Amidst the Covid-19 pandemic, many small and medium enterprises (SMEs) have been forced to digitise much of their business processes to stay competitive and relevant in this new market environment, almost overnight.
However, implementing too many digitisation measures within a short period of time can result in a unique business problem called "technical debt," warns Zakir Ahmed, Kofax senior vice president and general manager for Asia-Pacific and Japan.
"There are plenty of companies providing digital solutions centred around many areas of your business, whether it's through robotic process automation (RPA), invoice processing, or customer relationship management (CRM)," says Zakir.
"Technical debt is when you, as an organisation, undertake the effort of solving a business problem in your organisation, but end up subscribing to a number of these different solutions. Many of these solutions operate autonomously or independently, at a very high cost individually."
Zakir explains that many SMEs may not realise that maintaining these automated systems can be very costly and require a certain level of technical sophistication. Even if the company is able to integrate these solutions, the combined solution is unique and applicable to that one company, and can be challenging to replicate in other businesses.
"There are companies that are now held hostage in an environment that doesn't allow them to manoeuvre freely because it has invested so much into these automated operations that are complex, but do not allow flexibility," he adds.
Zakir explains that technical debt is especially prevalent in a Covid-19 environment, where companies need to be much more agile and make changes to the systems quickly. This will be difficult if the digital solutions are poorly integrated and do not communicate with each other.
SMEs are also hit with a double whammy, as they slowly realise that they no longer have the option not to be digitalised. On the contrary, businesses are forced to accelerate this change to ensure that they are resilient enough to live through the current Covid-19 crisis and future catastrophic events.
Thus, technical debt has pushed many SMEs to consider a single vendor approach, where they provide pre-integrated solutions that are able to streamline as many of the business processes as possible in multiple areas of the business, as opposed to a regular piecemeal solution.
"Customers are now looking for a portfolio of solutions that a vendor can provide because they know they don't have the resources or time to integrate them," says Zakir.
"The conversations that we're seeing more recently with SMEs and mid-sized companies, are about our other related products because they have multiple other issues to solve. They are no longer looking for solution providers that just provide one solution."
Zakir says solution providers are in the same boat as they are required to be more flexible and agile in order to succeed in this new market landscape. He foresees consolidations happening within the market, where niche solution providers will either be acquired or forced to position themselves alongside larger solution providers to provide a more comprehensive solution.
Tips and tricks
Technical debt has not dissuaded companies from undertaking digitisation measures, Zakir points out. It has merely slowed down the adoption process.
"For companies who are starting on a digital transformation journey, it is best to start solving an immediate problem, before moving on to the next one. We advise organisations to start small as opposed to a 'big bang' approach because you can showcase the success and build on that success," says Zakir.
"Equally as important, is to identify transformation opportunities. Many businesses don't know which key business processes will really make a difference once automated. So it is important to discover areas that need efficiency, and assign the proper dollars to automate them to get the maximum operational efficiency."
Zakir also points out that companies need to be prepared to realign their workforce because automating human tasks will free up additional human talent, which the company can use to support other areas of the core business.
It is also important to involve many different departments within the digitisation process, so that the management team will have greater visibility of how the automated systems are performing, and verify if the solution is producing the desired effect.
"Ultimately, you're creating a digital worker, and you have to make sure that you are managing and monitoring it to generate long term success. Digitisation is an ongoing journey, not a three to six-month one. Companies that we see successfully doing this are those that continually invest in automation across a long period of time," says Zakir.