COVID-19 ‘accelerated digital transformation by an average of 6 years,’ Twilio says

Covid-19 was the ‘digital accelerant of the decade,’ pushing brands’ digitization strategies up an average of 6 years. In this edition of TechFirst with John Koetsier, we’re chatting with Twilio chief customer officer Glenn Weinstein about a major report Twilio put together on digital transformation.

COVID-19 is clearly a medical and economic disaster, but it also vastly accelerated technological change and changed how companies think about the tech that drives their business. In this discussion we chat about who’s winning and who’s losing in the fight to stay relevant as customer behavior changes massively.

Get the full audio, video, and transcript of our conversation below …

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John Koetsier: So COVID-19 accelerated digital transformation by an average of 6 years. Welcome to TechFirst with John Koetsier. We all know COVID-19, it’s clearly a medical and economic disaster. But it’s also vastly accelerated technological change in business, and changed, of course, how companies think about the tech that drives their business. To learn more, we’re chatting with the chief customer officer of Twilio, Glenn Weinstein. Welcome, Glenn!

Glenn Weinstein: Hi, John. Nice to be with you today. 

John Koetsier: Excellent. Let’s kick it off right at the very beginning. What’s been the impact of COVID-19 on digital transformation? 

Glenn Weinstein: Well, I’ll agree with your opening comment, John, that COVID-19 largely has been a disaster for the world and it’s a highly unfortunate event. It’s impacted our company in a very serious way, and it’s certainly impacted our customers.

One silver lining on this very, very dark cloud has been that it has accelerated companies’ impetus to do digital transformation, to make a change, and specifically to accelerate communications through digital means. We’ve had to rethink every type of interaction that consumers have with their favorite brands and vendors.

John Koetsier: Absolutely. So tell us who Twilio is. Why do you care? How does what you do matter here? And what do you guys, what role do you play? 

Glenn Weinstein: Sure. Well, Twilio is a software company, we’re a technology company. We provide APIs for digital communications. We’re a pretty well known brand actually in this space. Where if you are building a software platform or you’re using your website to communicate with customers through SMS messages, through voice, through connecting phone calls, to call center agents, even to sending faxes, you name it.

If it’s digital communications, you probably need an API, and Twilio is very likely your global provider.

John Koetsier: Sending faxes doesn’t sound very digitally transformed, but I realize that there are some industries like the medical industry and maybe even the legal industry where those things might matter.

Let’s start here. Okay, we have literally millions of businesses in North America and tens of millions across the entire world. What needed to change? What was the digital transformation for? 

Glenn Weinstein:

So the prototypical use case in COVID-19 has been to move to contactless transactions. Anything that involved having to hand a card to a person, or to be physically present to accomplish a transaction, to make a purchase, we’ve had to very quickly rethink and make that a digital transaction.

So delivering messages, using SMS where we would have had to maybe walk into a fast food restaurant and pick up our order, and now we’re being texted to say, ‘Come, you know, your order is ready,’ or you text the restaurant and say, ‘I’m sitting outside.’ All those types of communications writ large across many, many industries have had to be rethought really in days or weeks once the lockdown started back in March. 

John Koetsier: And to enable that, obviously there’s a whole series of things that need to happen, right? All kinds of processes that maybe happen in person behind the scenes in a company, all kinds of processes that maybe were manual in a company.

Those need to be digitized too, correct?

Glenn Weinstein: That’s right, exactly. Things that the technologists have been wanting to do for a while, that they’ve been talking to their CIO about, they’ve been talking to their board about, they’ve been trying to get funding for that had been on long term roadmaps, you know, ‘eventually we’ll rethink this and it will be, you can do it through the app, and you won’t have to call us anymore.’

Suddenly, the impetus for making those changes, you got your budget now, you got your security, the attention of your security team, so you can get a security clearance to use a different technology.

Those are the sorts of things that have had to change really quickly. And it’s one of the reasons we commissioned the survey that you mentioned at the top of the interview. This third party survey that showed that companies and organizations across the world are reporting really rapid acceleration in their digital transformation roadmaps. We’re talking years of acceleration. 

John Koetsier: So, there’s nothing like an emergency to create some clarity on what needs to be done, right? I mean, talk about those companies that are accelerating right now. Why were they taking their time? What was the holdup here? 

