The Digital Acceleration of the "Post COVID" Era

Article by Mr. Vitounis Spyros, Economist, MSc, Mphil

The article was published in the third issue of STIGMA magazine entitled “Digital Age. The Dawn of a New Type of Business and Employees”

The advent of the digital age is characterized by the term "4th Industrial Revolution". Its evolution, as well as its effects on social and economic development, have been the subject of studies and discussions at domestic and international level, especially in recent times. But at the same time with the digital transformation, all societies are experiencing the COVID-19 pandemic, which sets new rules and restrictions on people's daily lives, interpersonal relationships, employment and economic issues in general. It is a common finding among economists that the pandemic played the role of catalyst, accelerating the use of new technologies in many aspects of economic life. For example, there has been a dramatic increase in the use of digital technologies that help reduce face-to-face interactions and ensure the health and well-being of customers and employees. These digital technologies include consumer applications, such as grocery and food delivery services, business e-commerce applications, and teleconferencing applications. Internet searches for the term "contactless" increased 7 times between November 2019 and the end of April 2020, while shares of technology companies aligned with new concerns about the health and safety of customers increased.

A common cliché in the business world is that "the crisis creates opportunities." The opportunity posed by the COVID-19 pandemic lies in the fact that society has come into direct contact with the future, which is now being experienced as part of the use of digital technology. Therefore, companies should immediately decode the new data and adapt to it. In particular, regarding the Greek market, the opportunity is great and those companies that take advantage of it will lay a solid foundation for their viability and profitability, in the long run. The competitive advantage that companies that will immediately adopt new digital technologies will gain is documented by the following conclusions of the BSE Digital Transformation Observatory:

(a) Greek companies are characterized by a "lack of a digital transformation compass". While 90% of companies consider transformation to be of strategic importance, only 48% have a digital strategy, while only 50% have a responsible manager. Only 11.1% seek digital solutions to increase revenue, 10% seek Data Analytics solutions to improve customer service and only 9.5% exchange data with partners and suppliers. In the last three years, one in two small and medium enterprises (53.5%) did not invest at all in digital solutions, or invested less than € 100,000.

(b) Our country is at a very low level, in terms of the use of Information and Communication Technologies (ICT) in relation to the European Union average. Specifically, the technological maturity of companies in Greece remains low (26th), with technologies that focus on internal support (12th) and not on solutions such as Cloud (28th), RFID (26th), electronic invoicing (27th), e-commerce (28th) ), EDI trading (27th). Also, the digital skills of the workers are low, as the country is in the 25th position of the EU, despite the sufficient number of graduates in positive and technological sciences (13th).

From the above, it becomes clear that companies, which will adopt digital strategies in a market that is in its infancy, will consolidate their position in the market and expand it. The strategies, in general, that it is necessary to explore their use in the first phase, are listed below, in combination with the expected benefits that have already been observed to bring:

(a) Use of the "Cloud", a function that gives improved data accessibility, secure file keeping, automatic updates of various software, possibility of remote work.

(b) Use of "RFID" technology (radio frequency identification), which leads to increased productivity (due to process automation), increased competitiveness (due to continuous and real-time control, where product traceability is achieved at the same time) and reduced operating costs (avoiding devaluation of stocks, reduction of errors and losses).

(c) Use of electronic invoicing and EDI (Electronic Data Interchange) technology, which results in a first year reduction in operating costs (cost per invoice for retail companies can be reduced by approximately 80% with full electronic invoicing, while reducing by 60% the administrative costs) and in the second year acquaints the company with electronic means and leads it to the expansion of digital activities, such as e.g. electronic orders and price lists.

(d) Adoption of e-commerce and digital marketing, which result in higher business exposure, low cost, customer feedback at regular intervals, easy data analysis and uninterrupted business operation (especially important in the COVID-19 era).

At an applied level, whether a company is active in the field of trade or in the field of services, the above applications will add value to the daily and overall operation. For example, a commercial enterprise that uses RFID to monitor its warehouse, combined with electronic invoicing and digital marketing, not only reduces operating costs, but also increases its sales over the competition. Respectively, a catering company, which uses order management software, increases its productivity (reduction of service times and errors), while at the same time keeping an electronic record of its sales, in order to directly control the trends and habits of customers, but also to makes rational orders for raw materials and reduces possible losses of vulnerable stocks (reduction of operating costs).

As mentioned above, the pandemic brought the future to the present, in terms of digital transformation. The investigation and adoption of a digital transformation strategy of all companies should take place immediately, as it is expected that a large amount of funding - grants in the next period (2021-2027) will be directed to these actions, shaping its economic and business environment of the current decade.