Digital transformation: 70% of SMEs worldwide adapted their business offerings as a result of COVID-19

Published on 14/05/2020 by Ines Bahr, Lucca Rossi and Sonia Navarrete

From one day to the other COVID-19 completely changed the way the world used to work. No matter if we live on the continent of kangaroos, in Shakespeare’s country, in the city of love, or in the capital of Carnival, we have all been sent home to work fully remote and products and services had to be adapted virtually, leading SMEs to an obligatory digital transformation.

digital transformation during the coronavirus

The world is facing many challenges, like having to learn how to use new software tools for remote work and getting used to new forms of communication with colleagues and managers. Another big challenge is IT security: Many hackers have used the crisis to attack companies and steal valuable data. Remote workers are an easy target for those criminals. 

We wanted to learn more about digital transformation, remote work challenges, the usage of software, and security practices around the world during the pandemic. Therefore, Capterra conducted a survey* of 4,600 full time remote work employees from small and medium businesses (SMEs) from Australia, Brazil, Spain, France, Germany, Italy, Mexico, Netherlands and the UK.

Particularly in the UK, the results of the remote work survey showed that the majority of employees are enjoying working remotely (67%) despite the lockdown. Other key highlights of the study in the UK include:

  • 43% of companies had to buy or install new software to be able to work remotely
  • 76% of companies have changed some or all of their offering so it can be delivered virtually
  • The main benefits of working remotely for UK employees include no commute (37%) and casual dress code (27.9%)
  • The main challenges to working remotely are loneliness (26%) and internet connectivity (25%)

59% of SMEs went fully remote globally  

Whether it’s working at home with your favourite radio channel on, a hot cup of coffee, or no noise from a busy office: Almost 60% of employees worldwide are enjoying working remotely.

Our global survey respondents also identified many advantages of working remotely. Here are the top 5 mentioned:

  • No commute
  • Adjusting work hours around personal life responsibilities
  • Casual dress code
  • Increased productivity
  • Ability to take care of children and pets

The future is remote: 55% believe their business could function permanently with remote work staff

The crisis is pushing digital transformation and shows companies how important it is to not only adapt products and services, but also working conditions and mindset. Remote work had been reality for a small number of employees around the globe: Only 11% of employees worldwide worked remote full time before the crisis.

If people enjoy working remote and management doesn’t perceive a drop in employee productivity during this period, the future will continue to trend toward remote work.

Gartner predicts that the Generation Z will further reinforce this trend. Generation Z (born between 1995 and 2010) is the generation of true digital natives. Generation Z have honed their digital collaboration skills throughout their lifetime, and prefer digital collaboration over in-person collaboration. Generation Z’s preference to work remotely will solidify remote work as a standard working practice moving forward.

How to keep a remote workforce productive

Brian Kropp (VP at Gartner) has some tips on how to help your employees stay productive in the home office. 

  1. Equip employees: Make sure employees have the technology they need to be successful. This covers everything from the right hardware to the software for team collaboration
  2. Focus on outputs not processes: Focus on what employees should be accomplishing. Set up clear objectives to create greater clarity for employees and focus on them and not on processes. 
  3. Increase recognition: “During periods of disruption, employees’ desire for being recognized for their contribution increases by about 30%,” says Kropp. Recognition can be public acknowledgment, tokens of appreciation, development opportunities and low-cost perks.
  4. Use two-way communication: Two-way dialogue between managers and employees is essential. Especially during change it is very important that employees understand organizations’ decisions and their implications and managers understand employees’ challenges and concerns.
  5. Trust in your employees: Managers may be frustrated to lose the constant visibility into their employees, but don’t respond by micromanaging. That will only disengage already stressed employees. Put trust and confidence in your employees instead.

70% of companies globally were able to adapt their products virtually

Gyms broadcasting training videos online, restaurants offering food delivery on self-created websites, real estate agents showing houses to customers via webcam and professors transforming their living rooms into classrooms. 

It’s impressive to see how many companies worldwide were able to react to the crisis in the shortest amount of time. According to the survey, 70% of companies were able to adapt some or all of their business offerings so they could be delivered virtually now. Digitalising your product or service is one step on the way to earning new digital revenue. If you want to further transform your business offerings, here is a how-to list we created to guide you through the process.

How to earn new digital revenue

For tips, check out Gartner vice president Hung LeHong’s 6 key ways to earn new digital revenue, which are sorted from least to most transformative. 

  1. Sell existing digital assets: The easiest way to start is selling digital assets, which you already own, like information or know-how.
  2. Digitalise a product or service: Adapt your product or service virtually. Deliver your products digitally or offer your services online. 
  3. Sell on a pay-as-you-use basis: Buyers will be more likely to use your digital assets if they don’t have to sink resources into owning or managing them.
  4. Vary prices for buyers based on shared metrics: Offer flexible pricing for a successful sale or a specific service level. 
  5. Run a platform business: With a platform business you can trade products and services without having to own or distribute them. Airbnb is an example of this type of business.
  6. Move into new industries: Use your expertise in one industry to launch its way into another.

60% of SMEs worldwide have to invest in software to prepare for working remotely

Companies adapted their usage of technology to respond to the crisis, leading to a digital transformation in their strategy. Remote work software was purchased and these tools were quickly adopted by their employees. Our data shows that 60% of companies bought or are planning to buy new software tools for being able to work remotely. 

