One of the essential strategies in business is that you should never reveal all you know.
However, we hope in this and future articles to be able to share some useful thoughts on how businesses are emerging successfully from lockdown based on our experience of working with a wide range of clients.
It’s nearly always true that a crisis forces any organisation to find new ways of doing things – to reduce cost, cope with demand or improve productivity. One clear trend we are seeing is the greater use of digital technology and automation to perform mundane tasks that had been done by often over-qualified personnel.
Perhaps unsurprisingly those who have been most readily embracing digital transformation in recent months are either those who are already very tech savvy, such as fintech companies, where they see how further automation can give them a greater competitive edge, or those who have been hardest hit, such as the property rental and hospitality sectors.
For example, we have one hospitality client running 500 reconciliations a month on average prior to lockdown. When they head back to pre-COVID levels of work, those reconciliations will take a team of 30 people four days to process each month. Once automated, this will reduce to a total of two hours.
The benefit of these sort of moves is not just cost saving. By getting robots to do what humans had done before, you free up your talent to do what they are best at – growing the business. This has been particularly so during lockdown. Recently staff in reduced teams have had to become involved in dull, repetitive work that they had not signed up for. This was demoralising and did not make best use of their skills. Senior managers as well, including business owners, who, having had to furlough staff, have got involved in mundane processes, leaving them little time to focus on how to best make the business succeed. Automation frees them up to concentrate on what really matters.
Of course, some of this has got to happen anyway and those who do it early are going to have a competitive advantage. One of the key drivers for embracing automation is the introduction of HMRC’s Making Tax Digital initiative. This will, in time, require all taxpayers to file digitally rather than physically. Elements put on hold by HMRC during lockdown are coming back and VAT, already filing electronically, will be the first change to be a fully digital process. Those companies who are geared up to do this automatically will not only save themselves a huge amount of time but will also benefit from cash flow advantages as payments are made more quickly.
Crises such as this pandemic can and should serve as a wake-up call, a catalyst to make businesses more efficient and productive. Sometimes they happen at a time when those who respond in the right way gain a significant advantage for the future.
For those of us old enough to remember the Millennium Bug – a software error that many feared would cause computers to malfunction when we moved into the new millennium – you will recall government advertising campaigns terrifying businesses into upgrading their IT systems. Many did so. Even though when New Year’s Day 2000 had passed the bug was more of a damp squib, it did mean UK business had improved computer systems just as the internet was taking off and the Dot Com boom arrived.
We are about to see another such technological boost with the greater use of Artificial Intelligence to help businesses gain insights into their customers and find new markets and revenue streams. But only those who are now going through a process of digital transformation will benefit from the dramatic benefits AI will bring. AI can analyse almost everything if you let the bots do the basics.