Vodafone brings digitalization closer to SMEs

Consumer behaviour has changed dramatically as a result of the pandemic. While shopping at the store used to be the norm, today stores are rather empty of customers and sometimes even of products due to the exponential growth of online commerce. This change has forced all companies, and not just those in retail, to find ways to rapidly digitalize in order to boost efficiency and productivity. Vodafone Romania is one of the tech companies providing digital solutions for businesses, having been at the forefront of these changes. Business Review talked to Mihnea Radulescu, Vodafone Business Unit Director at Vodafone Romania, to find out how the Romanian business environment has fared through these troubled times.

By Aurel Constantin

How has the implementation of digitalization solutions evolved lately?

In the last year and a half, customer demand has been very high on all segments, especially in the digitalization area. There is a great need for solutions that add value to our customers' businesses. And it's not about connectivity, because it's already a layer of great need; obviously, we are very close to customers to ensure all types of connectivity. 15 or 20 years ago, connectivity was perceived as an added level of value in the B2B sector. Today, people are much more mobile, and the internet is a part of mobility. Every step of this evolution has brought significant added value in the productive circuit of business, and the value has become even more apparent during the pandemic.

Communications are increasingly being perceived as a utility, and the quality of the service, how stable it is, and how quickly it resolves issues are of the utmost importance. But beyond that, all digitalization solutions adopted by companies bring a great value for business, regardless of whether we are talking about the survival of a company or the improvement of its productivity. Everything has to do with digitalization and electronic

devices, all of which rely on connectivity. As we talk to more companies and as the level of education and awareness increases, we see demand for such solutions growing.

What are the most sought-after solutions?

I would distinguish between small and large companies, as solutions are very different for companies of different sizes. In very large companies, the level of sophistication has increased enormously, and they require a very high level of customisation. We create integrated, end-to-end solutions that incorporate all aspects of the business, from payments to signatures. But each client’s specific needs largely depend on the industry in which they operate. For us, our relationship with the client is very important; we organise workshops for various departments within client companies in order to be able to create solutions that both satisfy their needs and prioritise them in a way with which everyone agrees.

Can these solutions be integrated with thirdparty software?

That is highly dependent on the company’s existing setup. It is very rare for a company to build an entire system from scratch. There is usually a system in place to which new solutions and applications are added. Sometimes integrating new solutions requires changes to those systems, but the added value brought by those integrations is much higher than the size of the investment.

When it comes to smaller companies, we are talking about a much higher level of standardisation. Their ability to invest in customised solutions is much lower, and their needs can usually be met with standard solutions that can be implemented immediately. The level of digitalization among small companies is unfortunately very low. Many companies do not have any digital solutions, and innovation in their case does not necessarily refer to solutions, but has to do with communication and with the training we can provide to them. Entrepreneurs must truly understand what digitalization means; they have no use for buzzwords, especially since there is a misconception that digitalization solutions are extremely expensive, which is not the case.

How do you raise awareness about your solutions on the market?

We have chosen to innovate through V-Hub, the platform we use to communicate with entrepreneurs and small and medium companies across the country. Romania is not the only country with a low level of digitalization, but the problem is big here. That's why it was one of the first countries where we brought V-Hub and, since its launch, we have added new features and content. We have over 60 explanatory articles on various topics, from security to productivity tools, and those who are interested can get information directly, without needing to talk to anyone.

We are also focused on the expert advice area, where we have a well-prepared team that’s ready to discuss about anything customers may want to know about digital solutions and how they could meet their needs. Based on their business needs, a consultant can explain to clients what solutions they could adopt and why it would be economically feasible to make the investment. The decision is up to the customer, but this represents an important part of our relationship with them. This expert advice is of course provided for free, and any company in Romania, especially SMEs, can understand what digitalization is with the help of the platform and our consultants. Vodafone is always making efforts to keep all the information up to date, to help SMEs understand how they can benefit most from technology and digital solutions. For example, a client may have a restaurant, and they may want our help to add delivery services, receive online payments, get better internet connectivity or find ways to make their customers have an even better experience. All this dialogue can be carried out with a digital consultant who can talk to the entrepreneur about the solutions they could adopt, what those solutions would bring in terms of added value and why it would be economically feasible for them to invest. Obviously, all decisions will be made by the entrepreneur, but I think it is a very important step for the relationship we have with customers. Of course, all these services provided through V-Hub platform are free, we do not ask for anything for all this information.

Furthermore, we have added a try & buy option, meaning that you can take a solution and test it for a month to see if it is what you need before you might decide to buy it.

V-Hub is a platform for everyone, we don’t just focus on certain sectors, and we launched it based on the fact that the levels of digitalization and digital education are very low in Romania. ; we also have third-party solutions integrated into our portfolio, which have been thoroughly tested and guaranteed to be secure, and they are readily available to customers. This ecosystem of solutions can bring great value to any company, regardless of its size.

