Bill Gates once said, “We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten”. While I strongly agree with the sentiment, “always” is a dangerous word.
This pandemic induced global working from home experiment has rapidly accelerated the adoption of digital technology all around the world, and Australia is no different. A recent study by Accenture owned AlphaBeta has found that Australian businesses have implemented as much new technology in the last year as they had in the prior ten years. This step-change in technology transformations is both a threat and a tremendous opportunity for incumbent Australian B2B software businesses.
Whilst collaboration tools such as videoconferencing, file sharing, and eSignature software have been obvious winners in the “work from home” movement; the opportunities are significantly more-wide ranging. Businesses have, and continue to be, more willing to invest in digitising their front office, such as increase web presence and functionality.
An overnight shift from working outside of the office by exception to 100% of the time has required most firms to significantly improve IT security to protect company data and networks.
Even relatively mundane back-office functions such as accounts and payroll have seen a dramatic spike in the adoption of cloud-based offerings that better serve remote workers than legacy solutions. AlphaBeta found that the use of digital payroll processes by Australian firms has increased from 65% to 73% in the last year. This eight percentage point increase represents more adoption than the prior ten years combined.
This trend cuts across industry vehicles and firm size. The resulting changes are likely to endure as digitally savvy businesses have been rewarded with greater resilience, and less digitally savvy businesses learned lessons about their ability to work flexibly. The AlphaBeta report found digitally advanced firms were 16 percentage points more likely to have an increase in revenue and 15 percentage points more likely to have an increase in employment through the pandemic.
To quote another great thinker, Ben Franklin, “out of adversity comes opportunity”. Great software companies solve customer problems. Australian B2B software companies should not only be asking themselves how they refine their own Business Continuity Plan procedures to maintain operations through COVID-19 but how they improve their products and services to help their customers thrive in this new environment. This might mean reconsidering their product roadmap or pulling the trigger on their long-debated cloud migration from on-premise software.
B2B software often benefits from the undeniably attractive characteristic of annuity-style recurring revenue due to its “sticky” nature and technology entanglement. However, failure to make changes and investment to optimise for the post-pandemic world may prove to be a dangerous omission by incumbent B2B software companies. In a rapidly shifting landscape users and purchasers of B2B software will be continually assessing the appropriateness of their technology stake components.
We’ve seen many examples of accelerated innovation within our portfolio of technology businesses in response to the pandemic. One recent example was at Micromine, a provider of mining software solutions. The team recently completed a fully remote implementation of their Pitram product at a Greek gold mine. Pitram is a mining control solution that records data related to equipment, personnel and materials, providing an overall view of current mine status. Given the technical complexity and hardware installation required, it is typically deployed and configured by a team of specialists onsite. However, in response to the miner’s need to limit access to their mining sites, the Micromine team completed product enhancements and developed supporting online material to empower the miner to implement the hardware, with configuration support provided remotely. You can read more about this on Micromine’s website.
At Potentia we see tremendous opportunity ahead for Australian B2B software companies, including those in our portfolio making exciting investments to deliver even more value to their customers, and those we are yet to meet.