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Digitisation 4.0 - digital transition

Digitisation: five technologies which every SME should be familiar with

Digitisation in SMEs: technologies you should know about

Digitisation in SMEs is supported by many innovative technologies, such as cloud computing or Virtual Private Network (VPN). We present to you five important applications which you have to be familiar with and which will help you where digital transition is concerned to optimise internal procedures, to achieve greater efficiency, to cut costs or even to make better and often also quicker decisions.

1. Cloud computing
2. IoT (Internet of Things)
3. Virtual Private Network (VPN)
4. SD-WAN (Software-Defined Wide Area Networking)
5. Analytics (data analysis)

These days, no company can avoid addressing the issue of digitisation – this also applies to SMEs. Many people still think digital transformation is an abstract concept which has nothing to do with small companies. However, this is unfortunately not the case.

So what does digitisation actually mean? It is anything but an abstract concept, rather something very practical that is closely connected to certain technologies and it is in your own interest to use it. In this context, every SME has to decide for itself which technologies are necessary in its respective business environment – and which ones are not essential.

1. Cloud computing

Cloud computing transfers IT resources such as server or software solutions to IT service providers. These resources no longer need to be housed in a company’s own data centre but can be purchased as a service like electricity. To that end, public cloud providers like Microsoft, Google or Amazon make standardised software and infrastructure services available on their publicly accessible cloud servers via an Internet connection. The main benefit of public cloud services is that companies can access IT resources very quickly, very flexibly and very cheaply.

In the context of IaaS (Infrastructure as a Service), this can be additional computing and storage capacity, for example, for document management. Or as SaaS (Software as a Service), it could be the use of word processing, spreadsheet or presentation software. Business services such as ERP, CRM and DMS systems are offered. In the context of digitisation, Swiss SMEs get significant benefits from public cloud services for cooperation and mobile data access.

2. IoT (Internet of Things)

The IoT connects everyday items with industrial products like machines, workpieces or means of transport. IoT-based devices are equipped with microprocessors, RFID chips or QR codes and can exchange data and communicate with each other. Scanners and computers select the relevant data, transmit it online and ensure that the devices respond correctly.
So the IoT makes it possible for objects such as cars, machines or fridges to independently exchange information and to interact with each other and with people.

For example, by entering into a dialogue, they can negotiate which machine is going to assemble a specific component. The IoT also makes it possible for a machine to register independently that it is having problems and, for example, take measures to repair the fault. Even very simple IoT applications can be very beneficial: for instance, sensors can monitor when and how a product is used, the current location of specific freight packages or the current status or capacity of vehicles while they are in use.

3. VPN (Virtual Private Network)

A VPN links networks via secure, encrypted connections. As a rule, the connections are established via the Internet. Participants’ communication within a VPN is comparable to communicating in a local network. Since the data packages cannot be viewed on the way from the sender to the recipient, but can in general only be read at the start and end points of the transmission, this is sometimes also referred to as a “VPN tunnel”.

Companies frequently use VPN access to integrate employees into the company network via the Internet. For example, this enables home workstations to be integrated into the company network in such a way that it no longer makes any difference to employees if they are on the company’s premises or at another location. In order to access a VPN, it is necessary to just have a small program – the VPN client – installed on the local computer. This ensures that all data packages are transferred securely.

4. SD-WAN (Software-Defined Wide Area Networking)

As a result of the increase in cloud computing, mobile working and the IoT, it is essential for companies to have powerful site networking. These days, many companies use SD-WANs for this purpose. In doing so, they make it easier to set up networks for branches and optimise application performance over the Internet. SD-WANs are also considered to be very flexible and inexpensive and at the same time can be quickly implemented with little effort.

SD-WANs are based on software-defined networking, a concept whereby software services are decoupled from the underlying hardware in the network. This makes it possible for the data traffic to be dynamically transferred to different networks and connections, thus optimising bandwidth.

If one connection is lost, the traffic can be redirected to other connections. This makes it possible to respond quickly in case of an unscheduled change of two or more network services (failover) and to achieve a high level of failover capability.

5. Analytics (data analysis)

A data analysis helps SMEs’ marketing employees to extract valuable information from company data. Analysing data, for example, on customer behaviour or social media comments, promises to provide useful insights and information for optimising operations and decision-making: for instance, which products do buyers put in the basket and in what order? What products are bought? And what hurdles are responsible for purchases suddenly being cancelled?

Answers to these types of questions are provided by analysis tools like SAP HANA or Hadoop which can deal with and analyse big data. In this way, the data analysis puts companies in a position to create fine-grained population and customer segments to optimally tailor their goods and services to customer requirements. A company can, for example, easily find out by means of a data analysis why customers are taking their business elsewhere and then counteract this development by taking targeted measures. Strategic management decisions are now also often based on data analyses.

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