One of our guiding principles is not to sell customers things they don't need, because that doesn’t help anyone. So, when they buy a solution from us, they can be certain it’s exactly what they need.

What percentage of those who have visited V-Hub have returned?

First of all, the platform must be made known to the public, which is why it needs a good and accurate communication strategy. Then there are early adopters, who are willing to test every new solution, but they are a small minority. And let's not forget that we are talking about a lot of small businesses, which see an internet subscription as being an important acquisition, especially in the period we are going through.

Thousands of entrepreneurs have come in and found out about the platform, and now we have decided to run an information campaign about the fact that Vodafone is not just a provider of telecommunications services, but a provider of technology as well. Since the launch of this campaign, visits to the V-Hub platform have increased exponentially.

Between large and very small companies are the mid-sized ones, with a few dozen or a few hundred employees, and we have already developed a lot of solutions for such clients, in various areas, from energy management to waste management, fleet management, and others. We are happy that they are demonstrating such great interest in digitalization solutions because it proves that our strategy is the right one and that customers appreciate it.

But it's a long road we stepped on and I don't expect the return to be immediate. I expect the platform to grow step by step and for the SME area of our business to have good results in the coming years, as I believe it will be key in our future. I am certain that there is a great need there and we are ready to meet that need and I have no doubt that there will be a return.

What is your target for V-Hub?

There are about 700,000 companies in Romania, although we do not known exactly how many of them are active, so let's say it's somewhere between 500,000 and 600,000. All these companies are included in our target. According to studies, the level of digitalization is below 20 percent in Romania, therefore it is clear where we are starting from. We want to inform and educate as many entrepreneurs and companies as possible, without asking them for anything in return. We’ll continue to expand our portfolio of solutions to provide them with everything they need.

Romanian companies have the chance to become competitive on the market. SMEs are the backbone of our economy and it is important for us to help them not only survive, but thrive. SMEs have a GDP contribution of over 50 percent and they employ over 60 percent of the local workforce. The products we provide to these companies are listed on V-Hub and they are financially accessible and can be implemented immediately. We also provide them with assistance whenever they need it. In fact, one of the big gaps between the desire to digitalize and the decision to do so is the belief that you have to invest thousands and thousands of euros. This is also the reason why our digital solutions are offered based on a monthly subscription model, which means they are not required to make large upfront investments – and that is one of the biggest competitive advantages Vodafone has on the market.

How will 2021 end compared to 2020? How will V-Hub evolve?

From a business point of view, we’ve seen an increase on all segments.. But the greatest growth we are seeing is in this area of digital solutions, and I am glad that we have managed to be prepared for this rise in demand. The need is huge and we want to take these solutions to a great number of small and very small companies.

So, we see an exponential growth for digital solutions and I am glad that we were ready to offer them. And we want to take these standardized solutions to the level of small companies, where the need is even greater.

But everything comes back to education, as it’s our only chance to truly evolve. That is why we’re choosing to innovate in the area of information and education, because it would be a shame if we didn’t do it. I am firmly convinced that this is the right thing to do.

We’ll also be bringing new things to V-Hub, we’ll soon add more features and tools, including providing entrepreneurs with the chance to evaluate their digitalization level, which will help them understand their current level and what they need to do in the future. We also want to draw a link to European funds programmes, to help SMEs understand what kinds of funds they could attract and the associated conditions. This is also highly dependent on the amount of help that these companies will receive from the authorities. All in all, V-Hub will continue to advance and I hope that it will become a go-to platform for education, information, and expert advice.

The covid-19 pandemic has had a transformative impact on companies across the world, having forced many of them to re-evaluate their entire business models. With the help of vaccines, we can hope for a return to a normal life in 2022, but until then, businesses must find a way to at least survive, if not thrive, and the only way to make that happen is to embrace digitalization.

By Aurel Constantin

Digitalization can mean a lot of different things depending on the business. For a small boutique shop, it can simply mean getting a computer connected with the cash register or adding an internet connection. For a corporation, it means building an entire digital ecosystem with multiple integrated software solutions like ERPs and CRMs, as well as smart buildings and connected offices. At the heart of all such digital solutions are technologies like the Internet of Things (IoT), Artificial Intelligence, and Big Data. Of these three, IoT is the most transformative, as it can be seen as a spider web that gathers data for Big Data to store and AI to analyse.

The more devices are connected through IoT, the more powerful the Big Data becomes. In its 2020 IoT Spotlight Report, Vodafone Business talked about “future-ready” businesses, meaning those companies that are well-prepared to embrace whatever lies ahead. “Future-ready” businesses have a positive approach to change and are open to new technology. They actively plan for their technological futures and set detailed strategies. They keep up to date with emerging trends and, crucially, are able to adapt to new challenges, which makes them quicker to market than their competitors. And “future-ready” often translates to “IoT-ready,” the report says.

