Covid-19 has accelerated the shift towards digital transformation and technology enablement within businesses. It has also encouraged many corporates to look for suppliers who can provide outsourced services remotely, driving the increased need for virtual / technology delivered service offerings. There are clearly many business functions that cannot and should not be fully replaced with technology but they can, non-the-less, be greatly enhanced by it. This focus of becoming more streamlined and efficient has created a significant opportunity for tech-enabled businesses to make their mark in disrupting sectors.
Whilst we see many technology evangelists and media outlets pointing towards the growth around AI / Machine learning & Robotics, in reality, the majority of businesses across the world are still years behind being able to properly access these technologies internally. There is clearly still a way to go before companies can become truly "Fully Autonomous", excluding the debate about whether they should, with some sectors further behind that automation journey than others. For them, outsourcing services to tech-enabled businesses may be the most accessible way to leverage greater efficiencies and scalability from these newer technologies in the near term.
Whilst some robotic businesses have been highly sought after, many are still only able to perform repetitive tasks. Where there are more bespoke requirements, humans still have the edge in versatility, creativity, and ultimately the ability to provide a customer service touch point. Businesses offering tech-enabled services have an opportunity to package software and humans together to provide a blended solution that delivers the day-1 cost savings and efficiencies that companies look for; yet retains the element of control that we need in order to intervene when things are not going well or need more of a specialist lens to be applied. Tech-enabled services also provide a steppingstone in a company's digital transformation journey. By leveraging their own employees, in house sector expertise / IP and newer technologies they enable management teams to scale the number of customers they can serve without scaling costs, and importantly build the next generation of platforms to run their businesses, clearly giving them the competitive edge in their sectors.
It is interesting to start seeing the impact of this technology on our personal and business lives in terms of how much faster and more productive it can make us. Many of us have had time working from home over the past twelve months and Zoom / Teams calls have enabled many of us to work more effectively, yet it is the adoption of technology solutions to make our working days more efficient, that will perhaps have a longer shelf life, software tools such as:
- DocuSign / Monday.com for instance are having a big impact on day-to-day work processes across many industries and will help create that true paperless office;
- Chat bots & Automation process software tools created by the likes Microsoft (Power Apps), Amazon (Connect) and Twilio (Flex) are enabling businesses to ensure the right people are seeing the right information / speaking to the right individuals at the right time; and
- Redstor / Connectwise are enabling automated data management flows and patch management which is improving / streaming IT infrastructure processes.
Learnlight is a great example of a business that has enabled large multinationals to carry on providing training to their staff during the pandemic by serving them remotely. It is a tech enabled business that provides virtual and digital training through its own software platform to clients like Siemens, Deutsche Telecom, PWC and BMW. The general trend to Virtual / Digital remote provision of training has accelerated significantly off the back of the pandemic and is very unlikely to switch back.
During the past 12 months the vast majority of the businesses we have backed have been able to trade and service customers digitally / remotely and remain well positioned to expand quickly as we come out of this pandemic through both organic and acquisitive growth. This environment does lend itself to acquiring competitors or in some cases channel partners that you can absorb on to your existing technology platforms. Most of the businesses we have backed have acquired companies over the past six months and expanded their products and service offerings through their trading platforms.
At Beech Tree we have significant experience investing in technology and tech-enabled businesses. We are really interested in partnering with businesses using technology as an enabler to provide support services across the following markets: Data Solutions; Logistic / Supply Chain Technology; Energy Services / Software; Employee Benefit / Wellbeing Services; HealthTech; EdTech; Tech Driven BPO and Inspection & Monitoring Services.
For us, our biggest focus remains the continual assessment of both outward facing and internal systems in business, the latter being the area that usually suffers when investment is limited but likely has the biggest impact when scaling a company. By using technology to try to streamline the workflows you can ensure you get the most out of your workforce. Despite the pandemic and the corresponding downturn, finding great people remains the most difficult growth factor in every business we work with and therefore by using technology to enable employees to deliver what they do best, rather than loosing time on monotonous inefficient tasks has to be the way forward.
If businesses get this right, especially now, they will develop significant competitive advantages over the rest of their sector and will thrive as a result. We remain committed to backing and partnering with entrepreneurs that share this vision and remain committed to helping our business partner create great businesses.