaboutperformingbetterduringthepandemic.Thechangeswillendureoverthelongterm.Assuch,despitecashconstraints,thereisanimperativetoturncurrentinvestmentstolong­termadvantage.

Calltoaction:Thrivingamidpandemic­drivendigitalurgencyandbeyond

StrategicchecklistToimplementthesechangeseffectively,companiesshouldpursuethefollowingactions:Pivotandthrive Coalescearoundavisionofthecompany'splaceinthedigitalecosystem.Thisinvolveshavingastrongknowledgeofdigitaloperatingmodelsanddigitallyenabledproducts,andapurpose­drivenapproachtounderstandingwherethecompany'sbeststrategicopportunitieslie. Continuallyexperimentwithnewdigitalbusinessmodels,digitalproductsanddigitalprocesses.Thisrequiresembracingriskbecausethereisnoinnovationwithoutrisk.Butcompaniescanreduceriskthroughagiledevelopmentofproductsandbusinessprocesses,rapidonlinefeedbackandflexiblebusinessmodelplanning. Engineerdigitallyflexiblesupplychains.Asthepandemichasdemonstrated,theabilitytoshiftproductionanddistributionrapidlyfromcross­bordertointra­borderisessentialtoresilience.Buildanadaptivecore Automateeverymanualactivitythatcanbeautomated,usingAItoimprovethemcontinually.Automationbuildsrobustcompetitiveefficienciesandfreesemployeestopursuehigher­valuetasks. CreateanirresistibledigitalCX.OrganizationsmustbeabletopersonalizethecustomerexperienceforthemassesusingAIandautomation.Theyshouldsimplifyinteractionsbefore,duringandafterthepurchase,andwherenecessaryprovideadigitallyintensivesensoryexperience(whichoftenrequirestheimmensecomputationalpowerofcloudproviders). Identifynewtasks,skillsandjobsthatcan'tbeautomated,andtrainpeopletomasterthem.Adigitalstrategywillcreatenewopportunitiesandimposenewdemandsonemployees.Upskillingisavitalundertakingtoensurethatthecompanycanappropriatelyhandlethenewwayofworking.

30TheTCSCOVID­19BusinessImpactSurvey2020

31

Keeptheremoteworkforceagile,productive,energized,healthyandsafefromcyberattacks.Remoteworkingisheretostay.JustascompaniesdesignITandofficestoensureexcellentresults,theyneedtooptimizetheremoteworkingexperience. Capitalizeonaglobalmarketfortalent.Thetrendtowardremoteworkenablestalenttoworkfromanywheretheycantaptheinternet.Thisexpandstheopportunitytohiregreatemployeeswhowouldn'thavejoinedacompanyiftheyhadtoreporttooneofitsoffices.Conversely,itposesthreatsasrivalfirmscompeteforyourbesttalent.Webelievethatbyundertakingthesesteps,organizationscancapitalizeonthepotentialofdigitaltransformation,andcompeteeffectivelyinthenewera.

Protect,empowerandretaintalent Createasuperioremployeeexperience,especiallyforremoteworkers.Asthebattlefortalentgoesglobal,thequalityoftheemployeeexperiencewillbemoreimportantthanever.

TheTCSCOVID­19BusinessImpactSurvey2020

32

1. Creatingexponentialvalue.Thisentailsdeconstructingtraditionalvaluecreationconceptstounveilnewopportunities.Bigdata,IoT,andAIallowlinkagesandcross­selling,whichenablebusinessestolookbeyondshort­termrevenueopportunities.

4 Embracingriskbytappingthecloudandagileexperimentation.Digitaltechnologiesandagilemethodologieshaveenablednewlevelsofflexibility,allowingbusinessestoembraceriskandcapitalizeonhighreturns.Tomaximizedigitaladvantage,businessesneedtothinkbigandfocusonthepotentialvaluetothecustomer,ratherthantheriskinvolved.

Business4.0is thatcapitalizeondigitaltechnologyandcreatecustomervalue.TCS’frameworkofbusinessbehaviorsItcomprisestheseessentialbusinessbehaviors:2.Drivingmasspersonalization.Digitaltechnologiesenablebusinessestocustomizeatscale.AI­basedanalyticsallowanalmostinfinitescopeofcustomersegmentationacrossarangeofvariables.3. Leveragingdigitalecosystems.Digitaltechnologiesareredefiningindustryboundaries,enablingbusinessesacrossindustriestocollaborateanddelivergreatervaluetothecustomer.Theuseofapplicationprograminterfaces(so­calledAPI­fication),analyticsanddigitalplatformshaveelevatedcross­companyandcross­industrycollaborationtoanotherlevel.

