Thursday, October 28, 2021

Technology and Small Businesses – A Viewpoint


                                                             
                       Technology and Small Businesses – A Viewpoint

SMBs (Small and Medium Businesses) are the backbone of any economy. They account for 50%+ of the GDP and 60%+ of employment. SMBs are characterized by low operational margins and resource struggles in terms of capital needs, skill-set, access to new markets among others. These issues have been compounded by the COVID 19 pandemic as it brought about many disruptions. As SMBs adjust to the new normal, they need to rethink the way they operate in terms of business models, organization structures, and growth trajectories.

In this context, perceiving ‘Information Technology (IT)’ as just another support function may stifle the growth and operations of an organization. It was often an afterthought for SMBs which helped find alternatives when paper or Excel did not suffice. Technology decisions were usually ad-hoc, with a myopic lens on specific needs rather than the bigger picture. The IT landscape is evolving and today technology can enable SMBs to leapfrog their growth orbits. In fact, SMBs that chose to go for a digital transformation have been able to weather the pandemic more resiliently.

When it comes to Information Technology, the following are 7 key guidelines to consider:
1.  Embrace Technology – IT has the potential to be a strong enabler and a growth driver for SMBs, beyond just bringing in operational efficiencies and cost benefits. SMBs need to include technology as an integral part of the overall business planning process.


2. Focus on the right talent – Previously, finding the right technology talent for SMBs was a challenge and seemed daunting. Now there are several possibilities that SMBs can leverage, to ensure the right expertise at the top for IT - e.g., VCIO or virtual CIO, fractional IT leaders (where one doesn’t pay for a full-time resource), SMB focused technology firms amongst others. Don’t be shy to ask your VCIO or CIO or Tech. partner what are you getting as rate of return on the IT spend. Top line and/or Bottom line.


3. Develop an IT roadmap and digital blueprint – Develop and 1-year, 3-year, and 5-year plan to ensure technology decisions incorporate the right long-term vision. It is imperative to let business priorities drive the technology decisions rather than adopting technology that is prevailing market trend.


4. Build solid technology architecture – Build the right IT foundation. Don’t bring together disparate systems or software. This will be addressed if the technology planning is done along with the overall business strategy and plan instead of individual departments approaching IT independently.


5Be laser-focused on execution – Execution must be a key focus to realize true value from technology investments. The key execution pillars should be:

a.     IT Strategy and Planning
b.     Architecture
c.   Processes
d.   Tools/Systems 
e.     Data Analytics/BI/Reporting


6.        Revisit your IT roadmap every 3-6 months Getting IT right is an iterative process that needs to adapt to ever-changing business needs as well as the overall market landscape.

7. Evaluate and adopt new technologies Don’t be afraid to assess cutting-edge technologies like artificial intelligence, machine learning, and augmented /virtual reality. These new-age technologies could make an exponential impact on the capabilities of smaller businesses. But be careful to not use these in silos and/or purely driven by the “coolness” factor.



If SMBs focus on the above 7 key things, they will be able to drive significant value from technology investments. As the world moves more and more digital, having the right technology is no longer an “IF”, but a “MUST-HAVE”.


As SMBs try to get Information Technology right, we looked at some key technology trends that will shape the IT landscape for SMBs in 2021 and beyond.


 1. Cloud-based technologies Cloud computing offers software, platforms, and infrastructure as a service with the pay-as-you-go model. It converts IT spends from Capex to Opex and hence enables SMBs to adopt world-class technologies at low cost. If you are an SMB and are not using the cloud, you need to explore this space.


2.    Automation – is the first step to a digital transformation. A Salesforce study found that businesses automating their processes are 1.6-times more likely to be growing rapidly than those that don’t. Process automation has evolved from automating repetitive back-office tasks to including front office functions (like sales and marketing). Irrespective of your level of automation, an audit of your business functions from an automation perspective, will surely help identify opportunities to increase efficiencies and reduce costs. This enables the team to devote its energies to value-creating activities like planning and innovation.


