Enhancing and Restoring Safety & Quality Cultures - Dave Litwiller - May 2024...
COVID 19 IT World
1. Post COVID - IT World
B2B Sales & Digital Transformation
Across Industries
Balance Sheet Impact & Levers to Address
2. This is a collection
of my blogged articles on various topics from
sales to the digital economy
in a
Post COVID World
3. 3
COVID - Impact
Digital First
Transformation
Data Centre
and Data Analytics
Verticals - Changes in IT Spend
Cost
Optimisation
Levers
Source: Gartner, Forrester, Forbes, IDC
Mobility
UFC/ReWkg
eCommerce
Shared
Services
Cloud
First
RPA/AI/ML
Rationalise
Ent. Apps
Improve IT
Fin. Practice
IT Asset
Mgmt. Practice
Reshape IT
Demand Side
Spending
Workforce
Optimisation
IT
Trends
in
Demand
Health Care
Source: gettyimges.com
Education
Communications
Government
Retail
Tourism & Rec.
Oil & Air Services
Manufacturing
Transportation
Financial Services
Verticals - Trends in IT Spend, Cost Optimisation and Demand
Medium to Short Term
4. 4
Post COVID
Dynamic Demand Profile Impact
B2B Sales
• Enable Remote and Virtual Sales
• from 10% to > 35% virtual engagement on the rise
• field sales sentiment dropped to 42% from 63%
• Enable Sales Analytical Capabilities
• focus on quality than volume of pipeline
• historical analysis is of little help
• Buyers need more help
• because they are struggling with new engagement
• need discovery and dialog from sellers
• Buyers are revising the buyers map
• catering for change in engagement model
• Buyers risk appetite has jumped from 20% to 33%
• trying new revenue generation channels
• resilience and continuity of operations driving the rollout
• ex digital workplace or securing remote working
• Marketing team is in a state of flux on how to position
• because engagement model has changed
• Sellers need to prepare demand profile and validate it with buyers
• because future is uncertain and no one knows what is ahead
• collectively walkthrough short, mid and long term needs
• get commitment to ongoing initiatives
• Domain Skills in Demand
• automation, cloud, agile delivery via Scrum and DevOps
Source: HBR, Gartner, Sales Academy, Forrester, Mckinsey, Forbes, BCG
Pre COVID
During &
Post COVID
Virtual Sales
Engagement
10%
35%
Buyers
Risk Appetite
20%
33%
5. 5
• Economic activity is subdued, demand profile is
skewed, slow recovery to begin in next 1-2 quarters
• Sales Team to chase Need and Quality Based Rev.
• Sales based Revenue to be a no go zone
• Decoder & Yes Man type sales rep will do well
• Trusted advisor will prepare for pent up demand
• Sales rep with below par performance in past will
struggle to survive, most reps will miss targets
• Economic activity to rise sharply with pent up
demand
• Some verticals to have “V” shape recovery
• Sales Team to chase Need and Sales based revenue
• CX is non negotiable for portfolio mix
• Consensus Builder and Decoder will do well
• Trusted Advisors to facilitate in meeting pent up
demand
Low High
Low
Supply
Complexity
High
Price Taker
Yes Man
Profit Taker
Consensus Builder
Demand
Complexity
Commercial Insight
Trusted Advisor
Wish Fulfillment
Decoder
Pre Covid
Post Covid
During
Pandemic
Post COVID
B2B Sales
• Economic activity was upbeat, demand profile was
bullish
• Sales Team chased Sales based and CX based revenue,
suffered in quality
• Need based Revenue became 2nd priority
• Consensus Builder and Yes Man type Sales rep
in respective zones did well
• Trusted Advisor created new territories
• Sales rep with below par performance survived
or shielded
Source: Gartner, Sales Academy, Forrester (Death of A B2B SalesMan), HBR, BCG
▪ Ongoing pandemic has created a challenge
for B2B Sales Team in positioning their
offerings, to go for innovation or align with
conserve cash sentiment
▪ By analysing demand vs buyer profile with
sales style execution, Sales team can
navigate these uncharted territories and
prepare for the future
6. 6
SoftwareAssetsInfrastructureAssets
Virtual
Physical
Demand Centric
Fulfillment Centric
SecurityOverlay
ITAssetsSetup
Digital 1.0
Digital 1.0
Digital 2.0
Digital 2.0
Post COVID
Digital and Cloud on Fire
Pre COVID
Digital 1.0Digital 2.0
Digital 2.0
• Primarily business driven, business owners controlled spending
• Demand centric or CX centric assets transformed with no major
change in Fulfilment assets
• Cloud delivered on promise, CX with partial success, others like
RPA, ML, AI yet to deliver on ROI
