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Alongside the many pledges made by governments throughout the COP26 summit, a central outcome of the meeting was a clear shift in momentum for businesses towards net zero. As the latest report by Intergovernmental Panel on Climate Change (IPCC) indicates, climate change is a 'code red’. Now, businesses will need to adapt to a low-carbon economy fast, otherwise they could find themselves exposed to a variety of new government regulations further down the line and could risk losing customer loyalty.
The UK government also announced that by 2023, all publicly listed companies and financial institutions in the UK will be required to publish plans detailing how they will meet the country’s 2050 net zero target. This follows BEIS’ (The Department for Business, Energy and Industrial Strategy) statement last year, which urged businesses to curb their carbon emissions by making changes to the technology they use and buy to run their organisations, including accelerating their cloud migration plans.
Both signify what is to come and, indeed, what will be essential to the future of work. As outlined in the IDC FutureScape: Worldwide Sustainability 2022 Predictions report, 40 percent will embed sustainability into their operations by 2024. The rapid digitalisation triggered by the pandemic presents the opportunity to rethink how we make decisions and how we apply technology in new and meaningful ways. Now is the time for enterprises to capture the true value of digital transformation and drive more sustainable solutions.
A year in review: mass digital acceleration
Of course, practically every organisation has accelerated their digital transformation initiatives since the start of the pandemic. But how many business leaders have managed to create sustainable digital enterprises? Sustainability has been on the business agenda for quite some time, however, it has largely been driven by corporations’ desires to appeal to customers. According to KPMG’s Technology Industry CEO Outlook study (2020), 57 percent of global tech leaders now believe managing climate-related risks will be a key factor in keeping their jobs moving forward. The tone of COP26 indicates that climate change needs to be taken more seriously, by governments and businesses alike – technology may hold the answer.
To meet these expectations, businesses need to align their digital transformation and sustainability objectives. Throughout the pandemic, digital transformation has offered leaders an opportunity to review their operational model and make fundamental changes to their day-to-day business practices. As part of this, organisations have had to reconsider the basic interactions between people, processes and technology when they first transitioned to remote working. Whilst the initial move may have proven challenging, as McKinsey research suggests, given the uncertainty with regards to the future of work, 95 percent of leaders will be continuing with their transformation efforts this year. Now is the time for leaders to consider how they can integrate more sustainable IT solutions and practices within their organisation.
Digital transformation and sustainability are fundamentally linked
At a basic level, digital transformation is an enabler of more efficient and sustainable business practices. Since the start of the pandemic, organisations are now using digital documents and e-signatures, reducing their paper consumption, and have begun migrating nearly all their operations to the cloud, which is generally more energy efficient than on-site IT and data storage. This has
forced leaders to reconsider their business operations, and in doing so, opt for more sustainable solutions. That being said, given the disruptions posed by the series of lockdowns, many organisations have rushed their transformation programmes, with the focus purely being on keeping the business alive and running. Leaders will not have necessarily considered other ways in which their business could operate more effectively, or sustainably, long term.
Indeed, whilst the benefits of such initiatives are well known, the uptake is still rather slow, and organisations are reluctant to make serious commitments or changes. Too many companies still rely on legacy systems with largely paper-based processes that lead to higher energy outputs and waste. According to IDC TechBrief, only one in three companies use electronic signatures, with many still opting to print paper copies of documents or contracts. Now is the time for companies to ramp up their transformation efforts and pursue more sustainable solutions. However, digital transformation much like sustainability, cannot be rushed; it’s hard for leaders to know exactly where to begin.
Digital transformation is a journey – sustainability is a process
The pandemic is the most unplanned reason why businesses have chosen to accelerate their transformation programmes. Out of sheer necessity, boards and C-suite executives have opted for short-term solutions, with the hope of stabilising their business as quickly as possible. However, as Conga’s research suggests, only 36 percent of these transformation projects are considered successful. Initiatives were often driven by the desire to adopt the latest technology as a means of solving the business’ problems, rather than establishing clear objectives. The first step in formulating an effective strategy is to measure where the business currently stands in its digital transformation journey, that is, what works, and what does not.
In order for digital transformation to be effective, leaders should try to simplify or streamline one critical business process at a time – that is, stage by stage, rather than adopting fully transformational technology without identifying how it benefits the operational cycle. This is also how businesses should approach their net-zero initiatives. Sustainability, much like digital transformation, is a journey. Leaders need to review areas of the organisation stage by stage, identifying room for improvement. Likewise, as businesses adopt more digital channels and look to reduce their carbon or paper footprint, they may find another process that needs to be addressed or that requires further tweaking. In order for any transformation or sustainability programme to work, leaders need to take a step back and review how they operate on a daily basis. They need to consider how they can integrate environmentally friendly practices within their core business logic and identify which digital technologies will help them to achieve these goals.
Interestingly, Conga research has found that 92 percent of organisations with a digital transformation strategy in place have experienced barriers to the process, whether resistance to change from management or the workforce. What this indicates is that employees need to be on board with transformation programmes from the start and accept the need for change. Moving forward, it is vital that employees are involved in this process and actively encouraged to perform in an envionmentally-friendly manner day to day. However, technology must be implemented with their wellbeing in mind.
As the COP26 summit has indicated, climate change is an immediate danger. The World Economic Forum’s recent Global Risk Report outlined that environmental issues will continue to dominate the top five global risks in terms of impact and likelihood. Whilst the pandemic has led to a shift in priorities and encouraged leaders to explore alternative ways of doing business, they cannot stop now. Digital transformation is here to stay and provides us with an opportunity to drive our sustainability efforts.
The insight gained from over the last year should shape organisations’ contingency plans for years to come and lead to more sustainable and purpose-led business practices. It’s vital that we engage all employees, at every level – from the board room right down to the sales team.