Save-to-thrive
Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
August 2020 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Contents
Executive summary 4
About the survey 9
Key global insights 17
Coping with COVID-19: Respond-Recover-Thrive 23
The “Next Normal”— New business conditions after COVID-19 29
Industry sector analysis 35
Save-to-Thrive 39
Conclusion 42
Appendix 47 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Foreword
The COVID-19 pandemic is reshaping the global business landscape and fundamentally changing how people around the world live and work. To better understand the short- and long-term impacts of the crisis—and what companies around the world are doing about it—we recently conducted a special mid-cycle version of our regular biennial survey of global cost management practices and transformation trends.
Actions that companies are taking right now to address COVID-19 do business). Now, in response to COVID-19, we are seeing that can have a major impact on their long-term competitiveness and transformation mindset evolve into “Save-to-Thrive,” with the performance. As such, it is crucial for decision-makers to understand crisis shining extra light on the talent lever and accelerating key how the crisis is unfolding from a business perspective, and what the transformation actions such as automation and remote work that future is likely to hold. can help companies thrive once the virus is contained and the next normal emerges. The results of this mid-cycle survey include responses from 1,089 executives with direct involvement in their companies’ cost In contrast to the downturn that began in 2008, which was structural management and enterprise transformation efforts, and represent a in nature, the current crisis was triggered by external factors and is broad range of industries and global geographies—with particularly demand-driven. As such, although two-thirds of our respondents strong representation from countries that have been highly impacted expect at least one more wave of COVID-19 relapses to occur, by COVID-19. companies around the world are generally optimistic about the future and intend to bounce back as quickly as possible, adopting In this report, we discuss the key survey findings using a three-stage a Save-to-Thrive mindset that can help them make strategic shifts framework (Respond-Recover-Thrive) to analyze companies’ actions to their operating models, products and services, and customer and expectations as they cope with the pandemic and position engagement capabilities. themselves for the post-crisis world (the “next normal”). We hope you find the insights in this special report useful, and look 1 Our 2019 global survey , which was conducted prior to COVID-19, forward to hearing your thoughts and feedback. found the prevailing mindset for strategic cost management was “Save-to-Transform” (using the strategic levers of cost, growth, talent, technology and digital enablement to transform how companies
Omar Aguilar Sam Balaji Strategic Cost Transformation Global Consulting Leader Global Market Offering Leader Deloitte Touche Tohmatsu Limited Deloitte Consulting LLP
1. “Save-to-Transform as a catalyst for embracing digital disruption: Deloitte’s second biennial global cost survey,” Deloitte, 2019
3 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic Executive summary
Expectations for COVID-19 is boosting Cost structure is COVID-19 financial The crisis is driving positive revenue the focus on cost considered the top impacts are demand- more companies to growth have declined reduction. Relative to internal challenge. driven. The top pursue aggressive significantly due to pre-COVID-19 levels, Inability to adjust cost external challenges cost reduction COVID-19. Compared the likelihood of structure to meet reported globally are: targets. Globally, to pre-COVID-19 undertaking cost demand is the top drop in consumer the percentage of expectations, the reduction initiatives internal challenge globally demand (74%); shift respondents pursuing percentage of increased globally and in all regions. Inability in consumer behavior cost reduction targets respondents globally by 74% (28 percentage to meet employee (67%); cyber security greater than 10% expecting positive points). Two of three safeguards, and inability vulnerabilities (65%), increased by 61% revenue growth is companies globally to satisfy increased and supply chain (25 percentage points) down 40 points. (66%) now expect to demand round out the challenges (65%). compared to pre- pursue cost reduction top three. COVID-19 levels. Two over the next 12 of three companies months, up from just Inability to rapidly globally (66%) now 38% reported before address cost structure have cost reduction COVID-19. to meet demand: 78% targets that exceed 10%. Regionally, the Inability to meet percentage of companies higher measures with those aggressive related to employee targets is highest in safeguards: 74% LATAM (83%) and lowest Inability to satisfy in the US (59%). increased demand or increased sales opportunities: 71%
Lack of liquidity or credit to ensure business continuity: 69%
4 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Coping with COVID-19: Respond-Recover-Thrive
Required actions to address the COVID-19 crisis can be divided into three major stages: respond, recover and thrive. These three stages are interspersed with two additional interim stages (“respond to recover” and “recover to thrive”, and culminate in a long-term operating environment we call the “next normal.”
The global focus for Revenue growth Automation is the Working through all the COVID-19 crisis is expectations are very top transformation stages is expected shifting from respond positive in the thrive action arising from the to require about a year to recover. Most stage. Expectations for COVID-19 crisis. Globally and a half. Although the companies globally have revenue growth, although and across all regions, expected durations for effectively responded down from pre-COVID-19 roughly two of three each stage vary widely to the immediate crisis levels, remain somewhat companies expect to by region, on average and are now starting to positive in the respond pursue automation respondents globally focus on recovery. The stage (55%) and recover in all three stages of expect the respond majority of companies stage (58%). In the Respond-Recover-Thrive. stage to last about surveyed (59%) now thrive stage, the vast three months, the see themselves in the majority of companies recover stage about six “respond to recover” or globally (74%) and in all months, and the thrive “recover” stages. regions have a positive stage about 10 months. revenue outlook.
5 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
The “Next Normal”— New business conditions after COVID-19
When mapping out strategies to respond, recover, and thrive, it helps to have informed insights about the future business environment. In the wake of the 2008 financial crisis, many people called the resulting business environment the “new normal.” However, every new normal eventually gets replaced by a new new normal, so in our view it makes sense to call the post-COVID business environment the next normal.