• Overall IT spend is in decline by 5-7% FY20 & 1H FY21, however
digital and cloud spend is on the rise, driven primarily by Resilience,
ex. JIT supply chain is adapting to Resilience during pandemic
• Standardised Demand Centric Assets consulting and rollout is
growing underpinned by the rise in digital channels for revenue
generation
• Transformation for Fulfilment Assets are on the rise as the need for
information harnessing, manageability & flexibility grows
• New Tech Normal - Cloud becomes a platform of choice,
Optimisation of business process and hybrid workloads on the rise
via automation for OPEX relief, RPA, ML, AI are revived to fulfil the
change in demand profile
• Infrastructure and services outsourcing on the decline
• Concern for Remote Working and IT Assets security driving the rise
in ringfencing
• Fulfil the tactical demand during pandemic and the pent up demand
Post COVID for vertical & bespoke (expensive) solutions
During &
Post COVID
Digital 2.0
Source: Gartner, BCG, HBR, Sales Academy, Forrester, Mckinsey
7. 7
Cost Revenue
Fulfillment
Demand
Side
Generation
IT
Transformation
Be Agile & Digital
Economics
Post COVID
Digital Transformation
• Primarily business driven
• Chasing sales revenue and CX enhancements
• Business owners controlled spending
• Business centric or CX centric assets transformed
with no major change in back end assets
• Cloud delivered on promise, CX partial success,
others RPA, ML, AI yet to deliver on ROI
• Primarily resilience driven
• Chasing mixture of sales & need driven revenue
• CX is non negotiable
• Fulfil pent up demand for vertical & bespoke
solutions
• Transform back end assets as need for
information manageability & flexibility grows
• New Tech Normal - Cloud becomes platform of
choice and RPA, ML, AI are revived to cater for
change in demand profile
• Primarily tactical driven
• Chasing need driven sales revenue and CX
• Controlled Cost & Cash Conserved
• Not sure to be innovative or pay the bills
• Building pent up demand for vertical &
bespoke solutions
• Information harness is required
• RPA, ML, AI on backburner for next half
Source: Gartner, HBR, Sales Academy, Forrester, Mckinsey
Digital transformation is about moving from
demand fulfilment to demand generation of
customers
Pre Covid
During
Pandemic
Post Covid
8. 8
• M&A for Digital Tech – SME’s are leading digital transf., buy cash starved, or for talent/IP
• New Digital Products or Service on COTS - standardisation saves cash, bespoke is expensive
• JV with a Digital Tech Company
• Conserve Cash and Invest Equity in a Digital Business – piggy back to fulfil pent up demand
• Open Super Hackathon for Public – innovate and resolve challenges with others participation
• Bootstrap a Digital Startup with VC Fund
Post COVID
Digital Growth - Strategic Levers
Following levers can be applied by services organisation to take advantage of the rise in
digital dollar spend driven by business and accelerated by COVID. These options are
easy to execute and with good returns for invested capital.
Source: HBR, Gartner, Sales Academy, Forrester, Mckinsey, Forbes, BCG
9. 9
Digital Revenue
Growth Levers
High
ExistingRevenueEmerging
Low Demand
BAU
Existing Revenue
Transformative
Platform Revenue
Pilot/Experimental
Connected Revenue
New
Industries
Revenue
• Existing Revenue
• Sell Existing Digital Assets like IP, S/W, Algorithms, S/W
• Contract Based on Shared Risk Outcome
• Connected Revenue
• Digitalise Product or Service
• Sell Metered Revenue - selling on a pay-as-you-use basis
• Platform Revenue
• Run Platform as a business
• New Industries Revenue
• Tesla – moved from battery to car
• May need to acquire or partner with other companies to make
the leap to a new industry and shield the main brand
Source: Gartner, HBR, Sales Academy , Forrester, Mckinsey
10. 10
COVID - Impact
Digital Engagement & Use Cases
Digital
Engagement
Predictive
• Expense Reduction
• Improve Experience
Reactive
• Expense Reduction
Prescriptive
• Expense Reduction
• Improve Experience
• New Revenue
Multi
Channel
Omni
Channel
Dynamic
Channel
Pre - Covid Use Cases
Post - Covid Use Cases
Source : Gartner, Forrester
11. 11
Cost Revenue
Fulfillment
Demand
Side
Generation
IT
Transformation
Be Agile & Digital
Economics
Digital Business
Economics Behind IT
Source: HBR, Sales Academy, Forrester, Mckinsey, Forbes, BCG
• Digital transformation is about moving from
demand fulfilment to demand generation of
customers.
