The global economy has undergone a series of crisis in the past decade. In the past year (2020) alone, there were reports of market liquidity crises, the stock market crush, the unprecedented number of companies that were liquidated, alongside the laying off of millions of workers and the global economic recession which were direct result of the COVID 19 pandemic. It is no secret that, COVID-19 wreaked havoc on the globe. The globe was dealt a big blow indeed but it is recovering at a steady pace. It is safe to say that, none of these crises have been able to completely shut the globe down.
There have been multiple adaptation and evolution processes to better position the globe to serve the best interest of its occupants; predominantly, the human race. Through the evolution and adaptation processes, individuals, families, businesses and other like bodies have been challenged to rise above the crisis and develop systems to unravel and address problems which may have arisen. The evolution of the world may not necessarily be limited to how the world itself has physically transitioned over the years; it also includes, the economic transformation that the world has experienced in making human life better.
Extraordinary economic change is happening at an increasingly fast pace globally. Its impact is being felt across all types of industries and service sectors. The global economic landscape has changed drastically over the last few decades with technology being the catalyst for this change.
Business sustainability and continuity is now heavily dependent on the ability of businesses to invest in knowledge and infrastructure which are able to deliver result in real time. Every field of business, be it accounting, engineering, medicine, law or agriculture is feeling the transformational wind that the digital revolution is blowing on the business environment.
The right investment in digital technology and the efficient use of it is bound to help businesses achieve strategic, business-driven competitive advantages in improving current processes and also creating a new way of working that delivers the opportunity for repeated gains across many different business models.
Businesses that fail to keep pace with the fast-moving technological space risk losing out and becoming irrelevant or possibly extinct. Technology has therefore become a major driving force in the global business environment.
Digital technology has become the frontline global economic transformational asset within the broader technological space and is providing unparalleled opportunities for businesses as it creates the necessary linkages and advantages which helps business to elevate their performance and capabilities.
In this digital world, we have all become more connected. One cannot help but agree with Thomas L. Friedman when he mentioned that the flattening of the world happened at the dawn of the 21st Century. It has become easier to interact with others across within a split second; creating an interestingly volatile environment.
In an increasingly volatile yet complex environment, it is crucial that organisations have high quality decision-making capabilities if they are to be among the successful sustainable businesses of the future. Business decisions should therefore be driven by technology. Businesses are thus required to leverage on the global perspectives, diversity and knowledge that digital technology offers to provide a very meaningful guide to those charged with governance whose decisions significantly impact financial reporting, operations, governance and risk.
The 21st Century has presented us a new world, where businesses cannot possibly expect real results, whilst relying on old methods of operation. Just because a strategy worked a decade ago does not suggest, it would work today. Businesses must review their strategies and approach on a continuous basis to ensure progressiveness through digital inclusiveness.
In most Ghanaian businesses, those charged with governance are usually above 60 and are classified as “Born Before Computer (BBC).” Even though some of them have been able to bring themselves up to speed with the current global trend of digitization, most of them are still living with “analogue mindsets” and are not open to new ideas. You are likely to hear them say, “We did that in the 80’s and it worked. Let’s replicate it! This has been our culture and tradition. Let’s stick to that! We are used to doing things this way. We can’t change it!”
We need to understand that every generation comes with its own ideas and modus operandi. As a matter of absolute urgency and necessity, we must put the new wine in new wineskins (Mark 2:22). This does not suggest that businesses, should cut themselves off from their past; rather, they must evaluate their past and use their findings as basis for securing a more prominent future within the digital space. We have rolled over to a new world and businesses need to be very progressive in their respective strategies to stay relevant. Digitization is, indeed, the code for business sustainability!
In recent months, the impact of digital technology has been strongly felt due to the Covid-19 pandemic. Businesses have had to undergo aggressive global economic evolution by strategically positioning themselves to explore exponentially ways they offer their product or services in an expedited manner in other to meet the growing and changing needs of their consumers. It has become undoubtedly clear that businesses that would be able to thrive amidst the global pandemic are those businesses which operate in technologically enabled environments.
