Family businesses play a significant role in the global economy, and a number of business empires are family-owned. And just like any company today experiencing a tech-driven change, family-run enterprises aren’t an exception. To remain competitive, however, these firms should have a clear sense of what they want to accomplish and adjust accordingly. They can’t stubbornly oppose change and insist on the same business practices forever, because it could be detrimental for them and cause irreparable damage.
Instead, family companies should focus on developing a culture of innovation and encouraging creative and fresh thinking. According to a survey conducted by Ernst & Young (EY), a company offering assurance and advisory services, 67% of global family businesses foster agility and change, while 59% plan to invest in new products and services.
Over the past few years, we’ve witnessed the emergence of various tech trends. While some turned out to be short-term fads, other, more powerful trends are here to stay. Those who realise the importance of these disruptive trends and step up their game will not only survive, but also thrive in the years to come.
AI could help family businesses improve efficiency and cut operational costs
Probably one of the biggest emerging technology trends today is artificial intelligence (AI). By automating mundane and complex processes, this technology has the potential to bring core changes to family businesses. Thanks to AI-powered solutions, companies’ management teams are able to make better decisions, improve efficiency, and reduce operational costs.
Although AI brings numerous benefits, family businesses should be careful when adopting it. Tech Wire Asia, for instance, suggests that instead of deploying the tech everywhere at once, it’s better to implement it in those areas that need the biggest help. This way, the company won’t be overwhelmed by too much innovation. A successful example of AI implementation comes from a Japanese family business called Snow Peak. The company, which manufactures outdoor gear and apparel, decided to invest in predictive analytics to gather and unify data in real time across different markets. Using AI-powered data analytics tools, Snow Peak was able to “make targeted suggestions for future purchases”. As a result, the company increased its revenue and boosted its growth.
Small businesses can also use AI-enabled chatbots to improve customer service. Instead of long wait-times and delayed responses, smart algorithms can provide instant feedback to basic inquiries and provide staff with time to handle more complex issues. Companies such as Digital Genius or ChattyPeople, for instance, provideturnkey solutions for automated customer service.
How can family businesses benefit from 5G?
Another trend worth considering is 5G, which has the potential to bring unprecedented internet speeds. The global 5G services market is expected to reach a value of $53.93 billion in 2020, and by 2025, it will be worth $123.27 billion. As the 5G market continues to grow, more businesses will realise the benefits of this tech. Besides connecting people, 5G will also connect things, which means it will expand the capabilities of Internet of Things (IoT) technology. What’s more, 5G could immensely improve remote work and collaboration and provide businesses with better scheduling. Since network-based work will be faster thanks to 5G, conducting tasks such as sharing large files on the cloud or managing online sales will require minimal time and effort.
The car manufacturer Volkswagen, controlled by the Piech-Porsche family, is jumping on the 5G bandwagon. In 2020, the company wants to develop its own 5G mobile network and deploy it to 122 of its factories in Germany.
And tech-savvy small businesses will also benefit from 5G. They will, for instance, be able to communicate with customers, workers, and partners more easily, streaming high-resolution video and images. This will make remote work easier, and faster communication will ensure that things get done efficiently and without costly delays. Also, 5G is set to improve connectivity of rural communities, enabling even more people to start small businesses.
But before going all-in on this tech, it’s important for businesses to prepare for 5G adoption. It’s essential to ensure their infrastructure can support the new tech, as well as to determine in which areas it can help the most.
The key to a transparent family business lies in blockchain
AI and 5G aren’t the only innovations set to reshape the world of family business. Blockchain, the technology behind Bitcoin and other cryptocurrencies, can bring revolutionary changes to modern-day companies. Blockchain could help family businesses overcome challenges associated with lack of transparency, such as fraud and corruption.
"I only see opportunities with digitisation," says Ingrid Faber from the Dutch family business Pooling Partners, a leading pooler and provider of wooden pallets and boxes.
"For example Bitcoin’s underlying technology—distributed ledger technology—could potentially offer some use and benefit in our business. I’m not talking about investing in bitcoins, rather what the technology could mean for our business and operations.”
On blockchain, data is encrypted, and once stored, it can’t be altered or exploited for illegal activities. With blockchain, family businesses can track their goods and gain insight into a product’s history, all the way from its origin to the point of sale. Blockchain adoption will also improve customer trust, as consumers are more than happy to buy a product or use a service from a company that promotes transparency.
Walmart, one of the most popular retailers in the US, is already experimenting with this tech. This retailer, owned by the Walton family, has been working with IBM for over a year on digitising its food supply chain. In 2018, Walmart announced that its suppliers of leafy green vegetables are required to upload information about the produce on a blockchain platform by September 2019. The goal is to make sure that food sold at Walmart is completely safe for consumers.
Small businesses can benefit from blockchain, too. Tyler Scheid, for instance, helped his family business, Scheid Family Wines, to use distributed ledger technology to better track its supply chain and improve transparency. Customers can scan a QR code on their wine bottles and inspect details such as the vineyard of origin or harvest dates.
Implementing technology is the most secure way for family firms to future-proof their business. This isn’t an overnight process, however, and businesses eager to survive in a rapidly changing world should carefully consider what kind of innovation they want and need.