Revenue sources will IT infrastructure, Top product strategies Next normal customer Cybersecurity and be fundamentally remote work and for the next normal engagement strategies cloud will be the key different in thenext digital channels are focus on innovation, will be driven by digital technologies. normal. expected to be the health and safety channels and flexible According to the survey, Due to practices such top operating model measures, and customer experiences. the most relevant social distancing and priorities. In a post- customization. Globally, the most technologies in the shelter-in-place that crisis, increasingly digital Globally, the top product popular strategies for next normal will be restrict access to the world, IT infrastructure strategies to compete customer engagement cybersecurity solutions physical world, the and digital channels will in the next normal are: will be: shift most (80%) and cloud COVID-19 crisis has be key. Also, remote adjust, redesign transactions to digital computing (80%). greatly accelerated work will likely remain or innovate your channels (75%), and the shift from physical popular now that the product/service increase flexibility to digital channels. It COVID crisis has proven offering to expand before and after the has also revealed the its viability. Globally, the to adjacent and/or sale (73%). limitations and risks of top operating model new markets (74%); globalization and global priorities during the next leverage new health supply chains, leading normal are expected and safety measures many companies to to be: enhance IT by redesigning your re-prioritize domestic infrastructure (78%); current product/ operations over enable remote work service offering international operations. (76%); and enable pre- (73%); and customize Meanwhile, COVID- sale, sale, and post- products or services driven changes to how sale activities through to meet new customer people live and work are digital channels (72%). and/or government boosting demand for requirements (73%). new kinds of products and services. According to the survey results, the fastest growing revenue sources in the future will be: digital channels (vs. physical channels); new products and services (vs. existing pre- COVID offerings); and domestic operations (vs. international operations).
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Industry sector analysis
Expected growth Different sectors Revenue outlooks the most negative impacts over the are at different vary significantly by revenue outlooks, while next 12 months vary stages of progress. industry. Although Medical Technology and by sector. Revenue In addressing the the future revenue Pharmaceuticals have the expectations over the challenges of COVID-19, outlook remains most positive outlooks. next 12 months vary the average rate of generally positive for In the thrive stage, widely by sector, with progress in all sectors all sectors—especially Hospitality, Chemicals the COVID-19 crisis falls somewhere in the thrive stage— & Specialty Materials, impacting sectors between the respond expectations vary and Hardware & both negatively and and recover stages. significantly by sector. Semiconductors have the positively. On the The median progress In the respond stage, most negative outlooks, negative side of the in sectors such as Transportation and while Medical Technology spectrum, a relatively Hospitality, Capital Consumer Products and Telecom have the high percentage of sector Markets, and Medical have the most negative most positive outlooks. respondents expect Technology is skewed revenue outlooks, while revenue to decline in towards the respond Medical Technology Transportation (61%) and stage, while sectors and Pharmaceuticals Hospitality (60%). On the such as Insurance have the most positive positive side, revenue (both General and Life/ outlooks. In the recover growth is expected in Annuity), Consumer stage, Transportation and Medical Technology Products, and Banking Hospitality have (63%), Telecom (58%), are generally further Pharmaceuticals (58%), along, with progress and Software & IT skewed toward the Services (57%). recover stage.
Save-to-Thrive
Save-to-Transform companies bounce back Most companies Decisions that remote work that is becoming Save-to- from the COVID-19 crisis expect a second companies make align with the new Thrive. The strategic and position themselves wave of COVID-19. today to cope with realities of a post-crisis priorities associated to thrive in the next The majority of the COVID-19 crisis business environment— with the COVID-19 normal, many expect respondents (67%) can help or hinder companies can thrive stage are very to continue focusing on expect a COVID-19 their positioning leverage their cost consistent with the those same levers—but relapse, with an for the future. By savings and Save-to-Transform with an increased and estimated timeframe using cost reduction improvement efforts trend we identified accelerated emphasis on of early 2021. Those and performance to not only transform in 2019, which uses technology and digital that follow strategies improvement strategically how they operate, but the strategic levers of enablement, along with consistent with Save-to- to transform the to position themselves cost, growth, talent, a renewed emphasis on Thrive will likely be the enterprise and improve to thrive in the next technology and digital growth and talent. We ones best positioned competitiveness—which normal. enablement to transform call this evolved mindset to weather potential includes investing in how companies do “Save-to-Thrive.” challenges resulting key capabilities such business. And as from a second wave. as automation and
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About the survey
9 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic About the survey
Deloitte Consulting LLP (Deloitte or Deloitte Consulting) engaged Dynata to conduct a global survey of COVID-19’s impact on organizations—from both a transformation and performance improvement perspective—to better understand the changes taking place in current and future actions across regions and industries.
Study objectives
Conduct a mid-cycle version of Understand the impact of Compare business our biennial global cost survey, COVID-19 on different industry expectations before the focusing on the impact of COVID-19 sectors and regions COVID-19 pandemic and now
Characterize organizations Identify trends on future based on three stages of activity: operating models, product/ Respond, Recover and Thrive service offerings and consumer engagement in a post-COVID-19 world that we call the “next normal.
Methodology Data was collected through detailed online surveys conducted between late June and mid-July 2020. Analyses were conducted by Deloitte.
January February March April May June July August September October November December
10 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Firmographics
The survey included responses from 1,089 executives directly involved in transformation efforts in their organizations. Respondents were from four major regions.
Figure 1. Geographic distribution of survey respondents
ro e re o e re o e 1 China ain and S erman 9 China ong ong re o e pain apan Ita ustra ia rance 1 India e ea and 1
T re o e ra i e ico
11 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Surveyed countries are highly representative of their regions and the overall global economy, in addition to representing geographies highly impacted by COVID-19
The countries included in the survey represent 70% of the world’s economy as measured by Gross Domestic Product (GDP)*. Outside of the United States, respondents represent 54% to 88% of their regional economies as measured by GDP (see Figure 2).
Figure 2. Representation of the regional and global economy
S rve a e overa e S rve a e overa e (% of respondents’ economic distribution (% of respondents’ economic distribution according to 2019 regional GDP) according to 2019 global GDP)
1
urve respondents represent of the or d s econom
1
Europe C
ro e erman pain Ita rance T ra i e ico China ain and apan ustra ia India China ong ong e ea and
D of countries surve ed D of countries not surve ed
Source: The World Bank – GDP 2019
*Source: The World Bank – GDP 2019
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The vast majority of respondents are senior executives, most with direct involvement in COVID-19 activities
Only relevant executive positions with responsibility for transformation decisions were surveyed: 25% of responses were from presidents or CEOs; almost 60% were from C-Suite executives; 65% of respondents are directly involved in a COVID-19 response committee (see Figure 3).