3.    Cyber Security & Resilience – With increasing exposure due to multiple entry points in digitized processes, cyber threats pose an imminent risk to SMBs. It is essential to ensure that your organization has a comprehensive cybersecurity plan – encompassing all your digital touchpoints across employees, vendors, customers, and any other partners.


4.    Virtual workspace enablement Multi-location and a remote employee base have become a permanent reality. SMBs are realizing this and making virtual environments a focus area. Employee motivation, engagement, and growth in a virtual setup are critical to driving employee productivity. Current business processes need to be revamped to address end-to-end employee management for in-office as well as virtual-office environments.


5.    Use of Social media – Social media has become the biggest platform for marketing and communication with all key stakeholders. SMBs need to tap into this to promote, gain mindshare and engage customers. Organic social media, which is often free or low cost, is a good starting point.


6.    Mobile Experience – Everything that a company offers will ultimately need to be Mobile enabled. Some companies are ahead of the curve and are already doing it while others are catching up. SMBs that can have a seamless mobile experience for their customers will the true winners in the long-term. Brand loyalty is an eroding concept in many categories and people easily shift to ‘ease of use’ as their preferred option.


We hope that the 7 guidelines and the 6 trends that have been explored, will provide key insights for SMBs as they get their IT mandate right.
Now, more than ever before, technology is creating an equal playing field for companies of all sizes. SMBs need to focus on positioning themselves to take advantage of this evolution.

Cybersecurity threats and SMBs

 

 




Cybersecurity threats and SMBs
 
Small and Medium-sized businesses are victims of 40%+ of cyberattacks today, and this number continues to increase. Yet for most SMBs, cybersecurity is unexplored terrain, with under 10% having any focus on cybersecurity. Why? Because they believe that SMBs are too small to warrant the attention of cyber miscreants. Hackers, on the other hand, are finding it tougher and tougher to attack larger companies due to the cyber fortresses they are building. Thus, they are increasingly turning their focus to SMBs.
 
The most common cyber threats that SMBs face are critical data leaks, unacceptable digital interface controls, Trojan horse attacks, duplicate payments, phishing, malware, ransomware, denial of service, etc. These can result in huge financial losses, business continuity disruptions, data losses, and so on. The ultimate result: bankruptcy and business closure.
 
SMBs must build a solid, yet cost-effective cybersecurity strategy. This may seem daunting at first. But following 3 key principles, will make the journey much easier: 1. Start simple; 2. Define goals; 3. Build a short, mid, and long term roadmap.
 