Glenn Weinstein: Well, I think it’s just companies have, and organizations generally, have a lot of priorities. There are different ways to spend money, different types of services to provide to your constituents, and these digital communications priorities were not always at the top of the roadmap.

And not that we were doing anything wrong, it’s a question of priorities being shifted and reoriented by COVID-19. All of a sudden, if you want to stay in business, you’ve got to figure out better ways to communicate with your customers or they’re literally not gonna be able to use your services anymore.

And if a competitor is coming up with ways to have contactless transactions and you don’t, you could fall behind, again, in weeks.

We’re not talking months or quarters or years like we usually talk. So it’s an external impetus that suddenly clear a lot of red tape, is probably the best way to look at it. 

John Koetsier: So, you said there’s a speed-up about 6 years or somewhere around that. 

Glenn Weinstein: That’s right.

John Koetsier: Talk about what that looks like, you know, what projects got fast-forwarded. And what percentage of executives are saying, ‘Hey, this is now top priority’?

Glenn Weinstein: Right. Well, the survey that we commissioned, it was done by a third party, but spoke to over 2,500 organizations of 500 people or more, and asked very pointed questions.

• How fast do you think your technology roadmap has been accelerated?
• What are you seeing?
• What have you rolled out?

And the numbers in the survey were just overwhelming that 90 to 95% of respondents reported multi-year on average a 6 year acceleration of their transformation roadmaps, and gave specific examples like we’ve talked about.

I’ll give you another example that we’ve talked about at Twilio, which is — just to make it concrete, kind of put a story in your mind — the United Way has provided social services to communities through 211. Dial up and take care of your needs, whether it’s just figuring out how to put food on the table, in some cases.

And these contact centers have been run for years and the staffing has fluctuated up and down according to need. But COVID-19 has not only dramatically increased the need for these social services, they’ve increased the breadth of the audience seeking these services, individuals that have never had to seek United Way assistance before, and don’t know what questions to ask, so the length of the calls was getting longer.

So the only way to service this really unprecedented need into the 211 lines of the United Way was to expand their contact centers. You can do that through technology, instead of hiring more contact center agents, put in an interactive voice response system to answer common questions with common answers, and then let people speak to an agent [if they] have a problem that can’t be answered on the recordings.

United Way hadn’t done that before, and it wasn’t part of the philosophy. The philosophy was people in crisis need to speak to a sympathetic person. That’s great until you run out of sympathetic people and you’ve got to solve a crisis. 

John Koetsier: Yeah. 

Glenn Weinstein: And just look at any way you have available to you. So these projects are all across the landscape in every industry, not just social services.

John Koetsier: So are there some casualties of not acting fast enough on these sorts of things? 

Glenn Weinstein: I think in the short term everybody is acting, I mean, the surveys show that over 90% of organizations have found the will or have found the impetus to move. I think there are industries that have been hit so hard that I’m not sure any amount of digital transformation is going to help.

Ridesharing companies are a big part of our customer base at Twilio and, you know, people are just not riding in rideshare companies to anywhere near the volumes that they used to. So not every industry, this is no magic bullet. In fact, even with all the acceleration that we’re seeing, I mean, overall the economies are taking a hit. Our customer race is suffering, so to some extent we’re all casualties.

But I think the long run will show which industries and which competitors in those industries were able to make the most long standing changes to their business model. Hold onto these gains because, you know, a lot of cases consumers don’t want to go back. I know in my personal experience, I like contactless checkouts at Publix and I don’t want to go back to swiping my credit card. So, companies that are able to make these changes permanent I think will, in the long run, will accelerate.

But we’ve got a ways to go on COVID-19, so we’re not, we haven’t reached the long run yet.

John Koetsier: It’s really interesting because I have a personal connection here, because my sister runs a small boutique, The Chocolate Bear Shoppe, and last year she built a full e-commerce website with online ordering and everything like that — and I hope I’m not revealing any secrets here, so she might kill me afterwards — but I mean, honestly in the first 6, 12 months or so, it wasn’t a big deal.

And I was like, I’m a little sad that you invested that money in doing that, it was a big effort, all your inventory online, same system point of sale for online and in-person and everything like that.