Figure 3. Management level breakdown and COVID-19 Committee involvement
a a e e t- eve rea o a a e e t- eve rea o - re o e (% of respondents by level) (% of respondents by level and region) o ittee i vo ve e t (% of respondents by region)
In genera C-suite and e ecutive of respondents on average management- eve response profiles reported to e invo ved in a COVID-19 ere ai tai e i a re io response committee
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1 1 most of responses ere from re i e t or ro e a most from C- eve e ecutives and the rest from other e ecutive management 1 positions 9
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Europe LATAM C o a Europe LATAM C
- eve e tive CIO (Chief Information Officer), CFO (Chief Financial Officer), COO (Chief Operating Officer), CHRO (Chief Human Resources Officer), CMO (Chief Marketing Officer), CPO (Chief Procurement Officer)
CEO resident C- eve e ecutives Other Division op management e ecutives
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Data was collected to support industry-specific analyses
Industry-specific information was collected to provide meaningful insights across six major industry groups (see Figure 4).
Figure 4. Industry Breakdown
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echno og edia 11 11 11 e ecommunications
Consumer roducts etai ospita it ransportation
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harmaceutica s edica Devices ea thcare
overnment and u ic ervices
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Major companies in each region were the primary respondent targets
Among all participating companies, 75% reported revenues greater than $1 billion. Among the participating US companies, 66% reported revenues greater than $5 billion (see Figure 5). Distribution of companies is representative of their specific geography or region.
Figure 5. Organization’s Annual Revenue
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of the respondents have reported an annua revenue of the respondents have reported an annua of more than 1 i ion o S re o e t have revenue of more than 1 i ion re orte a a a reve e o ore tha
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Note: Europe, LATAM, and APAC Surveys were conducted in local currency. For analysis purposes they have been converted to US dollars.
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Key global insights
17 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Expectations for positive revenue growth have declined significantly due to COVID-19 Globally, the percentage of respondents expecting positive revenue growth is down 40 points compared to pre-COVID-19 expectations. The decline is somewhat larger in the US (-46 percentage points), and somewhat smaller in LATAM (-37 percentage points) and APAC (-34 percentage points) (see Figure 6).
Figure 6. Revenue growth outlook over the next 12 months
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re-COVID re-COVID re-COVID 9 re-COVID 9 91 9 re-COVID
- - - - - 9 o o o o 1 1 o 1 1 1
1 o tota re o e t S S Ita India pain ra i apan rance o a e ico T T ro e ro e ustra ia erman China ain and China ong ong
ositive gro th out oo respondents reporting gro th greater than
Survey findings 1 50% of respondents globally have a positive outlook on revenue growth right now, higher than the US (46%), but lower than Europe (51%), APAC (52%) and LATAM (56%).
2 Respondent expectations for positive revenue growth have dropped 40 percentage points globally due to COVID-19, with the largest decline in the US (46 percentage points) and smallest decline in APAC (34 percentage points).
3 Among individual countries, Japan respondents reported the lowest percentage of respondents with positive revenue growth expectations (31%), 13 percentage points lower than the second lowest country (UK, 44%).
*p.p. stands for percentage point
18 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
COVID-19 is boosting the focus on cost reduction Globally, the likelihood of undertaking cost reduction initiatives increased by 74% (28 percentage points) relative to pre-COVID-19 levels. Two of three companies globally (66%) now expect to pursue cost reduction over the next 12 months, up from just 38% before COVID-19 (see Figure 7).
Figure 7. Likelihood of undertaking cost reduction over the next 12 months
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o 1 o o 1 o o 9 9 re-COVID re-COVID re-COVID re-COVID 1 re-COVID o tota re o e t S S Ita India pain ra i apan rance o a e ico T T ro e ro e ustra ia erman China ain and China ong ong
Survey findings 1 Globally, 66% of respondents expect to undertake cost reduction initiatives over the next 12 months. The likelihood is lower in the US (62%) and Europe (63%), and higher in LATAM (77%) and APAC (70%).
2 Compared to pre-COVID-19 levels, the likelihood of cost reduction increased by 74% globally (28 percentage points); the largest increase is in LATAM (35 percentage points) and the lowest is in the US (21 percentage points).
3 Respondents in Italy are the least likely to pursue cost reduction (53%); respondents in Mexico are the most likely (81%).
*p.p. stands for percentage point
19 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
The crisis is prompting many more companies to pursue aggressive cost reduction targets Globally, the percentage of respondents pursuing cost reduction (66%) now have cost reduction targets that exceed 10%. Regionally, the targets greater than 10% increased by 61% (25 percentage points) percentage of companies with those aggressive targets is highest in compared to pre-COVID-19 levels. Two of three companies globally LATAM (83%) and lowest in the US (59%) (see Figure 8).
Figure 8. Respondents reporting annual cost reduction targets greater than 10%
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o o 9 o o 9 9 9 9 re-COVID re-COVID re-COVID re-COVID 1 re-COVID
o tota re o e t S S Ita India pain ra i apan rance o a e ico T T ro e ro e ustra ia erman China ain and China ong ong
Survey findings 1 Globally, 66% of respondents have cost reduction target above 10%, with the US (59%) and Europe (63%) below the global average, and LATAM (83%) and APAC (70%) above it.
2 Compared to pre-COVID-19 levels, the percentage of companies globally with cost reduction targets above 10% increased by 61% (25 percentage points), with a largest increase in LATAM (36 percentage points) and the smallest in APAC and the US (23 percentage points)
3 Japan (56%) has the smallest percentage of respondents pursuing cost reduction targets greater than 10%; Mexico (85%) has the largest.
