Jun 5, 2020

McKinsey: business hits its digital inflection point

Georgia Wilson
4 min
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Dennis Spillecke, Senior Partner at McKinsey & Company, examines how businesses are adapting to the challenges posed by the COVID-19 pandemic...

Amid the COVID-19 pandemic, the way companies buy and sell from each other now looks very different than it used to – perhaps permanently. Although the full implications of the pandemic are far from certain, it is already clear that its economic consequences are substantial. To thrive in the next normal, B2B companies will need to continue adapting to the new economic reality.

For sales leaders contemplating how to react, taking care of their people and customers must be a top priority. Even as they manage that reality, sales leaders also need to adjust how their organisations sell in the face of new customer habits and trying economic times. In many ways, the changes in customer behaviour are an acceleration of digital trends that were in motion before the pandemic hit. We believe we are at a digital inflection point, where B2B sales operations going forward will look fundamentally different from what they were before the pandemic.

To understand how large the challenge is and actively monitor the major shifts and swings, McKinsey & Company surveyed 3,600 B2B decision makers for its B2B Decision Maker Pulse survey in 11 countries (including the UK). The trends are clear – especially around how organizations are pivoting their operations.

An accelerated migration to digital

Already moving toward digital before the pandemic, B2B companies are now taking the trend into overdrive. Seventy two percent of UK survey respondents told us that digital interactions are more important to their customers than traditional ones – a rise of 40% in significance compared to pre-COVID-19.

Signals from our survey indicate that B2B sales operations are at a digital inflection point. The pandemic has accelerated previous trends – omnichannel selling, inside sales, tech-enabled selling, and e-commerce – and 74% of UK B2B companies said they are very likely or somewhat likely to sustain these shifts for 12+ months.

No longer a “nice-to-have” feature, digital is now an essential means of doing business. Companies that provide their customers with outstanding digital experiences are twice as likely to be chosen as primary suppliers (as compared to suppliers providing poor experiences). Further, digital self-service tools are increasingly attractive to B2B customers, with live chat the highest rated channel for researching suppliers and mobile app ordering up by 250% pre-COVID.

The pivot to remote selling

With so many sales associates working from home, remote sales has quickly become the standard way of doing business. As of May 2020, in the wake of COVID-19, 97% of UK B2B companies have shifted their sales model either partially or fully to remote selling. And it may be here to stay: 58% of UK company decision makers say the remote model is equally effective or even more effective than what they were doing before the pandemic hit.

The effectiveness of the move to remote working, however, is up for debate among B2B decision makers. For every respondent who cited it as “less effective,” there was another who thought it was equally or more effective. We did find some differences by country, however, with India and the US rating remote working highest in perceived effectiveness, at 68 and 60 percent, respectively.

Business spending is one to watch

The research has also highlighted diverse attitudes towards spending. May’s survey results revealed that half of respondents said they will be reducing spend both in the next two weeks and over the long-term. Nearly 60% of U.S. B2B companies and 71% of UK respondents have already trimmed their budgets. On the flip side, 22% of global companies said they intend to increase their spending in the next two weeks and in the longer-term, potentially strengthening their position for an eventual recovery. India reported the highest anticipated spend increases in the short term. McKinsey research from the 2007-2008 recession shows that companies which spend carefully and strategically into a downturn grow faster once economies rebound.

Digital is driving the fight back

Sales leaders are already moving quickly to navigate the crisis, with the best ones focusing on how to make targeted changes that help their businesses lead through the crisis and start preparing for the recovery.

In an environment where habits and practices have changed so quickly and will likely continue to do so, sales leaders need a clear view of what their customers want and what steps their company can take to address their needs. Traditional face-to-face interactions have given way to sales and service support by videoconference, webinar, phone, human chatbot, and other means. In this remote and digital world, however, there is still a crucial role for the human touch, and that is something that we must not forget as we move forward.

To discover more insights read McKinesy's 'How B2B decision makers are responding to the coronavirus crisis' report.

For more information on business topics in Europe, Middle East and Africa please take a look at the latest edition of Business Chief EMEA.

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Jun 18, 2021

GfK and VMware: Innovating together on hybrid cloud

GfK
VMware
3 min
VMware has been walking GfK along its path through digital transformation to the cloud for over a decade.

GfK has been the global leader in data and analytics for more than 85 years, supplying its clients with optimised decision inputs.  

In its capacity as a strategic and technical partner, VMware has been walking GfK along its digital transformation path for over a decade. 

“We are a demanding and singularly dynamic customer, which is why a close partnership with VMware is integral to the success of everyone involved,” said Joerg Hesselink, Global Head of Infrastructure, GfK IT Services.

Four years ago, the Nuremberg-based researcher expanded its on-premises infrastructure by introducing VMware vRealize Automation. In doing so, it laid a solid foundation, resulting in a self-service hybrid-cloud environment.

By expanding on the basis of VMware Cloud on AWS and VMware Cloud Foundation with vRealize Cloud Management, GfK has given itself a secure infrastructure and reliable operations by efficiently operating processes, policies, people and tools in both private and public cloud environments.

One important step for GfK involved migrating from multiple cloud providers to just a single one. The team chose VMware.

“VMware is the market leader for on-premises virtualisation and hybrid-cloud solutions, so it was only logical to tackle the next project for the future together,” says Hesselink.

Migration to the VMware-based environment was integrated into existing hardware simply and smoothly in April 2020. Going forward, GfK’s new hybrid cloud model will establish a harmonised core system complete with VMware Cloud on AWS, VMware Cloud Foundation with vRealize Cloud Management and a volume rising from an initial 500 VMs to a total of 4,000 VMs. 

“We are modernising, protecting and scaling our applications with the world’s leading hybrid cloud solution: VMware Cloud on AWS, following VMware on Google Cloud Platform,” adds Hesselink.

The hybrid cloud-based infrastructure also empowers GfK to respond to new and future projects with astonishing agility: Resources can now be shifted quickly and easily from the private to the public cloud – without modifying the nature of interaction with the environment. 

The gfknewron project is a good example – the company’s latest AI-powered product is based exclusively on public cloud technology. The consistency guaranteed by VMware Cloud on AWS eases the burden on both regular staff and the IT team. Better still, since the teams are already familiar with the VMware environment, the learning curve for upskilling is short.

One very important factor for the GfK was that VMware Cloud on AWS constituted an investment in future-proof technology that will stay relevant.

“The new cloud-based infrastructure comprising VMware Cloud on AWS and VMware Cloud Foundation forges a successful link between on-premises and cloud-based solutions,” says Hesselink. “That in turn enables GfK to efficiently develop its own modern applications and solutions.

“In market research, everything is data-driven. So, we need the best technological basis to efficiently process large volumes of data and consistently distill them into logical insights that genuinely benefit the client. 

“We transform data and information into actionable knowledge that serves as a sustainable driver of business growth. VMware Cloud on AWS is an investment in a platform that helps us be well prepared for whatever the future may hold.”

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