HOW it will affect your business
Once again, a new year is upon us. With a new year comes the opportunity to wipe the slate clean, learn from the past and set new goals – both personal and business goals.
Business goals tend to follow a familiar path year after year – grow sales, expense reduction, etc. The more difficult aspect of these goals is “how.” Setting a revenue goal of 30% more than last year is the easy part. But how does the business achieve this goal? Especially in an economy that has been slow to grow in the past few years.
When it comes to reducing costs, there are fuel costs, people costs and other business expenses that can be scrutinized but if your goal is to increase profitability by reducing costs then the question of ‘how’ comes up once again. Very often cutting costs can result in a corresponding cut in revenues which defeats the purpose. The best, most proven way to do more with less is through automation and improving both automated and manual processes.
It seems like every few years (or less) new trends in ‘how’ appear and the latest new trend is called ‘Digital Transformation’. If you’re a larger operator or part of a larger business, then you’re already aware of this and if you’re a smaller company or don’t follow technology trends this will be a new term.
Despite some of the hype, Digital Transformation is real and is about the ‘how’. How can I increase my bottom line without cutting costs that are directly tied to revenue? Like most technology trends, the theory is good but if the execution fails then it can do more harm than good.
Think of the transition from the semi-automated to the fully automated engine room – but apply that to your business operations. There will be some upfront cost, but if executed properly the return on investment should happen very quickly.
Some of the components of Digital Transformation are:
IoT (internet of things). Probably the most well known use of this technology is the Ring doorbell system. Where a device on your doorbell has a camera, microphone and a speaker and it allows the consumer to view and speak to someone at their door through a smartphone app. An example of this is the capturing of sensor data attached to vessel equipment and using that data to assist with maintenance decisions.
Blockchain. This is the technology that supports Bitcoin but please don’t confuse it with Bitcoin. Blockchain is widely used in the financial sector to validate contracts. Could this technology be used to validate and automate customer orders in the near future?
Machine Learning. This is the ability to use historical and current data to make predictions.
Artificial Intelligence. Not as scary as it sounds – at least not yet. In theory, if done right, artificial intelligence is the last invention mankind will make.
All of this can seem daunting and in some cases it is, but remember that none of this technology or Digital Transformation is of any value unless it can help your business bottom line.
At MarineCFO, our mission is to provide technology thought leadership, so we feel it is important to explain how Digital Transformation can and will affect your business over the next few years. To that end, we will be releasing several articles and publishing webinars over the next several months to explain what Digital Transformation is and how it can affect your business.