Digital transformation as an antidote for a cooling economy
Yesterday, at the Slovenian Business Club (SBC) headquarters, we met with members of the club and debated the topic "How to take advantage of the current market situation".
The aim of the event was to present useful tips for monitoring and responding to the dynamics of the international environment and markets. The international situation is uncertain, in addition to the dynamic balance of power, high inflation and interest rates are showing their teeth. Companies also must adapt in their supply flows and search for new markets.
Participants had the opportunity to hear from those who have a professional interest in monitoring markets and the economy, as well as from those who speak from business practice (SBC members). Present at the panel were the following:
- Dr. Anže Burger - economist, researcher and lecturer at the Faculty of Social Sciences: An outline of the Slovenian and international market situation,
- Metka Marovt and Tomaž Marovt - Marovt Group (partner of the most established car brands), SBC members: German car market developments,
- Sandi Markon – Stroka Business Group, SBC member: The solution lies in digitising processes,
- Ajda Sibinčič - Firstclass, SBC member: Human resources are key,
- Peter Kumer - Enertec, SBC member: New electricity billing system is coming, right information is key.
Dr. Anže Burger highlighted the following factors as a hedge against inflation:
- preserving the value of liquid assets
- better expenditure planning and flexibility
- careful recruitment with the best possible staff
- optimising the supply chain by avoiding excessive cost growth
- stable and cheaper sources of financing
Metka Marovt and Tomaž Marovt explained that in the future it will be necessary to adapt even more to the market conditions, adding, that for the time being their company is not feeling the impact of the crisis too strongly. They highlighted the company's vision to diversify its markets, as before the Corona crisis, the company had already focused on the aeronautics and medicine. This has reduced the possible impact of the situation in the automotive industry on the company, which is uncertain after the year of 2035.
Peter Kumer focused his presentation on the price growth of the electric power industry, the stabilisation of prices after the crisis and the forecast of price reductions over the next five years.
Ajda Sibinčič gave an insight into the current employment situation in Slovenia and the so-called silent redundancies. She stressed that companies should recruit people who have a high level of expertise, a high level of motivation and who are able to fit into the company culture.
Remedy for the upcoming crises
"Digital transformation is a good precaution against the crisis we are facing and is a very important tool for implementing measures against the crisis, because this is only possible if we are well digitised. Certain crises that have already happened could have been stopped or prevented by digitisation. A good example is the Corona crisis, which could have been stopped earlier by working from home, and the same applies to the fires in the Slovenian Karst," said Sandi Markon.
The Stroka Business Group started with digital transformation in 2015. One of the first major projects in this area was carried out at the Marovt company, where the main idea was to equip old machines that were still mechanically faultless with "brains" and thus reduce the company's costs. We equipped the machines with sensors and algorithms, and then transferred this data to servers and business systems to give them "brain".
Today, we are facing a slightly different change in digital transformation - artificial intelligence - which is imminent and brings huge opportunities. We could say that potentially it might be a good remedy for the upcoming crises.
Concrete solutions for different crises
Sensorics and IoT are certainly among the better measures in Markon's view, as they make it possible to obtain specific data instantly. A good potential use of sensorics could potentially be the fire zones in Slovenia. We all remember the large-scale fires in the Karst region. If the temperatures in the fire zones were monitored using sensors, the worst consequences could have been avoided. This is basically a very low-cost measure that could be implemented immediately through a national or economic initiative. He believes that there are many more such examples.
Using concrete examples, Sandi Markon also highlighted the importance of new ways of learning that help companies to optimise processes, reduce costs, speed up work and multiply knowledge:
- Remote assist: knowledge multiplication in times of shortage of subject-matter experts, difficult logistics and cost optimisation. It makes sense to carry out certain training courses remotely or to help repair a particular machine remotely. In this case, a top expert, who stays on-site, uses augmented reality glasses (e.g. Microsoft HoloLens) to guide or direct an employee or a less experienced expert at the customer's site to solve the problem on the machine together. There is no time wasted and the expert is able to solve more problems than if they had travelled. Everyone in the chain gains valuable knowledge, all steps are documented and a knowledge archive is built.
- New ways to use AI: the AI expert content accelerator platform allows building a diverse knowledge database of expert-useful content without IT expertise, while offering constant updating of the database based on user feedback. The innovation drastically reduces the development and maintenance time of the systems in order to allow rapid monetisation and (self-)learning upgrading. On the one hand, we are talking about the increasing accessibility and outstanding utility value of artificial intelligence (AI) tools, and on the other hand, the need for practical tools that can enable and accelerate the building of a broad knowledge base and marketability for professionals in different fields.
Sandi Markon highlighted the transformation of workplaces through AI as a good example of how to optimise resources and time in the company: "In our company, we often use AI tools for various processes. Especially when it allows us to optimise time, so that employees can focus on the right content."
He gave an example of preparing a complex offer. It was a bid for an area where we had no specific experience, which meant that we would spend at least 3-4 weeks on preparing the offer. We used AI to create the offer in 2 days and allowed the experts to focus on the actual content. At the same time, we can conclude from this example that the jobs of bid maintainers could be transformed because the tool already allows us to do so.
He went on to highlight the so-called low-code to no-code systems, which, based on artificial intelligence, allow fast and highly efficient programming, which means that we can involve other expert staff using them instead of programmers. In the Stroka Business Group, these are mainly physicists and mathematicians, who can use their theoretical knowledge to build high-quality applications.
He also presented an example of the use of artificial intelligence by an American company with which they are working. The company uses AI and machine learning to monitor trends in specific industries on a daily or monthly basis and uses this to make a prediction of their sales for the next year. They monitor a huge number of industries that humans cannot do on their own, and from that they get predictions about what will happen to their industry in the future.
The quality of digitalisation
"Many large companies have too much data that they cannot use effectively enough to extract useful and insightful information. Therefore, when digitising, it is also important to check which data sources the tool connects to and whether these data sources are useful or need to be normalised. Individual systems are well connected to each other, but there are no good data links between them, which are crucial for further analysis and change," added Sandi Markon.
He also points out that companies are often not ready for all the changes of digital transformation because they do not realise that it is not just a technical change, but a whole new world. It requires a change in the whole culture of the company and in the way people think. Companies need to change mentally and culturally to embrace digital transformation.