Much has been written about the impact of the pandemic on our daily lives. Locked down in our homes, consumption of technology for business and leisure has reached unprecedented levels. Many commentators have explored how this will play out post-lockdown; reduced international travel, sustained high levels of video calls and softening demand for office space are just some examples.
For technology businesses and investors, it is not what is happening in our homes that is most interesting, but the conversations happening in (virtual) boardrooms. The pandemic and resulting lockdown precipitated the biggest business continuity test imaginable. And it has not gone well. The failings of large organisations to address their technical debt have been thoroughly exposed.
In general, the larger the company, the worse they have fared. Short term focus on maintaining the share price, incentives that reward maintaining the status quo and support a ‘if it ain’t broke, don’t fix it’ mentality, and the inertia that plagues large organisations, have left companies ill prepared.
The problems these companies face are non-trivial. I have heard of large telecoms companies and financial institutions unable to effectively service their customers as a result of reliance on humans – who are in lockdown and unable to work remotely – to plug holes in antiquated systems. Shockingly, the core systems on which these multi-national enterprises run can be up to 30 years old.
Conversations about how to improve core systems and have a genuinely robust business continuity plan are now taking place around the world. The impetus the pandemic has provided is overcoming institutional inertia and fear of change. Management are realising that, whilst changing fundamental components of a business is not without risk, it is far riskier to do nothing and be caught out a second time – simply maintaining the status quo is no longer enough to collect salary and bonus.
For technology companies that offer solutions to these pandemic pain points, there will be an abundance of opportunity. Buying conditions will be as favourable as at any time in living memory. Not only do prospects have an urgent need for a solution, but they have organisational support to get through procurement and onto successful implementation. Speed is now of the essence.
Looking at the healthcare sector providers some sense of what is to come. Traditionally, selling into hospitals, particularly in the UK, meant excruciatingly long sales cycles and endless bureaucracy. Now, driven by the urgent need to find solutions, we are seeing start-ups going from first engagement to signed contacts with hospitals and healthcare organisations in a matter of weeks.
The future is clearly uncertain. Nobody is sure how big any post pandemic recession might be. What we do know is that the lessons learned across boardrooms of big companies these past few months will have a lasting and meaningful impact on the way management considers technology. For start-ups and technology companies, this presents a unique opportunity for growth and expansion.