*p.p. stands for percentage point
20 Figure 9. External challenges currently faced by organizations due to COVID-19 impacts COVID-19 to due organizations by faced currently challenges External 9. Figure (65%) and vulnerabilities security Cyber (67%). behavior consumer in shift arelated by followed (74%), demand consumer in adrop is globally reported challenge external top The demand-driven are impacts financial COVID-19 Survey findings Survey 3 2 1 o tota re o e t
(84%) and APAC (70%). and (84%) LATAM was the only region to cite lack of liquidity and/or credit availability as a top three external challenge. external three atop as availability credit and/or liquidity of lack cite to region only the was LATAM challenges. external three top their among challenges distribution and chain supply reported APAC respondents and US LATAM (72%), Europe (75%), US regions: all (74%) in and globally reported challenge external top the is demand consumer in Drop Drop inconsumerdemand C er securit vu nera i ities hift inconsumer ehavior o a vie avai a i it ac of i uidit and orcredit upp Chainanddistri utioncha enges Save-to-Thrive | S challenges rank among the top three (see Figure 9). Figure (see three top the among rank challenges distribution and chain supply APAC, and US the In challenges. external four top the out (65%) round challenges chain supply Enterprise transformationandperformanceimprovementstrategiesduringtheCOVID-19pandemic ro e e io a vie peed ofDigita ransformation to reopen usinessactivit Increased regu ator re uirements T 1 9 21 Survey findings Survey Save-to-Thrive | 22 Figure 10. Internal challenges currently faced by organizations due to COVID-19 impacts COVID-19 to due organizations by faced currently challenges Internal 10. Figure 10). Figure (see globally challenges internal three top the out round demand increased satisfy to inability and safeguards, employee meet to Inability regions. all in and globally challenge internal top the is demand meet to structure cost adjust to Inability the top challenge internal is considered structure Cost 3 2 1 o tota re o e t
challenges reported in all regions except Europe. except regions all in reported challenges Lack of liquidity or credit (73%) is a top three concern reported only in Europe. in only reported concern three atop is (73%) credit or liquidity of Lack internal three top the are demand increased satisfying and safeguards, employee meeting structure, cost Adjusting regions. all in and (78%) globally challenge internal top the as reported was demand meet to structure cost Adjusting to meetdemand Ina i it torapid ad ustcoststructure re ated toemp o eesafeguards Ina i it tomeethighermeasures Enterprise transformationandperformanceimprovementstrategiesduringtheCOVID-19pandemic o a vie 1 9 S usiness continuit ac of i uidit orcredittoensure increased sa esopportunities Ina i it tosatisf increaseddemandor ro e 1 e io a vie 9 conditions andsca e to meetne e terna usiness Ina i it toena edigita infrastructure to meetne interna usinessconditions Cha enges ithtechno og infrastructure T Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Coping with COVID-19: Respond, Recover and Thrive
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Respond-Recover-Thrive Required actions to address the COVID-19 crisis can be divided into three major stages: Respond, Recover and Thrive. These three stages are interspersed with two additional interim stages, and culminate in a long-term operating environment we call the “next normal” (see Figure 11).
Figure 11. The Respond-Recover-Thrive framework
e o Currently taking actions to immediately respond to the COVID-19 crisis and ensure 1 business continuity
et ee re o a re over Near completion of immediate response actions and starting to take actions towards stabilizing operations under COVID-19 conditions
e over Currently taking actions to stabilize operations 2 under COVID-19 conditions
et ee re over a thrive Near completion of Stabilization actions and starting to take structural actions to operate in the “Next Normal“
Thrive Currently taking structural actions as result of a defined strategy to operate and 3 compete in the “Next Normal”
e t or a The new business conditions established, after the Thrive stage, as a result of the societal, commercial and technological changes caused by public and private reactions to COVID-19
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The global focus for the COVID-19 crisis is shifting from respond to recover Most companies globally have effectively responded to the Respondents in the US and Europe are somewhat ahead of the immediate crisis and are now starting to focus on recovery, with global average, while respondents in APAC and especially LATAM the majority (59%) now seeing themselves in the “respond to are lagging behind. recover” or “recover” stages (see Figure 12). The orange triangles, which represent the 50th percentile, show that on average the The red triangles, which represent the 75th percentile, show that companies surveyed are still in the “respond to recover” stage, even leading companies are often still in the recover phase, with where they have nearly completed their immediate response fewer than 25% in the “recover to thrive” or “thrive” stages. actions and are starting to focus on recovery (i.e., stabilization).
Figure 12. Organization’s current positioning on the Respond-Recover-Thrive framework
e o e o to re over e over e over to thrive Thrive
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Survey findings 1 78% of respondents globally still see themselves no further along than the “recover” stage (and some are still in the “respond” stage).
2 The majority of respondents globally (59%) and across regions are in the “respond to recover” or “recover” stages, except in LATAM where the majority (61%) are still in the “respond” or “respond to recover” stages.
3 APAC has the highest number of respondents in the “respond to recover” stage (38%).
(See the appendix for a more detailed country-by-country analysis)
25 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Revenue growth expectations are very positive in the thrive stage Expectations for revenue growth, although down from pre- majority of companies globally (74%) and in all regions have COVID-19 levels, remain somewhat positive in the respond a positive outlook for revenue growth, with only 24% globally stage (55%) and recover stage (58%). In the thrive stage, the vast expecting flat or declining revenue (see Figure 13).
Figure 13. Revenue growth outlook reported at each stage
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Survey findings 1 Globally, expectations for positive revenue growth improve significantly in each subsequent stage:respond (55%); recover (58%); and thrive (74%).
2 Conversely, the percentage of companies that expect their revenues to decline or remain flat decreases for each subsequent stage: respond (44%); recover (41%); and thrive (24%).
3 Regionally, expectations for positive revenue growth increase in subsequent stages for all regions except the US, where the revenue outlook remains same in the respond and recover stages.
4 US respondents generally have the least positive revenue outlook, while LATAM respondents generally have the most positive outlook.
(See the appendix for a more detailed country-by-country analysis)
26 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Automation is the top transformation action arising from the COVID-19 crisis Globally and across all regions, roughly two out of three companies expect to pursue automation in all three stages of respond, recover and thrive, making it the clear leader in transformation actions arising from the COVID-19 crisis (see Figure 14).
Figure 14. Likelihood of transformation actions at each stage
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9 9 o tota re o e t
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utomation a or and non- a or cost reduction ransform usiness process ransform supp chain usiness rationa i ation through Dec are an ruptc or inso venc or divestments
Survey findings 1 Globally, automation is the transformation action most likely to be implemented across all stages according to respondents for addressing the COVID-19 crisis (65% or more)
2 Automation is also expected to be the top transformation action by respondents in all regions.
3 For each subsequent stage, there is a reported decline in the likelihood of implementing labor and non-labor cost reduction initiatives in the US, Europe and APAC. This is consistent with a generally positive revenue growth outlook.
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Working through all three stages is expected to require about a year and a half On average, respondents globally expect the “respond” stage to last about 3 months, the “recover” stage about 6 months, and the “thrive” stage about 10 months. However, the expected durations for each stage vary widely by respondent and region (see Figure 15).