Glenn Weinstein: Yeah. 

John Koetsier: And I was wondering, shoot, was all that energy and all that investment wasted. Well, guess what?

COVID-19 happens, and that’s pretty much the only way that people can order, and she adds contactless to that, and she’s doing more business than she did the previous year, during COVID-19.

So, I mean, a little bit, an ounce of prevention can be painful — worth a pound of cure, I guess, is the old adage there. Talk about the company that, or maybe talk to the company, the executives at the company that did not prepare, did not get ready, did not invest in digital transformation early, and now here we are. We’re in COVID and while things are reopening to some extent, people are still leery of maybe high touch environments and physical proximity, all that stuff.

What do they do now? How do they operate now? And they’re probably on a very slim budget as well, because guess what, customers are down, what do they do? 

Glenn Weinstein: Well, you take advantage of this opportunity. In some ways you’re good, you’re smart to be late to the party because you get to skip a lot of painful learnings and jump right to the head of the class. I remember traveling around Europe in the first decade of the 2000s and noticing in Sicily that cell phones were everywhere. People were sending SMS messages. I had never seen an SMS message in 2004.

And I came to realize they sort of skipped the landline generation and went straight to mobile phones, and as a result, they were mobile enabled before the United States was. So sometimes skipping technology generations leads to acceleration.

If you haven’t digitally transformed the way that you interact with customers before, the good news is it’s really easy to do it today.

There are cloud based technology vendors that let you stand up these systems very, very quickly. If you are an organization of any size, if you have any kind of IT shop or any kind of application development capability, your developers already know how to do this. 

John Koetsier: Mm-hmm.

Glenn Weinstein: They know, and they can sign up and start sending messages today, tomorrow with a credit card. If things go well, and you get rolling, you know, hey, terrific, you’ll move to invoicing and maybe you can become legitimate.

But you can get stood up so quickly today compared to 5 or 10 or 15 years ago. It’s remarkable the transformation that the cloud has had, not just to computing, but to communications, specifically.

So, don’t hesitate, ask your developer. That’s pretty much the message. They already know how to do it. Give them permission and start experimenting. 

John Koetsier: Very interesting. Maybe let’s end here. What does the truly modern company look like? I mean we’ve seen digital transformation has been a thing for maybe a decade, maybe even a little bit longer, and we’ve seen this call to transform what we do, make things digital, automate what we can automate, don’t automate what you should not automate.

But what does that truly modern company look like? And what kind of technology foundation does it have? 

Glenn Weinstein: So the truly modern company is oriented around communications. People ultimately don’t want to use apps, they want to have a conversation. And there’s an evolution going on that we have evolved from websites to mobile apps, and we’re going to continue that evolution to conversations. Talk to your customer or your constituents wherever you’re serving, in the place that they want to be talked to.

If they’re in WhatsApp, talk to them in WhatsApp. They want to be talked to in Facebook Messenger, then be there. SMS messaging is historically incredibly powerful.

People know that we’ve kept the spam out of SMS, so people respond to SMS messages. Figure out where folks want to talk to. Video has been absolutely exploding in the last six months. I think about the telemedicine argument for speaking to your doctor over a video link and reserving medical visits for only really high priority situations.

So all of these communications technologies are really coming to the forefront. We figured out applications, that was sort of the last decade. We’ve gotten banking online and all that kind of stuff. The future is in getting these conversations to be super smooth, and getting it to the point where you really don’t need the app anymore. The transaction occurs in the conversation. That’s the modern vision we have for the next decade or so.

John Koetsier: Interesting, interesting. Well, thank you, Glenn, for spending some time with me. 

Glenn Weinstein: You’re welcome, John. Thanks for having me today. 

John Koetsier: Really appreciate it. For everybody else, thank you for joining us on TechFirst as well. My name is John Koetsier, of course. Appreciate you being along for the show. You’ll be able to get a full transcript of this podcast in about a week at JohnKoetsier.com and the full story at Forbes will come out shortly thereafter. Plus the full video, of course, is available on my YouTube channel.

Thanks for joining, maybe share with a friend. Until next time …  this is John Koetsier with TechFirst.