• To survive in todays marketplace, business has to
transform into Digital Business leveraging Digital
Transformation.
Small Large
LowPriceHigh
Max Profit
Quantity (Vol)
MR = MC
MR > MC MR < MC
Economic Model for
Non - Digital Business
or
Traditional Brick & Mortar
• Economic Model for Non Digital Business is restricted in infinitesimal
growth by the limitation of how maximum profit is achieved.
• Every increase in incremental Revenue is matched by incremental Cost i.e., to
expand the revenue base cost base has to be increased, resulting in similar
profit before the expansion of revenue or cost.
• A ”True Digital Business” doesn’t suffer from restriction of infinitesimal
growth because any increase in incremental cost leads to rise in incremental
revenue by multiple times. To achieve this, a digital business has to be
multisided and leverage network effects. If a Digital business underpinned
by Digital assets is not opened up upstream and traditional monetising
model is applied like what News Corp. did with Myspace then that business
can not survive marketplace.
• Digital companies like Amazon, Netflix, Facebook has P/E ratio as 117, 89 &
31 respectively. Any P/E ratio above 15 indicates a growth stock, but to have
P/E above 50 and 100 shows how investor sees return from these digital
companies.
12. 12
Quick Wins
(1 -2 months)
T&E Restrictions
Reprioritise
Reduce non core
functions or sites
High
LowImplementationHigh
Low Cost Savings
Strategic
and
Futuristic
Reduce Product
Offerings
Wins
(2 or 3 Qtrs)
Furloghs
COVID - Impact
CSP - Priorities
Impacts across Key Segments
Emergency Services & Govt Ops
• Ensure network & IT, cloud and mobility infrastructure has no
disruption
• Anticipate demand for health care facilities or hotspots
• Strengthen & secure assets from criminal & rogue elements
Consumer Services
• Uninterrupted emergency services like 000
• Anticipate high demand on data
• Give financial relief so that critical infrastructure is not
interrupted
• Maintain & enhance consumer solutions for online learning,
streaming, social interactions
Internal Operations
• Ensure Digital channels to be the mode of engagement
• Run sensitivity analysis on critical staffs ability to operate (war
games)
Partner Relationships
• Set expectations for remote delivery & collaborations
• Expand supplier range for increasing capacity
Enterprise Solutions
Source : BC, Gartner, Forrester
14. 14
COVID - Impact on IT
Address - Twin Balance Sheet
Source: Forrester, Gartner, BCG, Forbes
Long Term Debt
Goodwill & Other
Intangible Assets
Shareholders
Equity
Assets
Operational
Assets
Current Assets
Current Liability
Pre–Covid19
Cost
Out
Cost
Optimisaitoin
Value
Optimsaition
Equity + Liability
• Reactive, Quick Win
• Ex Eliminate, Renegotiate
• Modest Savings – IT Reduction
& Contract Arrangement
• Business Outcome Driven
• Stakeholder and Relationship Driven
• Ex - Value Plan, Execute &
Measure, Iterate & Innovate
• Structured Improvements, Program
Driven
• Ex - Shift Spend, Improve
productivity
• Significant Savings - Digital First,
Optimise Business with IT
15. 15
Key Levers to Repair
• Operating - overhead costs, efficient cash conversion, reduce variable cost
• Finance - deploy capital for M&A, R&D, higher ATO
• Investing
COVID 19 - Impact
CFO View - Balance Sheet
Source : Gartner, Forrester
Long Term Debt
Goodwill & Other
Intangible Assets
Shareholders
Equity
Assets Equity + Liability
Operational
Assets
Current Assets
Current Liability
Long Term Debt
Goodwill & Other
Intangible Assets
Shareholders
Equity
Assets Equity + Liability
Operational
Assets
Current Assets
Current Liability
Pandemic = $0
Pre–Covid19
Post–Covid19
CFO – View
Investor preferences
Financial market trends
Financial perspective on risk and return
Investors Customers
19. 19
End of Document
Thank you
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discussed thoughts & opinions are my own & not that of my employer or others parties.
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