Figure 15. Expected duration reported of each stage
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Survey findings 1 US respondents generally expect each of the three stages to take longer than the global averages: respond (3.4 months vs. the global average of 3.2 months), recover (6.6 months vs. the global average of 6.0 months), and thrive (10.5 months vs. the global average of 10.1 months)
2 APAC respondents expect the shortest durations for respond (2.9 months) and recover (5.4 months)
3 European respondents generally expect each of the three stages to take less time than the global averages
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The “Next Normal”— New business conditions after COVID-19
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When mapping out strategies to respond, recover and thrive, it helps to have informed insights about the future business environment. In the wake of the 2008 financial crisis, many people called the resulting business environment the “new normal.” However, every new normal eventually gets replaced by a new new normal, so in our view it makes sense to call the post-COVID business environment the next normal. o a vie e io a vie Revenue sources will be fundamentally different in the next normal According to the survey results, the fastest growing revenue digital channels. It has also revealed the limitations and risks of sources in the future will be: digital channels (vs. physical globalization and global supply chains, leading many companies 9 9 channels); new products and services (vs. existing pre- to re-prioritize domestic operations over international COVID offerings); and domestic operations (vs. international operations. Meanwhile, COVID-driven changes to how people operations). Thanks to practices such social distancing and live and work are boosting demand for new kinds of products 1 shelter-in-place that restrict access to the physical world, the and services (see Figure 16). COVID-19 crisis has greatly accelerated the shift from physical to
Figure 16. Growth expected by revenue source in the next normal
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an Europe C
Digita channe s
ost-COVID-19 ne products and services S ro e T
more hen Domestic operations compared to Enhance I infrastructure to support edesign the supp chain Insource usiness processes or functions more hen pre-COVID-19 management and operations imp if the organi ationa structure Outsource non-core processes compared to ph sica channe s Ena e e tensive remote or d ust rea estate infrastructure re-COVID-19 core portfo io Ena e pre-sa e sa e and post-sa e of products and services more hen activities through digita channe s compared to Internationa internationa operations
h sica channe s
Survey findings 1 During the next normal, respondents expect digital channels to have 63% higher revenue growth than physical channels. New post-COVID-19 products are expected to grow 14% more than pre-COVID-19 products. And domestic operations are expected to grow 24% more than international operations.
2 In all regions, respondents expect digital channels to have the highest revenue growth of any revenue sources.
3 Post-COVID-19, respondents expect new products and domestic operations to see high revenue growth in all regions expect LATAM, where pre-COVID-19 products are ranked higher than domestic operations.
30 Figure 17. Expected priorities for operating models in the next normal next the in models operating for priorities 17.Figure Expected digital increasingly an In (72%). channels digital through activities post-sale and sale, pre-sale, enable and (76%); work remote enable (78%); infrastructure IT enhance be: to expected are normal next the during priorities model operating top the Globally, world a post-crisis in priorities model operating top the be will channels digital and work remote infrastructure, IT Survey findings Survey 3 2 1 o tota re o e t
digital channels. digital models. operating (77%). work remote In LATAM, the top operating priority expected by respondents is enabling pre-sale, sale and post-sale activities through through activities post-sale and sale pre-sale, enabling is respondents by expected priority operating top the LATAM, In future in priorities three top reported the also are channels digital and work remote infrastructure, IT regions, all In enabling and (78%) infrastructure IT enhancing on rely to models operating future their expect respondents Globally, activities throughdigita channe s Ena e pre-sa e sa eandpost-sa e management andoperations Enhance I infrastructuretosupport Ena e e tensiveremote or o a vie 1 imp if theorgani ationa structure d ust rea estateinfrastructure edesign thesupp chain Save-to-Thrive | S Enterprise transformationandperformanceimprovementstrategiesduringtheCOVID-19pandemic proven its viability (see Figure 17). Figure (see viability its proven has crisis COVID the that now popular remain likely will work remote Also, key. are channels digital and infrastructure IT world, ro e e io a vie Outsource non-coreprocesses Insource usinessprocessesorfunctions T 9 9 31 Figure 18. Product strategies to differentiate and compete in the next normal next the in compete and differentiate to strategies Product 18. Figure redesigning by measures safety and health new leverage (74%); markets new and/or adjacent to expand to offering product/service your innovate or redesign adjust, are: normal next the in compete to strategies product top the Globally, customization and measures, safety and health innovation, on focus normal next the for strategies Top product Save-to-Thrive | Survey findings Survey 32 3 2 1 o tota re o e t
ranks third. ranks product (73%). and customization (73%), design product/service into measures safety and health (74%),leveraging offerings product/service their LATAM respondents reported significantly higher ratings across all strategies. all across ratings higher significantly reported respondents LATAM products core on focusing where US, the for except strategies, product three top same the have regions all across Respondents innovating or redesigning adjusting, by: effectively more compete and products their differentiate to plan respondents Global ad acent and orne mar ets product/service offeringtoexpand d ust redesignorinnovate our product/service offering measures byredesigningyourcurrent Leverage newhealthandsafety o a vie Enterprise transformationandperformanceimprovementstrategiesduringtheCOVID-19pandemic 1 S 9 9 re uirements ne customerand orgovernment Customize productsorservicestomeet your currentproduct/serviceoffering Maximize localsupplychainbyredesigning requirements (73%) (see Figure 18). Figure (see (73%) requirements government and/or customer new meet to services or products customize and (73%); offering product/service current your ro e e io a vie competitive advantages your portfolioandmaximizingcore Focus onlyoncoreproducts,byrationalizing T Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Next normal customer engagement strategies will be driven by digital channels and flexible customer experiences Globally, the most popular strategy for customer engagement will be to shift most transactions to digital channels (75%). The second most popular strategy will be to increase flexibility before and after the sale (73%) (see Figure 19).
Figure 19. Customer engagement strategies to differentiate and compete in the next normal
o a vie e io a vie
9 1 1 1 1 9 9 9 9 o tota re o e t
S ro e T
hift most transactions to digita channe s Cross-se product service to increase Redefine brand to become more impactful Increase flexibility before and after sales va ue de ivered to customer Differentiate service level by customer Increase of se f-service options Redesign loyalty programs based on new segment va ue health, safety, mobility conditions
Survey findings 1 Globally, the reported top strategies for creating a compelling customer experience in the next normal are: shift to digital channels (75%), increase flexibility pre- and post-sale (73%); increase self-service options (71%); and cross-sell products and services (71%).
2 In the US, the top customer engagement strategy reported is to increase flexibility before and after the sale (73%).
3 In LATAM, the top strategies reported are cross-selling products/services (84%) and redesigning loyalty programs (83%).
