The recent Covid-19 pandemic has brought profound changes to the way companies and their stakeholders interact with each other, promoting the rapid and widespread adoption of digital channels to support most of their interactions, which is already visible in the 2020 study “Digital Economy and Society in Portugal”. Also in Portugal, and for example, the Association of the Digital Economy predicts that the value of B2C and B2B e-commerce will amount to 110,6 billion euros, compared to the 96 billion euros reported in 2019.
Around the world, companies are looking to react to a significant change in their business models and working methods, in order to maintain not only their operating capacity but also their competitiveness.
About 40% of CEO who participated in the 2021 Global Digital Trust Insights, conducted by PwC, reported having accelerated digitization processes in their organizations in the first three months of the pandemic.
We talk about trends like remote work, industrial automation and robotics, chatbots customer service, entertainment based on virtual reality, digital health, use of in cloud and much more. Also about 50% of CFO respondents to the PwC COVID-19 CFO Pulse Survey say that improving the remote work experience is at the top of their agenda, so they plan to accelerate automation and the development of new ways of working in the short term.
In a context of great uncertainty, it is not surprising that, with regard to investment decisions, 82% of CFO claim to plan to reduce or postpone them due to the current economic outlook. However, when the topic is investment in digital transformation, only 11% equate to making these reductions, and investment in digital transformation is expected to increase worldwide at a compound annual growth rate (CAGR) of 15,5%, from 2020 to 2023.
The data above seem to indicate that organizations are betting on digital transformation as a significant pillar of their response to the current economic context. The digital transformation in companies and government agencies is no longer just a strategic decision, but a necessary reality.
If decisions of this magnitude are not easy to make, especially in a period of great uncertainty, the emergence of European funds can be a decisive factor in this assessment.
The funds of Portugal 2020, Multiannual Financial Framework 2021-2027 and the European Recovery Plan (Next Generation EU) will allow Portugal to benefit from a significant volume of funds, which should be invested over the next nine years in the recovery and expansion of national economy, partly through support to state companies and organizations.
Effectively, the MFF 2021-2027 allocated Portugal a total of 29,8 billion euros, to which are added the funds destined to the Portuguese Recovery and Resilience Plan (PRR), which will have about 12,9 billion euros in grants and with the possibility of allocating around 15,7 billion euros in the form of loans.
In this context, Portugal presented to the European Commission a document that defines the country's investment priorities for the recovery of the economy, structured around three dimensions - Resilience, Climate Transition and Digital Transition. The PRR foresees a value of 2,9 billion euros to support the digital transition of the country, State agencies and Portuguese companies.
Companies now have an additional financial resource to support their aspirations for digital matrix structures and business models, which allow to dematerialize transactions, processes and ways of working, contributing to accelerate the digital transformation towards more efficient organizations and focused on the experience of the consumer.
The bet on predictive information models that promote decision making in real time, the widespread adoption of technologies for process automation, new governance models and organizational structures and processes that provide greater confidence, traceability and security of data, will be options on the table. It is now necessary to clearly identify the strategic ambitions of each organization and understand those options that, properly combined, better integrate into the existing technological architectures.
Also vital for the analysis and selection of projects is the balance of the transformation portfolio between tactical projects (of execution and quick return) and the most strategic ones (transformers in the medium and long term), as well as their relevance for the competitiveness of companies , state and economic bodies. The “execution capacity” of these projects, either due to the requirement of the timetable or the complexity of implementation, will be extremely important to ensure a real and sustainable impact on the economy and companies.
The challenges that arise do not end here and extend to the entire conception of a model that allows a judicious and quick use of funds by companies and state agencies. Themes such as the amendment to the Public Procurement Law, the definition of criteria for allocating funds and the strengthening of investment control mechanisms will be the key to the success of an efficient allocation of funds. Portugal and Portuguese companies cannot fail under the risk of having their competitiveness reduced in the European market reduced in the medium term.
The author writes according to the old spelling.