Management Professor Studies Digital Transformation in Age of COVID

Associate Professor Stephan Kudyba teaches business analytics and management information systems in NJIT's Martin Tuchman School of Management. He recently published an article, "COVID-19 and the Acceleration of Digital Transformation and the Future of Work" in Information Systems Management. Following are his additional comments for the NJIT community, lightly edited.

Q. How do you define digital transformation?

A. Digital transformation has expanded its scope from earlier times where the term digital referred mostly to a data resource. Over the past decade, the concept of digital transformation began encompassing a broader spectrum of technologies. Digital technologies entail electronic devices used for communication, transactional and operational activities. These technologies became increasingly integrated with traditional systems. So, digital transformation from a broad perspective is the utilization of available technologies to produce, replace or augment operational processes of organizations. It is comparable to the concept of information technology intensity that prevailed back in the mid-1990s through early 2000s, which involved the most recent wave of technological transformation of business. 

Q. On a scale of 1 to 10, with 1 being the least advanced on the path to full digital transformation and 10 being fully there, where do you think the average business was before COVID compared to where it is now?

A. There was a definite bump for the average company. I would rank the status as a 5 pre-COVID to an 8 during COVID. It must be noted that although companies may have adopted more technologically-based initiatives, it doesn’t infer that those technologies are being used to their optimal potential. Despite the progress of any organization in transforming their operations, I would hesitate in mentioning that anyone is ever done transforming or reaching a 10. The progress of digital and technological innovation is so fast-moving and continuous that the transformation process will be ongoing for quite some time. The best companies achieve a 9.

Q. To what extent should people question the common assumption that digital means good and non-digital means obsolete? What business processes are better when performed in non-digital (analog) ways and should stay so?

A. I wouldn’t use the term analog anymore. It's an outdated concept in business. I hesitate in categorizing anything as good or not good regarding technological and digital functionality. I say that organizations should leverage digital strategies to transform their operations if it enables them to become more efficient and profitable, and provide a greater value and experience to consumers while maintaining ethical standards. But remember, digital may not be the most appropriate mechanism for all types of companies. A business has to ask itself — what does our customer base really want? If the answer includes a personal, face-to-face, relationship-building perspective, then heavy systematic processes may not be the appropriate strategy. When you go to your favorite restaurant, do you really want to order from an electronic menu? A good debate exists in the realm of finance, where those who advocate for advancements in artificial intelligence and automated advisory services in wealth management battle with those who prefer personal relationship building. The answer there is that digital technologies can provide significant support to wealth managers in providing better value to their clients. I think that is the real sweet spot to all digital transformation — if done properly, it augments the performance of existing labor and with automation of some tasks, it frees up time for more productive strategizing and knowledge projects — hence we call it the future of work.

Q. What mistakes did companies make as they rushed out ad-hoc digital transformation during the pandemic, compared to mistakes made in digital transformation during normal times?

A. A major positive from crisis situations is that organizations and people in general enhance their knowledge base and shorten learning curve cycles because of the criticality they face. A major way businesses dealt with digital implementations and problems that arose was the adoption of agile project management tactics. This refers to a highly communicative environment of project stakeholders and flexible, adaptive tactics to achieve objectives. 

However, perhaps one of the most noteworthy negative issues that organizations experienced in going digital during COVID was dealing with online security in communications, such as cybersecurity against hackers. I think the focal point was just to get online communications to work on a grand scale where security may not have been fully addressed. 

Q. As people get vaccinated and the pandemic wanes, to what extent will offices return to traditions compared to permanent changes such remote workers, staggered in-person shifts and distanced cubicles?

A. Another positive that can result from adapting operations in a crisis situation is that organizations more quickly understand the types of technologies that work well in achieving process enhancements and those that don’t, because they are being utilized in a high-demand environment. When the pandemic wanes, organizations will be more equipped with the knowledge of how much office space they need, how much work can be done effectively in a remote tech-based approach, which processes need face-to-face deliberations among workers, and so on. Whether you like the term “new normal” or not, there most likely will be a different utilization of time spent in centralized offices, allocations of technology to employees for remote communication, and strengthening of privacy and cybersecurity firewalls. Companies simply have had the opportunity to understand that not every meeting has to be in the office and employees don’t have to report to the office on a daily 9-to-5 basis. With this technology-based environment, workers will have to be accustomed to routines such as rigid schedules and activity-based tracking through metrics.

Regarding companies going back to a more traditional normal, you have to consider companies that require labor activities in carrying out their business. Consider industries that require drivers, assembly personnel and service workers. When the pandemic wanes, it's back to normal business with simply some cognition of social distancing.

Q. Other than another crisis (pandemic, major war, climate disaster, civil unrest, etc.), what do you think is a predictable next major leap in digital transformation?

A. The next major step in the digital era, assuming a near-term end to the pandemic, is an adjustment to more optimal utilization of technologies. Many workers already have access to robust platforms such as Salesforce or Slack, but probably don't fully understand the capabilities. An advantage of working in the pandemic environment is that people and organizations were forced to go digital and fully experience its benefits and drawbacks. I think you’ll see businesses increase their use of technologies in general, appreciate the functionality they have come to understand and avoid using it in scenarios when it produces sub-par results. As my research identified, there are frustrations when things are fully digital, such as burn-out, lack of ending times for workdays and difficulty in sensing subtle communications in meetings. An underlying constant to digital transformation is that analytics — both conducting it and using it for managing organizations — will become even more prominent.

One major aspect I’m keeping my research eye on, and which many others are as well, is the incorporation of the various aspects and capabilities of artificial intelligence in processes. We are just scratching the surface on the power of this technology. Another topic is the emergence of more diverse groups involved in strategic initiatives. Organizations have realized that to effectively harness the functions of all the available technologies to improve value and a positive experience to consumers, a diverse team approach of workers with a portfolio of skills and perspectives will be more evident.

Q. How would you summarize digital transformation's differences for businesses compared to higher education, such as at NJIT?

A. When considering the pandemic effect and digital transformation for the academic world, the situation is just as daunting. However, there are some similarities to achieving success in the crisis environment for both business and academia, as they shifted to an almost total digital platform. These of course entail applying the correct technologies to facilitate a functioning market and also applying adaptive decision-making to adjust to the severity of the pandemic. A major underlying requirement to all of this entails providing appropriate support and open communication of relevant information on an as-needed basis to all stakeholders — students, staff and professors. I would have to say that given the diverse student body, extensive academic curricula, geographic location and governmental policies, NJIT has done a pretty good job.