Pandemic accelerates transformation of global private businesses

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NEW YORK, May 17, 2021 / PRNewswire / – Deloitte today released its third report on the global private enterprise market segment, Crisis as Catalyst: Accelerating Transformation, revealing that despite market challenges over the past year, many companies private individuals believe they are on the right track to becoming more resilient in a post-pandemic environment. In fact, more than two-thirds of private business leaders surveyed expressed great confidence in their company’s prospects over the next 12 months.

Looking at how the pandemic has sped up some operations and activities, the report shows:

  • Sixty-nine percent of private companies surveyed said the pandemic has dramatically accelerated their digital transformation – not only triggering but skyrocketing the pace of adoption.
  • Sixty-one percent of private companies expect to form new partnerships and alliances.
  • Sixty percent of those polled believe supply chains need to be redesigned as a direct result of the pandemic.

In the survey of 2,750 heads of private companies in 33 countries between January 21 and March 9, 2021, Deloitte has found that a majority of organizations are building their resilience through seven key elements: strategy, growth, operations, technology, people, capital and society. Survey respondents rated their company’s status in implementing these elements of resilience to develop a “resilience score”. Using the responses to these questions, the surveyed companies were grouped into the categories of highly resilient organizations, moderately resilient organizations, and low resilient organizations.

The survey found that highly resilient organizations are more optimistic about their long-term growth potential than weakly resilient organizations, with 52% extremely confident in their prospects over the next three years, compared to just 15% of those in the weakly resilient level. Regionally, U.S. executives are the most optimistic about revenues, profits and productivity for the coming year compared to other executives of global private companies. Additionally, leaders believe growth and technology, including digital transformation, are among the most important elements for resilient organizations.

“The continued commitment of private companies to a goal throughout the past year has enabled executives to accelerate their response to the uncertainties caused by the pandemic,” said Jason downing, Vice-President, Deloitte LLP, and US Deloitte Private leader. “Our global report highlights the progress of private organizations in many areas, including digital transformation, supply chain redesign and the future of work. The research also highlights the marked differences between weak and highly resilient organizations, as the latter are more inclined to invest for growth and to assess their purpose in society at large. ”

Other key areas highlighted in the investigation report include:

Expected growth and workforce
A majority of respondents believe their business will emerge from the crisis within the next 12 months, but also believe that the far-reaching impacts of the pandemic may continue to be felt over the next few years. Private companies appear to have laid the groundwork for workforce changes through flexible workforce arrangements and redesigning their organizations to be more agile and accomplish more with smaller teams and independent, in particular:

  • Highly resilient organizations (19%) say they have already completely transformed the nature of work in their organization and 38% say they are halfway through these changes.
  • Highly resilient organizations are more likely to complete their workforce in the coming year than low resilient organizations (66% vs. 48%).

Focus on the benefits of digital transformation
Executives have broad expectations about the gains that technology investments will bring to their private organizations, and they plan to continue to scale up their technology investments. For example:

  • Highly resilient organizations were almost twice as likely (80% vs. 43%) as those with low resilience scores to say that their digital transformation started before the crisis or is currently underway.
  • The difference in how highly resilient companies perceive the importance of digital transformation for their growth compared to those with low resilience was 18 percentage points.

Companies are spending on technology in other areas as well. Over the next 12 months, information security is expected to become the most popular tech spending area according to 39% of respondents, followed closely by cloud computing (38%) and data analytics (37% ).

A sharper focus on the goal
Purpose and trust have always been closely linked in the cultivation and founding of private enterprises, but have taken on greater significance in 2020. The report found that:

  • Almost 70% of those polled said the goal had grown in importance to their organization as a direct result of the COVID-19 crisis.
  • Highly resilient organizations were at the forefront in this regard, with 84% of leaders in these organizations saying they focused more on the goal.

“As we emerge from this pandemic, we are learning that the way companies think, act and invest are hallmarks of resilience and acceleration – and will likely continue to be the themes embedded in sustainable organizations,” Downing added.

For more information on Deloitte Private’s global report, “The Crisis as a Catalyst: Accelerating Transformation,” please visit www.deloitte.com/global/deloitteprivate.

About Deloitte
Deloitte provides industry-leading audit, advisory, tax and advisory services to many of the world’s most admired brands, including nearly 90% of Fortune 500 companies® and over 7,000 private companies. Our people come together for the greater good and work in all industry sectors that drive and shape today’s market, producing measurable and lasting results that help build public confidence in our financial markets, inspire clients see challenges as opportunities for transformation and prosperity, and help pave the way for a stronger economy and healthier society. Deloitte is proud to be part of the largest global network of professional services serving clients in the markets that matter most to them. With more than 175 years of service, our network of member firms spans more than 150 countries and territories. Find out how more than 330,000 Deloitte employees around the world connect to make an impact at www.deloitte.com.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In United States, Deloitte refers to one or more of DTTL’s US member firms, their related entities which operate using the name “Deloitte” in United States and their respective subsidiaries. Certain services may not be available to certify clients under the rules and regulations of public accounting. Please visit www.deloitte.com/about to learn more about our global network of member firms.

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