The internet as the bedrock of digitization
Without a shadow of doubt, it is clear that, the internet is the bedrock of digitization and data is the power hub of the said digitization. The definition of digitization in this context, covers the broader implication of digital technology on businesses and not just the technical process by which information is converted from analog to digital formats. The internet has also been a great booster to the rapid digital transformation happening all around the world. It is the global platform for trade, marketing, research, education, socialization and many other economic ventures.
The internet as a global platform for marketing and trade
The internet is a valuable tool for business and the largest contributor to the global market presently. It has also has reduced trade cost and stimulated growth. Access to the internet and cross border data flow offers huge opportunities to businesses especially Small and Medium-scale Enterprises. In no time, by reason of their use of the internet, these enterprises have grown to become active participants of the global economy. Businesses are to leverage on the internet to gather market intelligence and knowledge spill and harness such to develop innovative and customer focused products to serve its market segment and achieve global competitiveness.
The internet has also facilitated the processing of international payments. The internet has made it possible to procure or deliver a wide range of digital products online. Several e-commerce platforms have been birthed through the use of the internet; some of which are Amazon, Jumia, OLX, and social media platforms, making it possible to procure several varieties and variations of digital products. Millions of dollars are made through the use of e-commerce platforms, social media platforms and other digital mediums. Numerous trade activities are carried out on the internet.
According to the 2019 digital economy report issued by the United Nations Conference on Trade and Development, the global value of e-commerce was estimated to have reached $29trillion in 2017 which was equivalent to 36% of the world’s GDP as at 2017. Again, it was estimated that 1.3 billion people, which represents one quarter of the world’s population aged 15 years and older, shopped online. This presents a huge opportunity for businesses to explore.
The internet as a global platform for business meetings and social gatherings.
The recent reduction of physical meetings to virtual meetings with the use of some applications such as Zoom, Skype, Slack, Google Hangouts, Microsoft Teams and Facetime, just to mention a few have been a transformational force in the global business environment and have sent a signal to the global economy that, business do not necessarily require huge office complexes to operate effectively but also strong internet connectivity and the required digital technology. Now, more than ever, there is a need for businesses to invest in digital technology for sustainable growth.
One advantage of virtual meetings is that, it offers businesses the opportunity to operate at a reduced cost with regards to time, stress, and finances. Monies which would have been spent on physical meetings, is neatly stashed away for other purposes. People can attend multiple meetings within a very short time, thanks to the numerous platforms which facilitate meetings online. Costs associated with time and resources needed in travelling from one office to the other for long meetings have been reduced.
The stress and time cost resulting from traffic, lateness and staying in long queues have completely been taken away. Businesses are opting for virtual meetings rather than physical meetings due to the huge cost savings it yields. It is therefore becoming unwise for businesses to invest in physical assets such as office buildings, complexes and conference halls, without doing proper assessment of the real impact of these investments on the business especially in this era of digitization and rapid technological advancement.
There is therefore the urgent need for businesses to appropriately consider and review their capital expenditure models. Business are to explore opportunities to create models that support the use of virtual platforms as a great compliment and in some cases a suitable substitute to many known capital intensive physical assets.
Millions of social activities are taking place just by the tapping of a button or two on devices, which directly connect people to the internet. In fact, social activities that were hitherto attended in-person have been successfully held online without any hitch or glitch. Religious gatherings, funeral services, marriage ceremonies, rallies and even political demonstrations held in recent times, over the internet, testify to this fact. This has been of immense benefit, not only to businesses and institutions but to the populace at large who have been able to further fatten their savings.
The internet as a global platform for education and research.
The 21st century is indeed an era of accelerated acquisition, merger and spreading of ideas. The speed at which signals are identified, quantified, tracked, analyzed and valued through the use of the internet has greatly contributed to the evolution of the global economy. So great is the spread of information by use of the internet that, one may easily feel “imprisoned” by the mere fact that one does not have access to the internet and its related advantages and opportunities.