Below is a 5 point framework to consider:
 1. Protection: Appropriate safeguards to ensure protection of all systems, networks, and infrastructure. Consider using the COSO framework. Implement a monthly audit of all systems, networks, and infrastructure. User access must be restricted and documented. This allows for the breaches to be contained and easily detectable.
2. Detection: Strong monitoring and detecting capabilities to ensure events are identified in real-time. Studies indicate SMB breaches go undetected for weeks together and by then the damage is beyond repair. Implementing the right systems can auto-detect suspicious activities before they spread
3.  Response & Recovery (R&R): An agile response & recovery system is very important, especially in today’s remote employee workforce model. Delays in response and recovery could have a hugely detrimental impact on SMBs. A research study showed that 60% of small businesses shut down within six months of a cyber-attack. A clear response plan, with well-defined processes, clear roles and responsibilities, and an adequate communication plan are critical to R&R.
4.  Compliance: This area has become very important especially as more and more processes move fully online. For instance, the EU’s General Data Protection Regulation (GDPR) has several compliance requirements for data storage, breaches, and response plans. Staying compliant not only is mandatory but also will make your business stronger and less susceptible to threats. Digitizing all compliance with laws, regulations, and protocols is key
5. Build employee awareness: Unaware employees are highly vulnerable to threats such as phishing, and social engineering. Creating a well-informed cybersecurity culture is important. Even simple strategies such as following good password hygiene or making password refreshments a religion, will make a big difference.
In addition to the above, please consider our list of 10 points that may help in developing a cybersecurity plan for your SMB:
1. Build a baseline of all business-critical assets, information, data, and reports to identify your digital assets.
2.  Include your extended network of vendors, partners, customers, etc. in the above. All APIs must be encrypted.
3. Prioritize external-facing online systems e.g., eCommerce websites, vendor portals, etc. if applicable. Ensure that you install protective software.
4. Ensure all digital devices (like laptops, devices, phones) are in scope, especially given that several of us are working from home today.
5. Conduct a detailed audit/assessment to identify potential gaps & understand levels of severity.
6. Build a plan to address the gaps; use planning services/tools, like threat modeling to help you plan better.
7. Do not be constrained by lack of in-house expertise – work with partners who are experts in this space and can provide a complete range of security solutions.
8. Managed services are a great way for SMBs to resolve the skill gap issue. They are cost-effective with better, tried-and-tested solutions.
9. Continuous monitoring and regular testing of the cybersecurity setup is important. Very much like testing your home security system.
10. Execution of the plan is key. But remember this is not a one-time deal – the strategy and plan for cybersecurity needs continual evolution and should be a key agenda item in the business planning process.
 
If the above still feels intimidating, as a starting point, below are some simple things SMBs can do right away to improve their cybersecurity defense:
  • Password management: Refresh password every 30 days, prevent password sharing in emails and texts, introduce 2-factor authentication.
  • Lock your servers. Lock screens of desktops and laptops when away from them.
  • Separate your networks. Guest WiFi Network Company WiFi Database Server Network.
  • Use only authorized app stores.
  • Encrypt all emails with sensitive data.
 
For several of us, our first exposure to anything cyber were the early Terminator movies. Cyberdyne and Skynet became the topics of umpteen discussions. Most of these movies followed a similar plot the future is ugly and can't be fixed. So people are sent back in time to address it in the present (or their past), thus changing the future and making it better. And Schwarzenegger saves the day. Given that time travel isn’t possible, at least not yet, none of us will have the ability to go back in time and fix things. The good news is that there are things today that can help SMBs prevent an ugly future, especially when it comes to cyber safety.
 
Cybersecurity is not as expensive as it once was. Neither is it as intimidating as it was. It is easy to get started. Get an audit done and understand where you stand and what options you have to begin with. SMBs should make this a priority before it is too late.


Wednesday, October 20, 2021

Cryptocurrency. Yes or No?

 


Cryptocurrency. Yes, or no?

While the world sits and debates these pertinent questions about ‘Cryptocurrency’, this relatively newer kid on the block(chain) has grabbed a lot of attention for the right and the wrong reasons, both.

A little background about Cryptocurrency

Cryptocurrencies are ‘digital money’. Pretty much the same as credit cards, but hugely differing in regulatory controls and the way data is distributed. As against the data for credit cards which has a single centralized database, this is decentralized and shared across thousands of computers worldwide.

Popular Pro-vote: Cryptocurrency advocates believe that this technology will eventually replace traditional money like the US Dollar or the British Pound or the European EURO which are some of the currencies accepted globally.

The Staunch Supporters – Let’s hear from them

1.    The die-hard investor’s poster-boy-currency: This is one of the popular investment tools, those who invested in Bitcoin early on, made a lot of money. Bitcoin, skyrocketed in value over the past few years. The price of a single Bitcoin has even touched $63K+. The total value of all cryptocurrencies is estimated to be more than $2 trillion.

At the moment, cryptocurrencies are largely preferred as an investment tool like a stock or a commodity, and not as much to buy real things in the real world.

Anti-vote: They say that cryptocurrency has no intrinsic value and is better off as an investor’s delight than the regular currency we use every day.  

