10 May 2021
Econ 4.0: Are you well connected?
Here’s a nice networking narrative: Mark, a marketing manager at a major manufacturing multinational, was depressed about not being able to attend physical meetings, conferences and networking events. The pandemic had put a stop to all his global travel — in business class. He was suffocating, being forced to get on concalls, conferences and webinars on Zoom, Teams and WebEx. He was becoming claustrophobic, confined to a small, soundproof room at home, which was now his office.
Then, suddenly, the regulators announced that physical events with up to a hundred participants would be permitted. Mark was delighted and got his company to sponsor the first physical event where his CEO would deliver one of the keynotes. The organisers invited Mark to give a short welcome speech.
“I’m delighted to be allowed to speak at this momentous event,” Mark began on stage on the day of the event. “I was told to be brief, quick and to-the-point. I promise I will be as brief as possible, no matter how long it takes.”
If that quip made you smile, you’re not alone. Managers, ministers and microphone lovers the world over have been desperately missing meetings and musings, symposiums and seminars, and conferences and corporate events. As governments gradually remove pandemic-induced restrictions and businesses begin to reopen, there’s a sense that we might be on the verge of returning to “normal”. Is that possible?
“That is unlikely,” says a McKinsey study. “The crisis has made the home a multifunctional hub, a place where people live, work, learn, shop and play. This will be especially true as a growing number of global organisations and employees attempt to sustain some of the advantages of working remotely that they have now experienced.”
Collaborate to win
The result? A spike in collaboration and networking software and services. The global social software and collaboration market is set to hit US$4.5 billion this year, up 17.1% from 2020, according to the latest forecast by Gartner. The need to support remote work during the pandemic and social software integration with other enterprise apps is driving this growth.
“Many of the existing use cases propelling the social and collaboration market, such as coordinating a distributed workforce and providing a ‘virtual water cooler’, got a sudden jolt from the pandemic,” says Craig Roth, research vice-president at Gartner. “Social and collaboration tools went from a ‘nice to have’ to a ‘must have’ within a matter of weeks.”
Even as some workers begin to return to offices, the pandemic has caused permanent changes in workforce structures that will require additional investment in technologies to facilitate, capture and organise open conversations and information sharing. Gartner predicts that by 2025, nearly 65% of enterprise application software providers would include some form of social software and collaboration functionality in their products and services.
“Providers of packaged business applications, such as ERP (enterprise resource planning) and CRM (customer relationship management) software, previously offered basic social and collaboration functionality,” Roth says. “However, they are now facing heightened expectations about the seamless inclusion of non-routine tasks, such as conversations and marking up content, within their process-oriented products. Partnerships between software providers will take on more importance, as a close relationship is required for tight integration of disparate application functions.”
At the core is connectivity or networking gear. That has become crucial for companies, given that they have become more distributed in the face of the pandemic. The role of connectivity will continue to grow in the future as organisations need to support a wave of remote workers, resulting in an increased reliance on cloud platforms and video collaboration tools turned into mission-critical apps.
“To harness the power of connectivity, organisations will need to overcome the complexity of managing connectedness at scale — with the security that modern digital businesses require,” says Hugh Ujhazy, vice-president for telecom and IoT research at IDC Asia-Pacific. “This will spur investments in new infrastructure and architecture by enterprises around the region.”
Enterprise connectivity is already starting to define the future resiliency of an organisation. Ones that can harness the power of intelligence through strategic innovation and digital platforms for greater customer engagement are showing more resiliency — and would be better positioned to thrive.
“We believe that the future of connectedness will become a bedrock of every organisation’s digital resiliency agenda,” Ujhazy says. “That’s because organisations look not only for real-time insights but also digital experiences which are scalable, secure, reliable and fine-tuned to dynamic use cases.”
Much of that scalability and security has moved from the office to the home and from constant physical connections to impersonal virtual ones. “Along with employee burnout and anxiety has come a lot of soul searching,” notes McKinsey. “After a year of the pandemic, people are re-examining and re-making every part of their lives, especially their jobs.”
Work is worship
A recent McKinsey survey found that more than 70% of employees said their work defines their sense of purpose. Companies that ignore this do so at their peril because employees also say that if their job does not give them meaning, they will leave for one that will.
The pet peeve? Inability to travel and connect with people and places, either for business or leisure. The airline industry has become the most vulnerable. Alex Dichter, a senior McKinsey partner, estimates that the aviation industry may take on as much as US$1.1 trillion in new debt by 2024. A triumphant return to profit will depend on its ability to restructure, raise equity and invest for growth.
Here are five other vital pointers from McKinsey:
• For automakers and other mobility companies, the future will be clean, connected and electric.
• Fuel retail will also be affected. The industry has thrived by offering well-stocked convenience stores. Now, forecourt owners will need to add new lines, including electric vehicle charging.
• The resumption of the credit cycle will offer new opportunities in consumer lending.
• Eat your own cooking: semiconductor companies make the chips that make AI possible and can benefit by applying AI to their own operations.
• Every industry is moving to the cloud — but not all will succeed. Those that do will reap enormous dividends.
Cloud adoption in Asean is still slow, but it has enormous potential to grow, especially if SMEs (small and medium enterprises) jump at this opportunity. SMEs are one reason the market for cloud-related services is set to grow 24% a year for the next five years. SMEs are the backbone of the Asean economy. Cloud computing could level the tech playing field for them.
Cloud and connectivity can help Malaysia in two vital sectors — manufacturing and services. The services sector employs 62% of Malaysia’s workforce, while the manufacturing sector employs 17%. But then, manufacturing is a significant component of Malaysia’s economy and contributes about 23% to its GDP. Up to 98% of companies in the manufacturing sector are SMEs. Services employ more people since services need a substantial human component, while manufacturing requires a significant capital outlay.
The bottom line: Are you well connected? “Connectedness carries many benefits,” notes an article published in the Harvard Business Review on Aug 5, 2020. “Regardless of managerial status and rank, employees who were more well connected in our study were generally more engaged (they were more excited to come to work to do their job). Employees who fell in the top 20% of most frequent email senders were 6% more engaged than those who fell in the bottom 20%.”
The most connected people are thought to be in show business. “I couldn’t believe my parents supported my choice of profession,” my friend once told me. “I told them that I wanted to become a stand-up comedian. They laughed at me!”