By Guest commentary Tuesday, September 1st, 2020

By Paul Witman

It was not that long ago when businesses, especially startups, talked about viral scalability as something they really hoped to need. They worked toward making their business “go viral,” spreading rapidly among a population of new users and driving up demand, revenue and eventually profits.

The term “viral” carries a more ominous tone since early in 2020. Some businesses have had to rapidly scale up, taking on enormous numbers of new customers. Others have had to scale down, reducing costs and losses in a time of greatly reduced demand. Their ability to make those adjustments smoothly matters not just to their business viability, but also to their employees, customers and suppliers.

Take, for example, the grocery industry. Overnight, many folks who viewed themselves as at risk for the virus took to grocery delivery services for the first time. Services that had previously promised, confidently, that they could make deliveries in an hour or two were now looking at delivery times as long as one to two weeks!

Issues included availability of products in stores and a shortage of paid shoppers and drivers relative to the new demand. Some drivers were reluctant to come to work, fearing for their own safety. Finally, the software systems that accepted orders and scheduled them with drivers were challenged to accurately forecast deliveries with all the underlying uncertainty.

Individual products also became hard to find—toilet paper and cleaning products were subject to hoarding, but they also were affected by changes in demand. Consumers were buying more to use at home so manufacturers had to quickly change production to produce more consumer-packaged products, as opposed to large rolls of toilet paper for commercial settings.

More recently, a similar issue has cropped up with soft drinks with a shortage of aluminum cans, driven by a shift from bars and restaurants to home consumption. Grocery stores, delivery services and manufacturers have all spent time catching up and helping consumers get the products they need.

Restaurateurs have been highly challenged as well. With inside dining still largely curtailed, all restaurants have had to find a way to cover their costs and keep afloat. Many partnered with food delivery services, though these take a substantial share of their revenue. Others relied on direct takeout orders but had to adjust staffing and technology to take phone and online orders, process payments and keep sufficient food and packaging in stock to meet demand.

Then there are the online meeting and conferencing services, and other work-from-home tools. One conferencing service reported a dramatic uptick in demand in March and April, from 10 million users to 300 million. That represents a great opportunity for more revenue, but also a great obligation to serve all of those customers well.

It is important to note that users of conferencing services might perceive failures of their internet provider and home technology and even their own errors to be the fault of the conferencing service, so it is doubly important to make services are easy to use and understand. That said, many technology and service providers have done remarkably well in coping with these radical shifts in demand.

While serving these changed demand curves, all organizations will need to plan for the day when the pandemic winds down. They will need to quickly adjust to handle more in-person dining, fewer grocery delivery orders and changed demand for packaged products. The businesses and nonprofits that can best prepare their organizations’ people, processes and technologies for those changes in demand will be better prepared for the years that lie ahead, and all the changes that are yet to come.

• Paul Witman is the director of the Master of Science in Information Technology program at California Lutheran University.