33 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Cybersecurity and cloud will be the key technologies According to the survey, the most relevant technologies in the next normal will be cybersecurity solutions (80%) and cloud computing (80%) (see Figure 20).
Figure 20. Relevance of technologies to operate in the next normal
o a vie e io a vie
1 9 9
o tota re o e t
S ro e T
C ersecurit so utions Internet of things Io Virtua rea it or remote ena ement techno og C oud computing o otic rocess utomation oc chain Cognitive and artificial intelligence tools usiness Inte igence and advanced ana tics
Survey findings 1 Globally, cybersecurity solutions (80%) and cloud computing (80%) are expected by respondents to be the most relevant technologies in the next normal.
2 Cybersecurity solutions and cloud computing top the list of respondents in all regions except LATAM, where cognitive and artificial intelligence tools are considered more relevant in a post-crisis world.
3 Internet of things (IOT) makes the top three in APAC (73%), but not for respondents in the US and Europe.
34 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Industry sector analysis
35 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Expected growth impacts over the next 12 months vary by sector Revenue expectations over the next 12 months vary widely by sector, sector respondents. On the positive side, revenue growth is expected with the COVID-19 crisis creating both winners and losers. On the by 63% of Medical Technology sector respondents, followed closely negative side of the spectrum, a decline in revenue is expected by by Telecom (58%), Pharmaceuticals (58%), and Software & IT Services 61% of Transportation sector respondents and 60% of Hospitality (57%) (see Figure 21).
Figure 21. Sector 12-month revenue growth outlook
e ative ro th o t oo e i e o itive ro th o t oo ro th edica techno og harmaceutica s e ecom oft are and I services Chemica s and specia t materia s ard are and semiconductors Capita mar ets an ing
1 1 9 9
9 9 9 1 1 1 1 1 1 1 1 1
1 1 Oi as roducts etai Consumer roviders enera ea th Care roducts Insurance Industria Insurance ospita it ife and nnuit
ransportation Se tor arra e i or er o e ative ro th o t oo e i e Se tor arra e i or er o o itive ro th o t oo ro th
Dec ine o gro th ro th
36 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Different sectors are at different stages of progress In addressing the challenges of COVID-19, the average rate of Capital Markets, and Medical Technology is skewed towards the progress in all sectors falls somewhere between the “respond” “respond” stage, while sectors such as Insurance (both General and “recover” stages. As depicted by the orange triangles in and Life/Annuity), Consumer Products, and Banking are generally Figure 22, the median progress in sectors such as Hospitality, further along, with progress skewed toward the “recover” stage.
Figure 22. Current sector positioning on the Respond-Recover-Thrive framework
e o e o to re over e over e over to thrive Thrive
ospita it
Capita ar ets 1 1
etai 1 1 9
edica echno og 9 1
Oi as 1 11
oft are and I ervices 1
harmaceutica s 1
Industria roducts 1 1
ransportation 1
an ing 1 1 1
ard are and 1 1 1 emiconductors
Consumer roducts 1 1 1
e ecom 1 9 9 1 1
ea thcare ervices 1
Chemica and 1 1 pecia t ateria s
Insurance ife and nnuit 1 19
Insurance enera 1 1
th percenti e th percenti e
Looking at the red triangles (which depict the 75th percentile), the Overall, there is much more variation between sectors at the 75th relative results directionally align with the median (i.e., the 50th percentile. However, in most cases the 75th percentile falls within the percentile), but with a few noteworthy exceptions such as Hospitality “recover” stage, except for the Hospitality sector, which has been hit (where 75th percentile companies are closer to the median than in particularly hard by the COVID-19 crisis. other sectors) and Banking (where 75th percentile companies are far ahead of the median and actually lead all other sectors).
37 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Revenue outlooks vary significantly by industry Although the future revenue outlook remains generally positive for all sectors—especially in the thrive stage—expectations vary significantly by sector (see Figure 23).
• In the respond stage, Transportation and Consumer • In the thrive stage, Hospitality, Chemicals & Specialty Materials, Products have the most negative revenue outlooks, while and Hardware & Semiconductors have the most negative Medical Technology and Pharmaceuticals have the most outlooks, while Medical Technology and Telecom have the positive outlooks. most positive outlooks.
• In the recover stage, Transportation and Hospitality have the • The Medical Technology sector stands out for having the most most negative revenue outlooks, while Medical Technology positive revenue growth outlook in all three stages. and Pharmaceuticals have the most positive outlooks.
Figure 23. Sector revenue growth outlook by stage
e o e over Thrive
ransportation 1 1 1 1
Consumer roducts 9 1 1 1
Industria roducts 1 1 1 9 1
Insurance enera 9 1 1 1 1
etai 1 19 9 1 1
e ecom 9
Capita ar ets 1 1
ospita it 1
Chemica and pecia t ateria s 1 1 1
oft are and I ervices 9 1 19 1 1 1
an ing 1 1 1 1 9
ea th Care roviders 1 1
oft are and emiconductors 11 1 9
harmaceutica s 11 19 9 1
Oi as 1 1 1 11
Insurance ife and nnuit 1 1 1
edica echno og 1 1 11 1 1 1
Dec ine o gro th ro th ost positive gro th out oo ost negative gro th out oo
38 Save-to-Thrive | Enterprise transformation and performance improvementSave-to-Thrive strategies during | Enterprise the COVID-19 transformation pandemic and performance improvement strategies during the COVID-19 pandemic
Save-to-Thrive
39 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Save-to-Transform is becoming Save-to-Thrive The strategic priorities associated with the COVID-19 thrive to thrive in the next normal, many expect to continue focusing stage are very consistent with the Save-to-Transform trend we on those same levers—but with an increased and accelerated identified in Deloitte’s 2019 Cost Survey, which uses the strategic emphasis on technology and digital enablement, along with a levers of cost, growth, talent, technology and digital enablement renewed emphasis on growth and talent. We call this evolved to transform how companies do business.2 And as companies mindset “Save-to-Thrive.” (see Figure 24). bounce back from the COVID-19 crisis and position themselves
Figure 24. Organization’s strategic priorities reported at each stage
Strate i rioritie Strate i rioritie n he 2019 o Sur e D 19 reco er a e 2020
ave-to-transform e o e over Thrive
9 1 1 9 9 9 1 o tota re o e t
a es gro th echno og imp ementation Cost reduction Digita ena ement a ent management i uidit management for emp o ee safet for emp o ees safet
Survey findings 1 IT-related strategic priorities (i.e. digital enablement and technology Save-to-transform implementation) top the list of global respondents in all three stages of Deloitte’s 2019 Biannual Cost Survey Respond-Recover-Thrive. saw a shift in the key focus areas of companies from save-to-grow to save- 2 Respondents expect sales growth to rise as a strategic priority in each to-transform. subsequent stage, bringing the priorities into alignment with Save-to- thrive Transform at the stage. This means that, in addition to cost, 3 In all stages, respondents continue to rank “talent to manage new ways of growth, and talent, technology working” among the top priorities (along with technology and growth). became a key priority area for most companies.
