2021 Year in Review: How Disruption Led to Digital Transformation

On New Year’s Eve last year, no one was particularly sad to see the end of 2020. It may be destined to become like 1776 or 1929: one of those dates that kids learn about in school as marking a turbulent event in human history. And while it has certainly been a challenging time in both 2020 and 2021, it has also presented opportunities for learning, change, and growth. This 2021 year in review highlights examples of business sectors and models that have fundamentally transformed in the past year – both culturally and digitally – and the benefits these transformations are delivering.

2021: Digital transformation took center stage

A year ago, it seemed that if there was anything to learn from 2020, it would come in the form of a cautionary tale. In the midst of a pandemic and political upheavals, it didn’t seem there was much to be optimistic about. But today, as we make our way through the final moments of 2021, a story is beginning to emerge. It has a phoenix theme – of worn-out things crumbling away to make way for rejuvenation. And it’s a bit of a cliff-hanger as well because in the opening act, two of the most important characters (technology and medicine) were asked to perform daring feats they’ve never done before.

As people continue with vaccines and booster shots, we know that medicine has done its part. But technology performed as well. Digital transformation was a major focus for businesses as legacy processes and old-school systems could not meet the urgent demands of employees and customers. Out of necessity, artificial intelligence (AI)-driven smart systems were quickly implemented to help us work, communicate, shop, and become more resilient in a locked-down world. At the end of 2021, these new technologies and tools continue to mature and digital transformation is helping to create a future where people are shaping the world to fit their needs and preferences, rather than the other way around.

Hybrid workplace models come into their own

When almost overnight the bulk of the nation’s workforce didn’t go into the office, nobody quite knew what to expect. One thing was clear in 2020 – HR tech trends were accelerated by about five years in just a few months. And then in 2021, the statistics started rolling in and we learned that remote workers are at least as – if not more – productive than they are in the office. In fact, a two-year study of over 800,000 employees at Fortune 500 companies determined that employee productivity was the same or better during the height of lockdown than it was in the same period in 2019.

Video call on tablet

As the year progressed and workforce technologies got better, faster, and more powerful, we began to realize that remote and on-premise were not necessarily either/or options. In 2021, we saw a meteoric rise in the “hybrid workplace” concept – where businesses could retain the culture, stability, and social interaction of a physical office while giving their employees the flexibility to choose remote work for some or much of the time.

The smart, AI-powered HR technology that first helped to manage a suddenly remote workforce, has matured in 2021 and now empowers employers and employees alike to customize goals, roles, and structures. These increasingly powerful technologies mean that hybrid teams can be driven by shared, measurable priorities rather than hands on a clock. Night owls can do their thing at midnight; early birds can get cracking at dawn – all connected to live, interactive systems that never sleep or need a break. 

A two-year study of 800,000 employees at Fortune 500 companies determined that employee productivity was the same or better during the height of lockdown than it was in the same period in 2019.

Greatplacetowork.com

Resilience born of disruption: Supply chain issues in 2021

For several years, trade unrest and shifting consumer expectations had been straining supply chain operations to an uncomfortable degree. For many businesses, their global supply chains were being held together with legacy systems and outdated processes. But it took the shock of the pandemic to highlight the full extent of supply chain issues and vulnerability and to really catalyze modernization and digitalization in this sector. As we reach the end of 2021, we are beginning to see a much more strategic (and less reactive) application of the AI-powered technologies needed to run complex and resilient supply chains.

In addition, the Amazon Effect isn’t showing any signs of waning in 2021, with over 90% of consumers now seeing two- or three-day delivery windows as the absolute baseline and 30% expecting same-day delivery options. These trends are particularly taxing on the last mile delivery links in supply chains, where large shipments and inventories atomize into millions of single orders, all with unique destinations and schedules. Fomented by lockdown, 2021 saw the expansion of armies of e-bike and personal car owners transformed into powerful on-demand, last mile delivery networks – managed by user-friendly apps and smart, cloud-connected supply chain technologies.

Shared mobility and changing attitudes about transportation

For the auto industry, 2021 was marked by shortages and backlogs that carried over from 2020 and affected manufacturers of both gasoline-powered and electric vehicles. The recent rise in remote and gig work also reduced car usage (and reliance). Furthermore, millennials are buying fewer cars than the generation before them. No single one of these factors on its own led to a significant change in vehicle ownership preferences in 2021. But when you add them all together and throw in a handful of anxiety over climate change, you see a new consumer culture beginning to emerge around cars and how we use, share, and own them.

And while North Americans still have an overall preference for private vehicle ownership, we’re seeing phenomenal growth in urban micro-mobility usage (e-scooter and e-bike sharing networks) with a strong and steady trend toward simpler and more accessible car-sharing solutions and apps.

Omnichannel retail: Everything, anywhere, all the time

A lot of retail sector data has been gathered in the past 18 months and it’s clear that online shopping levels will not go back down to where they were before the pandemic. But it’s not really the volume of e-commerce that is the story for 2021 – it’s the shopping experience as a whole. In 2020, for your store to survive, it had to offer smooth online ordering and fast, flexible fulfillment and delivery options. If these choices weren’t available, you simply didn’t have any customers.

More than one-third of Americans have made omnichannel features such as buying online for in-store pickup part of their regular shopping routine since the pandemic, and nearly two-thirds of those individuals plan to continue.

McKinsey, 2021

In 2021, as consumers return to brick-and-mortar shops, they still want all the micro-fulfillment choices that they get online – only they want them to seamlessly integrate with their in-store experiences as well. For example, if a shopper tries on an item in the store, they want to be able to scan it and add it to an online cart, so they can look at it later. Finally, if they end up returning that item, they don’t want to drive all the way back to the store – they want to choose to have it picked up or to drop it off at a choice of logistics providers within blocks of their home.

Shoppers have wanted this degree of flexibility for a long time. But once again, it was the pandemic that helped to accelerate many of the e-commerce technologies driving the complex omnichannel demands we’ve seen emerge in 2021.

Hand holding digital tablet smart phone, using AR application to check special sale prices in clothing store

Using data and technology for sustainability goal setting

If the pandemic hadn’t served as a strong enough reminder of the volatility of the natural world, that point got driven home in 2021 by a devastating series of global climate and weather events. China dealt with some of the most severe sandstorms in history. Californians battled through the worst fire season on record. Southern Europe endured snowstorms and brutal wildfires. British Columbians in Canada were beleaguered by unprecedented heat, fires, and flooding. The summit of Greenland even saw rain (instead of snow) fall for the first time in history.

With a new political administration in the U.S. and growing commitment to decarbonization, 2021 was a year of “walking the walk.” A reduced tolerance for platitudes and greenwashing has meant that companies have had to demonstrate real and measurable results from their sustainability efforts. This past year, it grew ever clearer that smart, cloud-based solutions would deliver the analytics and sustainability insights to set and achieve more robust decarbonization goals while remaining competitive and profitable.

Rising from the ashes with smarter and more resilient business technologies

It’s impossible to mention all the industries and sectors where business models and technologies have evolved irrevocably in 2021. If so, you’d be reading 2021 year in review until the final strains of Auld Lang Syne. In the end, it goes back to the phoenix and how it’s such an apt old-fashioned metaphor for a modern technological phenomenon: Disruption leads to innovation and digital transformation.

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