COVID-19 that originated in China and turned into a global pandemic, has changed a lot of things in the business world and in our social lives. “Macro Trends in the New Reality”, prepared by KPMG, intends to shed some light on the uncertainty created by the pandemic, define the ‘new reality’ that emerged from the pandemic, and act as a guide in adapting to this course.

The report evaluates the macro trends of the new reality through PESTLE analysis: from political, social, technological, and environmental aspects. Shifting the global political balances, COVID-19 pandemic also causes uncertainties in the economic order. It also brings acceleration to digitalization and automation in the area of technology, while transforming people’s social approach and preferences. It is believed that the crisis created by the pandemic will bring new regulations and make the impacts of the climate crisis more visible.

Underlining that globalization was the rising trend in the world since the beginning of 90s, the report states the new rising trend is protectionism, which shows that the global situation has evolved into its opposite. Although countries are in cooperation with each other through free trade agreements due to their foreign trade and customs policies; protectionism and nationalism have become the rising trend for global trade, which will remain on the agenda of many markets in post COVID-19.  Protectionism measures that have been rising due to the impacts of the pandemic mean to reinforce local producers against foreign competition. 
 
Managers face a difficult test

Such uncertain times require managers to be able to face a difficult test. The report states that in order to stay standing under such circumstances, companies should work on scenarios addressing unlimited possibilities, and therefore need assistance from dynamic financial models supported by artificial intelligence. The report suggests companies to use zero-based budgeting method for their annual budgets and strategic business plans. It is estimated that self-imposed hibernation method may be used as a significant crisis management tool in the coming period, while managers are recommended to prepare themselves and their companies for that period.

Importance of supply chain management has once again been underlined during the COVID-19 pandemic. The report lists the supply chain problems experienced during these challenging times as supply & demand shocks and stock management, access to raw materials and logistics, supplier visibility, increase in production costs and labor-force issues. Precautions for supply chains include ensuring cash flow, liquidity and working capital management. According to the report, medium and long-term actions for supply chains include investment in technological infrastructure, managing supply chain risks, improving suppliers and creating micro supply-chains.

Changes expected in investment climate

Investment climate was also impacted by the pandemic. It is estimated that devastating impacts of the pandemic on the investment climate in some markets will take long. In this respect, the report estimates radical changes in organic and inorganic investment decisions as well. Countries that already have a well-established production infrastructure and capability, strong geopolitical location, and trained labor-force are estimated to stand out for investors. Customer behaviors that have changed during the pandemic drive organizations to re-determine their customer strategies for post-pandemic period. It is estimated that customer will be put in the center of business models in the new reality. According to the six-pillar customer experience model in the report, empathy, personalization, time and effort, resolution and integrity will be the key areas for customer experience in the new reality. 

The report suggests that 2020s will be the years of working from home, adding that the biggest responsibility and burden fall on the shoulders of managers in an organization where working from home is the common practice. According to the report, each organization has different levels of maturity and cultural preparedness for remote working, therefore action plans and starting points should be determined through customized analysis for each organization. New strategies are definitely required for team management and effective working methods in the coming period, while employees will require better planning and communication so that they can see their places in the strategies and targets of their companies and understand the importance of their deliverables.

COVID-19 accelerates digital transformation

COVID-19 pandemic accelerates digital transformation. Researches conducted since the beginning of the pandemic have indicated that organizations need to define and design the four pillars of their structure from scratch. Those four pillars are defined as customer engagement, new definitions of the nature and value of assets, everything as-a-service, and workforce of the future. Moreover, as smart city trend is getting better recognition within the scope of digitalization; KPMG’s future projection in this area includes intelligent transport, intelligent healthcare, intelligent infrastructure, and intelligent energy and communication technologies.

Technology also prepares healthcare sector to the new reality. Healthcare sector that continues to work tirelessly to produce vaccines against the pandemic, makes huge investments in technology. According to the report, future of healthcare technologies include wearable technologies, artificial intelligence, sensor technologies, big data analysis, robotic surgery, cloud systems and internet of things. 3D printers will be used more frequently to manufacture implants, while telehealth infrastructure is expected to be reinforced by wearable medical devices. In addition to preventive healthcare services, precision medicine is another item in the agenda of the healthcare sector. Precision medicine is estimated to become a routine for the healthcare sector by 2030. Micro-personalized treatment approach means that genetic features should be considered during medical treatment, which will minimize the risk of wrong treatment and make it possible to avoid financial burden of unsuccessful treatments.

Sustainability and financial reports vary depending on the circumstances experienced by each company