Digitalization investment in times of crisis
Posted by: Paanukoski Egor
Like any other business segment, supply chain logistics has been hit very hard by the Covid-19 pandemics. If top management thought that laying off the front and the back office combined with “cheap” but cumbersome legacy systems would carry the business through the hard times, this management is wrong. The immediate post-Covid business environment will get tougher as it will demand higher efficiency and flexibility with lowered fixed costs.
Why now is probably the best time to make a decision and carry out digitalization overhaul in the organisation:
- Top management should no longer view digitalization projects as some kind of fancy pancy ideas coming from the CIO office, instead, it should view them as a way to cut high costs on a long-term basis and a chance to stay in the game in the inevitable restructuring and even more fierce competition, once the COVID-19 is subdued, in every business segment of the supply chain.
- the cost of onboarding digital solutions has dropped significantly not least thanks to SaaS modelling, for example in the air cargo handling field, a monthly subscription fee to a SaaS platform which provides the backbone for front and back offices operations equals a monthly salary of a few employees.
- reduced workforce can be trained more efficiently and more in-depth.
- reduced workload and volumes can make smoother migration to a new system
- once the economy starts to rebound, companies will be able to reap some fruit from made investments primarily in the form of higher efficiency such as handling higher volumes with less staff. Additionally, any similar future force majeure situations like pandemics will have these companies better prepared.