In this second installment of the two-part series, looking at automation implementation at SMEs, we look at digitalisation and the impacts COVID-19 have had on SMEs.
Society is morphing away from the traditional analog methods of yesteryear, towards a new era filled with digitalisation. New jobs have been created, information is everywhere, and for the most part, paper has been replaced with screens and pixels. Digital technology surrounds us, and despite the speed at which this change is occurring, digitalisation is still in its infancy. Digital technologies, like the Internet of Things (IoT) and cloud computing, have quickly emerged as an effective, and equally crucial, tool in the modern business' arsenal. It's happening so fast, that even with COVID-19 complications, the rate of adoption hasn't slowed. COVID has emphasized the importance of digital technology in the modern workplace and has significantly increased technological adoption rates as much as 20 times.
So, what are these digital technologies? And how can you manage the unique risks that have arisen with their adoption?
Despite being one of the most recent technological developments, IoT has quickly become one of the fastest growing. Experts predict that by 2025, there will be over 41 billion IoT devices connected globally. But what is an IoT device? Think of them as any object connected to the internet that can be controlled remotely or communicate information, in the form of data, to another IoT device. Most notable IoT devices include smart watches, smart TV’s, Google Nest and the Amazon Echo. Typically, IoT devices are things that aren’t normally associated with internet connectivity. Hence why smartphones and personal computers are not considered as IoT devices. There are endless possibilities to the types of objects that can be converted into IoT devices as well. Lightbulbs, watches, coffee machines, and cars can all become connected IoT devices. If it can be controlled with an on and off switch, and communicate data via the internet, then it can be considered as an IoT device.
By themselves, IoT devices are not entirely valuable to a business. Their value comes from the interconnectivity between other devices on the same network. The sharing of information and data through the IoT can help SMEs improve their systems, processes, and efficiencies. Every industry can take advantage of the capabilities of IoT too. In the manufacturing industry, IoT devices provide expansive opportunities for data analysis by pinpointing issues in the manufacturing process to allow for preventative maintenance. In the retail industry, GPS and RFID technologies provide accurate tracking information that feeds back to both customers and businesses. This provides customers with the peace of mind knowing where their goods are, and helps businesses accurately keep track of stock. The healthcare industry has also seen invaluable benefits come with IoT implementation. Through the use of wearable sensors, patient monitoring abilities have been enhanced, which can lead to an improved quality of life for patients. Data gathered from IoT networks has also helped hospitals fight against COVID. Sensors are allowing for hospital staff to accurately keep track of where vital equipment like beds, respirators and vaccines are located.
Another recent development within the automation technology sphere, cloud computing has become a popular tool for product delivery amongst many businesses. It’s also been one of the most important, as it’s allowed for a significant reduction in IT costs and generated greater working efficiencies for employees. So, what is cloud computing? Forbes define it as a series of web-connected servers and software that users access and use over the internet. Instead of information being stored on a local machine, like a computer or on-premise server, information is stored on a server somewhere around the globe with users able to access information from their computer via the internet. Many businesses have centered their product offerings around cloud computing because of the benefits it can offer. Businesses like Netflix, Microsoft, Amazon and Xero all offer either infrastructure as a service (IaaS), platform as a service (PaaS) or software as a service (SaaS) products to customers through the cloud.
What makes cloud computing so appealing? It's an affordable storage solution that eliminates the need to purchase, use, and maintain costly local servers. Forbes reported customers saved between 30 and 50 percent by switching to the cloud instead of opting for local server solutions. As an example, the airline Emirates expects to save $1 million USD annually once they retire their outdated hardware by switching to cloud. Software is also automatically updated and can handle surges in website traffic without requiring hardware improvements. COVID has upset traditional workplace settings, forcing employees to work from home. This dynamic has significantly accelerated business' willingness to pay for and adopt cloud solutions. Cloud-based technologies have helped create flexible work environments when they've been needed most and allowed for access to information stored on the cloud from anywhere. When speed and adaptability can mean the difference between achieving operational success or not, the agility provided by cloud computing software is significantly valuable. Especially now. Why? Failing to embrace cloud-based technological solutions isn't really a choice anymore. It‘s more a case of adapt or shut down!
COVID has proven to be a significant catalyst in generating digital transformation. In fact, digitalisation adoption rates have sky-rocketed with many industries being propelled into making changes that otherwise would've taken years. Businesses have adopted new technologies up to seven years earlier than they would previously have done before COVID. Some were implementing at rates of 20 to 25 times when compared to pre-COVID times.
“Digital transformation has been a priority of most governments and businesses for many years, and COVID-19 has amplified the need for it, as well as the impact of not doing it.” - McKinsey & Company (2020)
This need for speed has caused significant disruptions to the current traditional offerings available and brought along new unique threats. Cybersecurity issues have come to the forefront of discussion. Concerns regarding data security and the ease of which some devices can be hacked need addressing. Legal policies and Government regulations haven't followed us into this new digital era either. In Japan and the US, legal agreements, such as real estate conveyancing documents and court documents, still need to be submitted as a physical document. And although the way we work has changed, inadequate and non-existent policy changes have exposed the shortcomings of this rapid shift into the digital era.
Digitalisation will continue to play an increasingly important role in the future of business, but exactly what that future looks like, remains a tantalising mystery.