The survey found that 64% of employees worldwide learned these newly purchased software tools easily or very easily.

Furthermore, the software infrastructure has also been impacted. Our survey discovered that businesses are increasing their investment in cloud technologies. In fact, 39% of companies globally are now using cloud products to support remote work.

In the following graphic, you can see which tools are being used for remote work worldwide.

most-used-tools-for-remote-work

Important note: Most software products were adopted to enable

When purchasing new tools, it’s important to invest in IT security as well. Otherwise, the risk of cyberattacks will increase (see tips on how to create a safe working environment at the end of the article). 

Communication problems with colleagues and loneliness are among the top 3 challenges of working remotely

Although the majority of employees identified they enjoy working from home, some challenges were also identified. It’s important to address and solve these challenges, so employees can experience a more successful and productive remote work experience. 

top-5-challenges-of-remote-work

The majority of businesses are supporting their employees during this crisis, providing software for communication and guidelines in the right areas. The study shows that 37% of companies provide guidelines on communication and team meetings, but this isn’t enough. 

How to improve communication when working remote

We have 5 tips on how you can improve the communication in your team: 

  1. Schedule update meetings: Plan daily stand-up meetings (or weekly update meetings with smaller teams), so all team members are informed and have an overview of tasks, project progress, and any important changes.
  2. Provide space for small talk: Before or after official meetings, use conference software to provide a space for people to talk about topics not related to work. Speak to employees about things they are personally interested in.
  3. Schedule brainstorming sessions: Schedule fixed times for teams to improve processes and think of new ideas. During periods of great change, it’s important to keep looking out for innovative ideas.  
  4. Choose the right method: Don’t insist on using a messaging tool or endless e-mail exchanges if you feel you are losing too much time. Get on the phone or webcam: A 5-minute call can be much faster compared to a lengthy direct message. 
  5. Don’t forget the fun part: Organise team building activities like virtual after-work drinks, pub quizzes, movie nights, or virtual escape rooms.

working-remote-globally-digital-transformation

Only 36% of employees use strong passwords

One of the most important things for remote work is creating a safe working environment. We recommend the following 5 steps to help ensure IT security for your business. 

→ 40% of the employees globally use only their personal devices to work remotely.
  1. It’s highly recommended to not use the same device for work and personal use. This leads to a higher risk of exposing not only your data, but your company’s data too. 
→ Only 39% of all employees have antivirus software installed.
29% use Firewalls.

2. Invest in security tools like antivirus and firewall. These two systems should be the standard in every business. Furthermore, consider investing in network monitoring and endpoint protection.

Tip: Security software has to be installed on all private devices (laptop, tablet, smartphone) which are used to access business data.

32% were victims of a phishing attack; of those, 49% happened during remote work.
→ Only 22% use e-mail security software globally. 

3. E-mails are one of the most important forms of communication in businesses, and unfortunately also one of the most insecure. Email security software can help to reduce the risk of phishing attacks. The software identifies malicious emails and sorts them out.  

Tip: Companies should conduct a phishing test. The test can be used to determine the susceptibility of employees to e-mail phishing.  

→ Less than one-third of companies use a VPN.

4. Implement a VPN, especially if sensitive business data is transferred during remote work. VPNs can provide an encrypted connection to the Internet that prevents third parties from viewing network activity.

→ Only 36% of employees worldwide use strong passwords, with randomized letters, numbers and characters.
→ 29% use a password manager.  

5. Good password management is essential to prevent cyberattacks. Companies should use this time to educate their employees about the importance of strong passwords. A password manager is the most secure and convenient solution. It also makes sharing passwords with colleagues easy. 

Tip: When you buy a password manager you should look for one that offers two-factor authentication (2FA). The authentication won’t activate automatically, so don’t forget to set it up before sharing it with your team.  

In the graphic below you can see how remote work employees worldwide are managing their passwords: 

it-security-issues-digital-transformation

Looking forward

This is a moment of historical uncertainty. However, there are some key takeaways that aren’t just relevant during a crisis, but also for when things start to calm down.

We’ve learned that:

  • Companies are quickly adapting to working remotely and offering their product virtually
  • Companies are adopting new software
  • Employees like the option to work remotely.

However, we’ve also learned that companies need to improve:

  • Communication with employees
  • The use of security tools
  • Password policies.

Employees working remotely have been happier when their company has given them a bit more trust. That trust could be in the form of casual dress codes or flexible working hours, but the point is that trust goes further than micromanagement. Companies have had success adapting their offering virtually and switching to new software, so don’t be afraid to look at your processes and tools if they’re not working. 

Looking for remote work software? Check out our list of the best remote work software solutions.

*Survey methodology

To collect the data from this report, we conducted an online survey between 4th April 2020 and 14th April 2020 with 4600 employees of small or mid-sized businesses, who are working remotely as a response to COVID-19. The participants come from various business sectors and levels of seniority. Respondents are from Australia, Brazil, Spain, France, Germany, Italy, Mexico, Netherlands and the UK.

Note: The graphic about top challenges working remotely had multiple response options, so the total sum of the percentages exceeds 100%.

 

This article may refer to products, programs or services that are not available in your country, or that may be restricted under the laws or regulations of your country. We suggest that you consult the software provider directly for information regarding product availability and compliance with local laws.