An article by Adel Al-Saleh, Member of the Board of Management Deutsche Telekom AG and CEO of T-Systems.
Nothing is like it used to be: The corona virus is turning society and the economy upside down. I experience this every day, just like everyone else. For example, I was meant to be at an industry trade fair in Hanover last week, talking to colleagues, friends and customers and presenting our top exhibits and T-Systems news to journalists. Instead, I hosted a Digital Event.
Digital event is the new trade fair
This April, everything's new... The pandemic and risk of contagion forced the cancellation of the trade fair as a physical event. We have adapted the presentation intended for the trade fair on Monday (April 20) into a completely digital event. I took part from my home city of London. Several thousand spectators took part via livestream. Customers and the media are now familiar with our new offerings. Digital events are undoubtedly part of our new future. Everything is going digital. Transformation is no longer just another name for 'medium-term business plan', rather our uppermost priority in these challenging times. So it’s full steam ahead for digitization.
T-Systems began its transformation into a digital service provider over two years ago. So, can we look into the crystal ball and say what the economy looks like after Corona? Of course not – it would be foolish to think we could. But we have already gained experience over the course of our transformation and in the past few weeks of the pandemic. We believe that this experience will be invaluable as we move on from this crisis, and we want to share it. We asked ourselves before and during the pandemic: What areas do we urgently need to address? What are the next steps?
An agile and pragmatic approach – even over the weekend
The first few weeks of working from home have already been very instructive for us and other companies, too. Are we dependent on physical human contact, and does the pandemic therefore pose a risk to our economic future? Nobody is asking this question anymore. We are currently also finding that working from home is often even more efficient than we would have thought before the arrival of Covid-19. We have also experienced how capable we are of reacting to a crisis in an agile way. Processes which in the past took months, were suddenly being completed from Friday to Sunday, thanks to a more pragmatic approach. There was no alternative; Over the weekend, a DAX-listed customer needed to double their network capacity.
Society and clients needed quick help: a large logistics company quickly received 15,000 encrypted connections for employees who suddenly needed to work securely from home. Within two days, we supplied a US healthcare company with 500 laptops and 1,000 VPNs. Another client received 400 percent more power for applications from newly setup data center. We built an online tool for the Bavarian government within five days. The German state’s administration uses it to process aid applications and pay out urgently needed financial support to small companies during the crisis.
But that was only the beginning of the response to the crisis. The following three phases of digitization that every CDO or CIO has to deal with are obvious:
- Secure Current Operations
First and foremost, everything must be done for the health and safety of employees. In my company we are fortunate to have the majority of our employees equipped with laptops, smartphones or tablets. This allows them to work from home. In addition, connection and collaboration platforms are crucial. We have doubled the bandwidth and number of remote access lines for many of our customers within a few days. Such projects usually take weeks from tender to deployment. Changing to social distancing guidelines requires flexibility in many ways.
- Adjust to the New Reality
The economic impact we are seeing is unprecedented. Everyone is hoping for a rapid economic miracle after Covid-19. But I am afraid, we'll need patience for that. Companies plan to slash billions from spending in the wake of the coronavirus. Digitization has always been a catalyst for this. But you need to invest in order to tackle costs, increase efficiency, and secure financial stability through digitization. Therefore, the push towards digitization has gained a new energy. Of course, even before the Corona crisis, every company already had a digital agenda and a long-term strategy. But now everything needs to be unlocked twice as fast.
To give some concrete examples: an important step in the digitization journey to more resilience is using multi-clouds and the art of orchestrating them. Corporate networks must be state-of-the-art. Software-defined networks and next-generation mobile communications using 5G campus technology enable real-time collaboration and new solutions for the Internet of Things. These technologies lay the foundation for the new reality. And, of course, security: In times of crisis, when companies are weakened anyway, attackers smell easy prey.
- Accelerate Digital Now
The third phase focuses on the really fundamental changes in business design. No company is immune to such crises. But the speed at which large multinational companies have gotten into such serious trouble within a few weeks is hard to believe. Maybe certain processes were over-optimized, for example supply chains. If these fail in such an exceptional situation, operations grind to a halt. But also the way we travel, engage with customers, go to market or hire employees will change in the future. Until a few weeks ago, automation, big data, ultra-flexible value chains, artificial intelligence and machine learning were the shining examples of particularly innovative companies. Now they are simply necessities for every business, striving for resilience.