In the current survey, we can clearly observe that IT levers (technology implementation and digital capabilities) continue to be among the top priorities.
2. “Save-to-Transform as a catalyst for embracing digital disruption: Deloitte’s second biennial global cost survey,” Deloitte, 2019
40 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Most companies expect a second wave of COVID-19 The majority of respondents (65%) expect a COVID-19 relapse, with an estimated timeframe of early 2021. Those that follow strategies consistent with Save-to-Thrive will likely be the ones best positioned to weather potential challenges resulting from a second wave (see Figure 25).
Figure 25. Expectation of COVID-19 relapse and expected time of relapse
Sentiment on relapse of COVID-19 Expected time before relapse
Global
1 1
months
3
2 3 2
US Europe LATAM APAC
9 es re apse is e pected o re apse e pected Months
Survey findings 1 Globally, 65% of respondents expect a relapse of COVID-19, with an expected timeframe of 7.3 months from the date of the survey (early July 2020).
2 In the US, 67% of respondents expect a relapse to happen; however, the expected timeframe is 8 months—the longest among all regions.
3 In LATAM, 55% of respondents expect a relapse, and the expected time timeframe is 6.7 months; both numbers are the lowest among all regions.
41 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Conclusion
The COVID-19 pandemic is having a massive impact on the global business environment. Yet many companies continue to expect positive revenue growth—particularly in the thrive stage when they have successfully responded to and recovered from the early challenges of the crisis.
Decisions that companies make today to cope with COVID-19 By using cost reduction and performance improvement can help or hinder their positioning for the future. Before strategically to transform the enterprise and improve the pandemic, the prevailing mindset for strategic cost competitiveness—which includes investing in key capabilities management and transformations in general was “Save- such as automation and remote work that align with the to-Transform”—using the strategic levers of cost, growth, new realities of a post-crisis business environment— talent, technology and digital enablement to transform how companies can leverage their cost savings and performance companies do business. Now, we are seeing that Save-to- improvement efforts to not only transform how they operate, Transform mindset evolve into “Save-to-Thrive,” with the crisis but to position themselves to thrive in the next normal. highlighting and accelerating changes in key transformation areas such as technology and talent.
42 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Author As the global leader of the Strategic Cost Transformation Market Offering for Deloitte Consulting LLP, Omar focuses on broad business transformation efforts, and on providing innovative and lasting solutions to local and multinational clients’ complex problems at the CEO and CXO levels in the US and globally. Omar’s areas of expertise include strategic cost transformation, margin improvement, restructuring, turnarounds, disruptive cost strategies and business model transformations enabled by “save-to-turnaround”, “save-to-fund”, “save-to-grow” and “save-to-transform” strategies to achieve sustainable results.
Omar has published widely on the topic of sustainable and scalable cost management, and has been Omar Aguilar quoted by or has written for Business Finance, The Journal of Cost Management, Strategic Finance, Principal Chief Executive, and The Wall Street Journal, among others. He is a frequent speaker and has been a Strategic Cost Transformation guest lecturer at the University of Pennsylvania’s Wharton School of Business, Stanford University’s Global Market Offering Leader Graduate School of Business, and Carnegie Mellon’s Tepper School of Business. Deloitte Consulting LLP USA: +1 215 870 0464 Prior to his current role, he served as the Americas Regional Strategy & Operations Consulting Leader, International: +1 267 226 8956 and prior to that he was the US Consulting Leader for Enterprise Cost Management. [email protected] He holds Bachelor and Master of Science degrees in Nuclear Engineering from the University of Missouri-Rolla, and a Master of Business Administration (MBA) from the University of Notre Dame.
Contributors
Fernando Jimenez Barría David Izquierdo Sánchez Paulina Fainberg Ríos Manager Manager Consultant Monitor Deloitte Monitor Deloitte Operations Transformation Deloitte Consulting SLU Deloitte Consulting SLU Deloitte Advisory Spa Madrid, Spain Madrid, Spain Santiago, Chile [email protected] [email protected] [email protected]
Satya Gupta Divya Bhalla Consultant Analyst Strategy & Analytics Strategy & Analytics Deloitte Consulting India Private Limited Deloitte Consulting India Private Limited Mumbai, India New Delhi, India [email protected] [email protected]
43 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
US Contacts Global Contacts
Global Strategic Cost Transformation AMERICAS ASIA PACIFIC
Omar Aguilar Brazil Australia Principal Heloisa Montes Tony O’Donnell Strategic Cost Transformation | Global Partner Partner Market Offering Leader Strategy, Analytics and M&A Leader Deloitte Strategic Cost Transformation Leader Deloitte Consulting LLP Consultores Deloitte ToucheTohmatsu [email protected] +55 11 5186 6910 +613 9671 8166 [email protected] [email protected] US Strategic Cost Transformation (MarginPLUS™) Leaders Caroline Yokomizo China Partner David Wai Kit Wu Caleb Longenberger Strategic Cost Transformation Partner Principal Brazil Leader Core Business Operations Leader Deloitte MarginPLUS Co-Lead | Strategy Deloitte Consultores Advisory (Hong Kong) & Analytics +55 11 99258 4030 +86 21 6141 2208 Deloitte Consulting LLP [email protected] [email protected] [email protected] Canada Phillip Savio Faisal Shaikh Simon King Director Principal Senior Manager Core Business Operations MarginPLUS Col-Lead | Mergers Strategic Cost Transformation Deloitte Advisory (Hong Kong) & Acquisitions Deloitte Canada +85 22 852 6741 Deloitte Consulting LLP +1 437 993 4087 [email protected] [email protected] [email protected] India