2.    Good for ‘large’ and ‘global’ transactions: Makes for a good currency when traveling or for transfer between different locations, especially for banks and organizations that deal in large transactions all the time.

 

3.    Go without intermediaries: Cryptocurrency transactions are without intermediaries making them far more efficient, faster, and cost less. A huge advantage over traditional currency.

Anti-perspectives on Cryptocurrency

Let’s discuss a few key ones here:

1.    Environmental impact: Energy expenditure, fossil fuels, CO2 emissions:

A lot of energy is used in mining cryptocurrencies. The Bitcoin network requires as much energy as the entire country of Argentina, in one year (!) -- ~121 Terawatt-hours of electricity every year, as per BBC. According to Dichotomist, a cryptocurrency analytics site, Ethereum (another Cryptocurrency) uses as much power as the entire nation of Qatar. Moreover, 65% of this energy is used by the miners in China, which comes from ‘coal’ as China still relies on ‘coal’ for a sizeable part of its energy requirements. This in turn increases the carbon footprint, placing the environment in jeopardy.

The next question to pop – ‘Why does cryptocurrency require so much energy’?

Here’s the answer: These abominable costs typically arise out of proof-of-work type of blockchains, such as Bitcoin and Ethereum. These use a decentralized network of miners to store account balances, further made important to miners by block rewards. They require specialized computers to record new blocks, which can only be created by solving cryptographic puzzles. These computations require huge amounts of energy.

Cryptocurrencies without mining do not require as much energy

A large number of other cryptocurrencies have negligible environmental consequences. For example, proof-of-stake blockchains like EOS and Cardano do not have mining, which entirely negates the need for high energy requirements. This means transactions can be processed with the same energy requirements as any normal computer network. Ethereum’s plans of upgrading to proof-of-stake have been pulled down time and again by miners, who stand to benefit from its current way of working.

2.    E-waste: The second stumbling block in the adoption of Cryptocurrency is the e-waste generated by cryptocurrency mining. This happens as the hardware used in mining becomes obsolete. The bitcoin network is said to generate 11.5 kilotons of e-waste every year! Unlike other computer hardware, these circuits cannot be reused for any other purpose, and become obsolete faster.

Ready to stay and slay?

Love it or hate it, Cryptocurrency has made its way into our lives stealthily, if you please. As a potential gold mine, there are the optimists and opportunists and the habitual investors looking for a rich harvest, who give Crypto a thumbs-up. Some choose to go against the new wave, saying it is more likely to cause more harm than benefit to humankind. A case in point was Elon Musk retracting his decision of allowing people to pay by Bitcoin for Tesla cars.

Each of us will need to decide for ourselves if crypto is here to stay. We, at Techvio, believe that crypto and blockchain are the future. The idea of a global virtual currency, protected from FX fluctuations or hedged against inflation, is indeed an interesting one. The challenge that crypto is facing in terms of energy usage, or intangibility will soon fade away. Every new technology such as eCommerce, credit cards, AI, AR, etc has always had skeptics, but they have thrived. We believe the same thing will happen with crypto. It will become mainstream in the next 3-5 years and will no longer just be a vehicle for people to make a quick buck. This is here to stay.

The views expressed here are solely of the writer Vijaya Rao.

References:

https://time.com/nextadvisor/investing/cryptocurrency/what-is-cryptocurrency/

https://www.investopedia.com/tech/how-does-bitcoin-mining-work/

https://www.investopedia.com/tech/whats-environmental-impact-cryptocurrency/

https://fortune.com/2021/05/13/musk-bitcoin-mining-bad-planet-heres-how-bad/

https://news.yahoo.com/are-cryptocurrencies-ready-to-go-mainstream-190224417.html

 


Technology and Small Businesses – A Viewpoint

                                                                                       Technology and Small Businesses – A Viewpoint SMBs (S...