This blog post is part of the Greater Birmingham Chambers of Commerce’s Invest to Grow campaign. Invest to Grow aims to inspire and inform businesses around investment in R&D, innovation, technology and machinery and how it can help boost productivity through case studies, expert opinion pieces and briefing information. Click here to find out more and don’t forget to join the conversation on social media with #I2G18. Part 2 of Invest to Grow focuses on investment in technology and machinery and is sponsored by MCS Corporate.
A century ago the Industrial Revolution transformed the UK from an agrarian society to a nation powered by cogs, engines and steam. Now businesses are in the middle of an even greater revolution – one that’s fuelled by digital technology.
Innovations have emerged at a dizzying pace. Few outside Silicon Valley could have predicted their arrival. Big Data, Cloud Computing, The Internet of Things, Robotics and Artificial Intelligence were not widely understood or adopted a decade ago. Now they are quickly becoming a critical part of a business leader’s vocabulary.
These digital developments have the potential to transform UK businesses, helping firms become more efficient and productive. Yet few will realise these opportunities as outdated systems and working practices become roadblocks to change. If firms are to move forward, they must first transform their existing operational processes.
Beyond the hype… What technologies should you be aware of?
Where there is technology, there is also hype! However, there are a number of technologies that are consistently grabbing the headlines and also being successfully utilised that businesses should be aware of:
IT software and services run over the internet instead of through computer hardware. This can enable firms to become more efficient and nimble. These systems are scalable so can support fast business growth and they can also underpin quicker and easier entry into new markets. Their accessibility can enable more effective collaboration with both customers and suppliers.
Digitally enabled processes create torrents of data, offering transformational insights for those that can manage and analyse it. For those that can exploit it, this gives unprecedented opportunities for finance teams to accurately track, predict and influence business performance. It can also assist executive and board level teams to make better and more confident decisions.
Machines are becoming smarter. Production-line robots are not particularly new but the development of smart software bots means that businesses can now automate repetitive tasks in the back-office as well as on the factory floor, allowing their teams to focus on value-adding activities.
Sensors on devices collect and share real-time data. These insights help firms kick-start productivity and reduce downtime. Inventory can be tracked in real-time to optimise supply chains. Production line equipment can provide data to proactively target when preventive and reactive maintenance is required.
What’s stopping businesses from benefiting from digital technologies?
There are a number of key reasons that we commonly see that hold businesses back from realising significant benefits:
A weak or missing IT strategy
Digital success needs strong leadership and joined-up effort across the business. Yet few businesses have an IT strategy that sets out their vision for the future, and how they plan to get there. Without this, firms will struggle to back the right technologies.
A poor change culture
Few businesses realise expected returns on their technology investments. A poor change culture is often to blame: digital updates are regularly seen as IT projects rather than business transformation programmes. Integration suffers and untrained employees quickly find workaround solutions.
A skills deficit
A little knowledge can be a dangerous thing when it comes to digital innovation. Without specialist IT know-how, firms get caught in the hype of each new technology. Few consider whether the next big thing is right for their business or whether other projects could deliver the same benefits.
Poor risk management
Middle market businesses regularly overlook digital risks. Many fail to assess the competitive disadvantage of not innovating. Others lack an up-to-date cybercrime policy to respond to emerging threats. Adopting new technologies without mitigating risks leaves end-to-end operations significantly exposed.
Clumsy digital architecture
New software and hardware is haphazardly bolted on to legacy systems, creating complex infrastructure that is difficult and expensive to maintain. As the digital architecture becomes increasingly bespoke, it becomes ever-harder to integrate new technologies and systems.
The digital age is dawning and whilst so much is different, many of the key principles for success remain the same i.e.
- Set a clear strategy
- Invest in developing a good culture
- Hire / develop the right people
- Experiment and get started
- Manage their risks
- Take a long-term view
RSM is a leading provider of audit, tax and consulting services to middle market leaders, globally.
With around 3,500 partners and staff in the UK and access to more than 43,000 people in over 120 countries across the RSM network, we can meet our clients’ needs wherever in the world they operate.
As an integrated team, we share skills, insight and resources, as well as a client-centric, collaborative approach that’s based on a deep understanding of our clients’ businesses. This is how we empower you to move forward with confidence and realise your full potential. This is the power of being understood.
Director, Finance Consulting