TheTCSCOVID­19BusinessImpactSurvey2020

TMBusiness4.0 :Harnessingthetransformativepowerofdigital

33TheTCSCOVID­19BusinessImpactSurvey2020

Appendix:Surveydemographics ByregionAbouthalfofour287surveyparticipantswerebasedinNorthAmerica,withaquarterinEuropeandafifthinAsia­Pacific. HeadquarterswereinNorthAmerica(54%),Europe(25%)andAsia­Pacific(20%).

N.America(US,Canada)Europe(UK,Benelux,Nordics)Asia­Pacific(Australia,India,Singapore)

Region54%

25%20%

34

Byrevenue Mostoftheorganizations(63%)hadrevenueofatleast$5billion.Some28%hadrevenueofmorethan$20billion.3% 34%19%15%8%8%5%4%1%2%

LessthanUSD$1billionUSD$1billiontolessthan$5billionUSD$5billiontolessthan$10billionUSD$10billiontolessthan$20billionUSD$20billiontolessthan$30billionUSD$30billiontolessthan$40billionUSD$40billiontolessthan$50billionUSD$50billiontolessthan$75billionUSD$75billiontolessthan$100billionUSD$100billionormore

TheTCSCOVID­19BusinessImpactSurvey2020

35

Bysector Wesurveyedorganizationsin11sectors.Thegreatestnumberofrespondentswerefromtheenergy(13%)and banking&financialservices(13%).13%13%10%10%9%9%8%7%6%6%6%2%

Energy,resourcesandutilitiesBankingandfinancialservicesManufacturingHi­techCommunications,media,andtechnologyInsuranceRetailLifesciences/healthcarePublicservices(governmentagencies)ConsumerpackagedgoodsTravel,transportationandhospitalityOther Bymanagementrole Themajorityofoursurveyparticipantswereatthevicepresidentlevelorabove.Aboutathirdwerechief executivesorchiefoperatingofficers.

42%34%

18%6%

DirectorChiefoperatingofficerorotherC­levelexecutive

EVP,SVP,VPOther

TheTCSCOVID­19BusinessImpactSurvey2020

TCSDesignServic

esIPI09I20

Allcontent/informationpresenthereistheexclusivepropertyofTataConsultancyServicesLimited(TCS).Thecontent/informationcontainedhereiscorrectatthetimeofpublishing.Nomaterialfromheremaybecopied,modified,reproduced,republished,uploaded,transmitted,postedordistributedinanyformwithoutpriorwrittenpermissionfromTCS.Unauthorizeduseofthecontent/informationappearingheremayviolatecopyright,trademarkandotherapplicablelaws,andcouldresultincriminalorcivilpenalties.Copyright©2020TataConsultancyServicesLimited

ITServicesBusinessSolutionsConsulting

AboutTataConsultancyServicesLtd(TCS)TataConsultancyServicesisanITservices,consultingandbusinesssolutionsorganizationthathasbeenpartneringwithmanyoftheworld'slargestbusinessesintheirtransformationjourneysforthepast50years.TCSoffersaconsulting­led,cognitive­powered,integratedportfolioofIT, business and technology services, and engineering.This is delivered through its unique Location IndependentAgile deliverymodel,recognizedasabenchmarkofexcellenceinsoftwaredevelopment.A part of the Tata group, India's largest multinational business group, TCS has over 448,000 of the world's best­trained consultants in46countries.ThecompanygeneratedconsolidatedrevenuesofUS$22billioninthefiscalyearendedMarch31,2020andislistedontheBSE(formerlyBombayStockExchange)andtheNSE(NationalStockExchange)inIndia.TCS'proactivestanceonclimatechangeandawardwinningworkwithcommunitiesacrosstheworldhaveearneditaplaceonleadingsustainabilityindicessuchastheDowJonesSustainabilityIndex(DJSI),MSCIGlobalSustainabilityIndexandtheFTSE4GoodEmergingIndex.Formoreinformation,visitusatwww.tcs.com

ToknowmoreVisithttp://on.tcs.com/covidimpact19Email:TL.Institute@tcs.comFollowusonsocialmedia:Facebook:TataConsultancyServicesLinkedIn:TataConsultancyServicesTwitter:@TCSInstagram:@tcsglobal