Has the Lockdown Pushed Digitalization or Digital Divide?

By: Mohua Sengupta | Independent Consultant & Co-Founder Ventures

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Has Digitalization gained due to ‘lockdown?’  Most of us seem to think that it has.  On a lighter note, many organizations are going as far as crediting the lockdown as their Chief Digital Officer.  Lockdown definitely has promoted Digitalization but hasn’t it also increased the Digital Divide?  

So what is Digital Divide and why should one be concerned about it?

While the dictionary meaning of Digital Divide would be ‘the gulf between those who have ready access to computers and the Internet, and those who do not,’ today the term is used more and more to represent the gap between organizations which are Digital ready and those which are not.  

As we have seen in the past 6/7 years, there has been a huge buzz around digitalization, in almost all industries.  But different organizations followed their digitalization path in different pace.  While some industries leap frogged into it, some took it in slower pace, some started with only POCs waiting to be doubly sure, and some others have completely ignored the upcoming change.  While that seemed okay till this lockdown, during the lockdown the first and the second set of companies really got a huge advantage over the third and fourth set.  

All industries got affected by the Covid 19 related lockdown. Only very few industries got benefitted.  If we take a few of the commonly known industries, we can analyze what this Digital Divide truly means for that industry.  

Let’s start with Banking.  We will all agree that most of the Retail or Commercial Banks in India, were digital ready, as far as the basic needs were concerned.  And this was enough till the lockdown.  But there were a handful, who had focused on the sophistication of usage and the variety of services that they could provide seamlessly via any online medium.  And it’s the latter who could capitalize on their being digital savvy and manage a larger piece of the pie during this lockdown.  Many customers opened new accounts in Banks known for being digital ease of use.  

If we look at Retail industry, where there was a clear demarcation between the e-commerce players like Amazon, eBay, Flipkart etc., and the traditional stores, where we can walk in, and experience the tough and feel of various items before we buy them.  While a few lazy people like myself, preferred to order online, most people preferred to walk in to a store for an in-store experience.  Most Retail Brands who focused on their in-store experience, did invest in an e-commerce platform, but did not focus on it.  Only the ones who did focus came out winners during the lockdown.  The others were forced to put together a rough and dirty platform, or clean up whatever they had, in order to give their customers a smooth shopping experience.  Even when I look at the groceries in my neighborhood, there are some, who focused more on their personal connect with the neighborhood and providing extraordinary customer service by way of that personal connect, actually lost the battle during the lockdown.  They traditionally did not invest in any form of digitalization.  The ones who were more e-commerce savvy, gained.  And point to note here is that there level of digitalization had nothing to do with the size of their business, or their daily turnover.  I am not comparing a kirana shop with a grocery chain.  I am talking about almost equivalent size of business.  

One of the biggest potential differentiators of most organizations, especially those in the Manufacturing industry, is the supply chain management system.  And this lockdown has caused significant disruption to the supply chain.  And only the organizations, who had embraced digital capabilities to strengthen their SCM, could do the necessary rightsizing and automation to continue with production and distribution.  The rest struggled.  Many had to shut down production at least temporarily.  And due to this experience a lot of the companies are now investing in human intervention free SCM.

If we come even closer to home, to our children’s schools, we again see Digital Divide.  While some schools who had invested proactively in technology could quickly switch to online school and run it smoothly, but the rest struggled for months and still haven’t cleaned up all the glitches.  And once again these are all equivalent private schools with quite hefty fees.  

We can keep going on an on with examples from various industries.  The bottom-line is, every industry faced a challenge due to the lockdown, and only those who had adopted technology proactively could survive and fight back.   I think while this lockdown has really made every corner of the economy to leapfrog their Digitalization journey, it has also fast tracked the prediction made by Mary Barra, the CEO of GM. ‘At least 40% of all businesses will die in the next 10 years… if they don’t figure out how to change their entire company to accommodate new technologies.’

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