Gone are the days when people had to visit libraries and search through scores of books endlessly to aid their quest for knowledge or information for the purposes of research. Thanks to the internet, virtual content of every kind is readily available on the internet. Today, it would be difficult to confide the meaning of a library to a room full of books on shelves. On the contrary, the definition of a library would not be complete in this modern era without making mention of resources found on smart phones, laptops and other digital devices. Building physical structures such as libraries to house books may gradually become outdated and institutions therefore need to explore the use of digital platforms in aiding teaching and research.
How do businesses position themselves to remain relevant in this new dispensation?
The need for digital presence: Every thriving business feeds on generating and sustaining engagements with consumers and potential consumers. In recent years, it has become very convenient for consumers to find what they really need using the internet. Consumers search for various products online through a wide variety of social media platforms, websites and other digital mediums. If consumers cannot find a business brand when they search online, then the reliability of the product and even the legitimacy of the business may be questioned. Businesses are therefore required to have effective online strategies to generate and sustain engagement with their consumers and assure them of credibility.
Digital presence provides an opportunity for businesses to expand their market segment through consistent communication with consumers on a global scale. A digital presence also creates an increased brand awareness as it enables businesses to set the narrative as to who they are, what they stand for and the uniqueness of their product.
The 21st century has gifted us with a digital age and therefore having physical structures as evidence of existence may not be of much use anymore. Businesses need to integrate digital presence into their marketing strategies so as to stay relevant. Businesses may need to think of creating a professional and user-friendly website loaded with accurate, concise, valid and timely information for consumers to access their respective brands and products. In addition to having a website, businesses may also need to make use of social media platforms taking into consideration the platform that may best support their brand. A good social media strategy will therefore be required to ensure a strong social media presence.
Consumers should not walk into offices and join long queues, just to make enquiries. They should be able to find all the necessary information, relevant to make decision by pressing a button or two. Consumers should receive prompt feedback whenever they go on business websites or social media platforms to seek some clarifications. Business must be conscious of the fact that consumers are not doing business with them because they have imposing structures; rather, customers have made a decision to transact with them based on the ability of the said business to offer quality products promptly and conveniently.
Integration of digital processes into operations: Businesses must begin to integrate digitization into their processes. For example, printing of memos may be substituted with the option of sending an email or any like means which may serve the purpose. Such actions will significantly reduce the cost of printing and stationary and enhance the profitability and the financial position of the firm. Businesses must begin to access the best ways of serving their customers better with the highest quality product by employing the use of artificial intelligence and business automation in gathering information and delivering real results.
The argument against automation is that, the wider the use of automation, the higher the number of unemployed persons. But this could be argued that human beings created in the image and likeness of God were not created to limit their thinking to only sweeping huge offices with brooms, distilling gutters with shovels or mopping the floor with rags or doing other mechanical jobs. Sometimes circumstances beyond their control offers them such limited options. It behooves on us as society to train and retrain such people within the digital environment and offer them the needed opportunities to reach their full potential within the technological space.
Gone are the days where accountants carried big ledger books from office to office and auditors collected and photocopied invoices as audit evidence. With the invention of accounting software, accountants have moved away from book keeping to employing high level analytical skills in developing financial strategies to minimize cost and maximize gains. Big data analytics, the use of financial models and artificial intelligence have become an all-important part of the accounting profession.
Lastly, businesses must be security conscious as digitization comes along with its own risks: Despite the fact that digital technology offers a great advantage to businesses, it may also pose a huget threat to a business if its risks are not properly monitored. Businesses may face cyber risk, system and operation failure, data leakage and privacy issues. Therefore, proper evaluation of risk needs must be carried out, documented and monitored, regularly. Businesses must also ensure that any digital technology being used is properly secured in terms of access and physical security. In order to ensure that the digital space of a business is secured, comprehensive risk management strategy must be implemented.
Nobody ever thought the digital age would creep in on us so fast that, ignorance of its nuances could lead to the death of otherwise thriving businesses. We are in the 21st century. It is an era where the binary digits are kings. Let us embrace digital technology for sustainable growth and continuity.
Frank is a Chartered Accountant. He is a member of the Institute of Chartered Accountants (Ghana), Chartered Institute of Management Accountants (UK), Chartered Global Investment Analysts Institute (USA), Chartered Institute of Taxation (Ghana) and the Institute of Internal Auditors (Ghana).