In 2020, Vodafone Business reached the key milestone of 100 million IoT connections worldwide, and today it has more than 118 million. “Businesses have moved on from simply trying to understand IoT to harnessing it to achieve their business goals. Leaders have realised that access to data and automated processes provide a pathway to digitalization. With this shift comes higher efficiency, flexibility, and differentiation. But while IoT is more trusted and used than ever before, our research shows that there many organisations are yet to make the most of it. This may be due to a growing belief that IoT has to be part of a wider programme of change to be truly transformational,” said Erik Brenneis, IoT Director at Vodafone Business.

POSITIVE RETURN ON INVESTMENT

The IoT Spotlight is an independent study conducted by Savanta, which surveyed 1,639 businesses globally. Business leaders were asked about how they were using IoT and how it was helping them be “future-ready.” The report found that IoT was key in improving business performance and that it continues to generate real business value, with 95 percent of respondents seeing a positive return on investment. The benefits of IoT fall into two main categories: improving operational efficiency and creating new connected products and services.

The survey was conducted at the height of the pandemic, and 84 percent of IoT adopters felt that IoT was a key factor in maintaining

business continuity throughout the period. While this meant some projects had to be paused and resources reprioritised, the crisis prompted 73 percent of IoT users to accelerate the pace of adoption. About 86 percent of respondents said IoT had changed the way they approached analytics and the value of data and 87 percent agreed their core business strategy had changed for the better as a result of adopting IoT. The survey found that 73 percent of adopters were confident that companies that will have failed to embrace IoT within the next five years will have fallen behind, meaning that IoT is expected to create sustainable, long-term competitive advantages.

The adoption of IoT has continued this year too, as companies have found that the technology can generate value and a good return on investment, with 61 percent saying that these returns are significant.

Half of respondents (50 percent) pointed to improved employee productivity as a key benefit of IoT deployments, while 42 percent defined asset uptime (consistency and reliability) as a core advantage. More than a third of adopters were able to innovate their offerings through IoT. Some 34 percent saw IoT directly generate new revenue streams, while 34 percent saw existing revenue streams increase by an average of 24 percent. Collectively, 82 percent experienced a rise in revenue as well as in market share (81 percent) since adopting IoT. Strikingly, IoT had enabled over half (55 percent) of surveyed businesses to decrease their operating costs by an average of 21 percent. As a result, 39 percent of all adopters said that IoT allowed for greater flexibility when supporting their customers.

HELP IN PANDEMIC TIMES

The research demonstrates that organisations that have adopted IoT seem to have fared better during the covid-19 pandemic than those that have not. During this time, IoT has become vital for business resilience. Not only has it enabled some tasks to be automated and work to be carried out remotely, but it has also helped prioritise manual work to cope with reduced labour and protect those employees doing vital work. For example, energy providers can remotely check utility installations from a distance rather than going into the field themselves.

It’s unsurprising then that 77 percent have reconsidered their approach to IoT following their experiences this year. In addition, as businesses enter the new normal, they are recognising that IoT provides them with the data they need to understand what the new normal looks like and to plan and act accordingly. IoT provides the gateway to build large new data sets quickly and to gain vital insights to help organisations compete effectively in whatever the new normal looks like. IoT’s role in remote working increased in importance in this year’s survey. 84 percent of adopters now view the integration of IoT devices and data with remote workers as a high priority. With remote working expected to be a key part of the new normal, adopters are expected to increasingly use IoT to support this change.

IOT FOR A CLIMATE-NEUTRAL EUROPE

IoT, AI, Big Data, and other digital solutions are key facilitators of sustainability in a wide range of industries, from smart agriculture to smart logistics, smart cities, and smart energy. In addition to benefits of automation such as increased productivity and reduced costs, IoTbased solutions have the advantage of increased efficiency, both operationally and in terms of resource use, which translates into lower energy and fuel consumption, low emissions, and a reduction of pollution and waste. It is not a surprise that the EU has pledged to become climate-neutral by 2050, as part of the European Green Deal, and become a global climate leader. The Green Deal provides an action plan to boost clean, affordable, and secure energy, cleaner industries and production processes, energy efficient buildings, sustainable and smart mobility, sustainable agriculture, and biodiversity restoration.

“This is shaping the world in which we want to live; a world where we use digital technologies to build a healthier, greener society,” said European Commission President Ursula von der Leyen. Achieving a fair and sustainable transition to a climate-neutral Europe by 2050 will require action and investment in digital solutions across multiple sectors including agriculture, energy, mobility, and construction. In recognition of this, the EU has pledged to allocate 37 percent of its Recovery and Resilience Facility fund to drive green investments and reforms, while 20 percent has been allocated the digital transition.

Vodafone has implemented many projects across Europe, including Romania. Intelligent logistics, measures to reduce fuel consumption, smart farming and precision farming, smart city solutions to improve the efficiency of energy-intensive services such as public transport, road networks, and street lighting – these are just a few of the projects that have already been implemented by Vodafone. And it is clear that digital transformation will only accelerate in the coming years.