US Market Offering Leaders Chile Gaurav Gupta Pablo Tipic Partner Anne Kwan Partner Business Model Transformation Managing Director Operations Transformation Leader Deloitte Touche Tohmatsu India LLP Transformation Strategy & Design Leader Deloitte Advisory SPA +91 12 4679 2328 Strategy & Analytics +569 6844 4636 [email protected] Deloitte Consulting LLP [email protected] +1 415 307 2454 Japan [email protected] Daniel Ortega Tetsuo Takasago Director Partner Kuttayan Annamalai Strategic Cost Transformation Offering Operations Transformation Leader Principal Leader Deloitte Advisory SPA Deloitte Tohmatsu Consulting LLC Value Creation Services Leader +569 9649 6205 +81 7 04506 2932 Mergers & Acquisitions [email protected] [email protected] Deloitte Consulting LLP +1 214 597 5083 Mexico Arata Takahashi [email protected] Francisco Silva Associate Director Partner Operations Transformation Finance & Performance Leader Deloitte Tohmatsu Consulting LLC Deloitte Consulting Mexico +81 8 0436 08038 +52 1 55 1295 6587 [email protected] [email protected] New Zealand Horacio Pena Paul Shallard Managing Director Partner Performance Management Core Business Operations Leader Deloitte Consulting Mexico Deloitte New Zealand +52 1 55 4441 5996 +64 21 645 203 [email protected] [email protected]
Chris Rodgers Partner Strategy and Business Design Deloitte New Zealand +64 21 220 3000 [email protected]
44 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Global Contacts
EUROPE
Belgium Netherlands Switzerland Catherine Hannosset Willem Christiaan van Manen Patrik Spiller Partner Partner Partner Strategy, Business Design and M&A Leader Business Model Transformation Leader Strategy, Analytics and M&A Leader D Consulting & Advisory Deloitte Consulting B.V. Deloitte Consulting Switzerland +32 494 56 68 55 +31 6 1004 2582 +41 78 649 5605 [email protected] [email protected] [email protected]
Ben Desmet Laurens Petten Dieter Klein Director Partner Director Strategic Cost Transformation Leader Monitor Deloitte Strategy and Business Design D Consulting & Advisory Deloitte Consulting B.V. Deloitte Consulting Switzerland +32 496 72 77 42 +31 6 4049 4536 +41 79 575 6953 [email protected] [email protected] [email protected]
France Nordics United Kingdom Olivier Perrin Anders Harritz Lund (Denmark) Lorraine Barnes Partner Partner Partner Monitor Deloitte Strategic Cost Transformation Leader Core Business Operations Leader Deloitte France Deloitte Denmark Deloitte MCS Limited +33 6 87 14 17 38 +45 30 93 69 45 +44 77 6589 7434 [email protected] [email protected] [email protected]
Alexandre Kuzmanovic Tuomo Saari (Finland) Gillian Molyneux Director Partner Director Business Transformation Strategy, Analytics, M&A Leader Strategic Cost Transformation Leader Deloitte France Deloitte Finland Deloitte MCS Limited [email protected] +35 84 0505 9159 +44 78 0278 6903 [email protected] [email protected] Jean-Michel Pinto Director Bjorn Grenman (Norway) Tony Schofield Strategy and Business Design Partner Partner Deloitte France Strategic Cost Transformation Leader Global Operations Transformation Leader [email protected] Deloitte AS Deloitte MCS Limited +47 911 61 726 +07 711 334 252 Germany [email protected] [email protected] Uemit Aydin Partner Jonas Malmlund (Sweden) Strategy & Operations | Operations Strategy, Analytics and M&A Leader Transformation Deloitte Sweden Deloitte Consulting GmbH +46 75 246 33 03 +49 151 5807 7317 [email protected] [email protected] Portugal Ireland Nelson Fontainhas David Reynolds Partner Partner CFO Program Leader Financial Services Deloitte Portugal Deloitte Ireland +35 1 210 422 500 +35 3 1417 5729 [email protected] [email protected] Spain Italy Gorka Briones Umberto Mazzucco Partner Equity Partner Strategy and Business Design Supply Chain & Network Operations Leader Deloitte Consulting, S.L. Deloitte Consulting SRL +34 914 432 5206 +39 02 8332 3053 [email protected] [email protected]
45 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
46 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Appendix
47 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Appendix
Progress by region and country Progress on the Respond-Recover-Thrive journey varies significantly by region and country (see Figures A1–A3).
Figure A1. Progress in Europe In Europe, the largest percentage of companies (31%) are in the “respond to recover” phase, followed closely by those in the “recover” phase (30%). Germany leads the region with 32% of companies in either the “recover to thrive” or “thrive” phase.
e o e o to re over e over e over to thrive Thrive
o a 19 1
ro e 1 1 1
pain 1 1
Ita 1 1 9 1
1 1
erman 1
rance 1
Figure A2. Progress in LATAM In LATAM, the largest percentage of companies are in the “respond to recover” phase (35%), followed by those in the “respond” phase (26%). Mexico leads the region with 29% of companies in either the “recover to thrive” or “thrive” phase.
e o e o to re over e over e over to thrive Thrive
o a 19 1
T 1 1
ra i 1
e ico 1
48 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Figure A3. Progress in APAC In APAC, the largest percentage of companies are in the “respond to recover” phase (38%), followed by those in the “recover” phase (27%). China leads the region with 26% of companies in either the “recover to thrive” or “thrive” phase.
e o e o to re over e over e over to thrive Thrive
o a 19 1
1 1
India 1
ustra ia 1 9
China 1 1 1
apan 9 19
1 1 1
49 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
Revenue by stage and country Figure A4. Change in revenue expected in each stage In the short term, Hong Kong has the most negative revenue outlook for the “respond” stage, with 48% of companies expecting revenue to decline. Long term, the most optimistic revenue outlooks for the “thrive” stage are in mainland China (87%) and India (84%).
e o e over Thrive
China ong ong 1 9
1 1 1 11
apan 1 1 1
1 9 19 1 9
e ico 1 1 1 9
ra i 1 19 1 9
ustra ia 9 9 1 11 1
pain 9 1 11 1 9 1
Ita 9 11 1 1 1 11 1
rance 1 1 9
erman 1 9 1 1
China ain and 1 19
e ea and
India 11 11 1 11
Dec ine o gro th ro th
50 Save-to-Thrive | Enterprise transformation and performance improvement strategies during the COVID-19 pandemic
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