EY study: “Digital Change in Austrian SMEs” 2022

EY study: "Digital Change in Austrian SMEs" 2022

Cloud computing, data analytics and AI as digital future drivers of Austrian SMEs. […]

Numerous topics, which for many have been located on the periphery in recent years, have recently become more and more the center of attention – also due to the corona pandemic: including digitization. While the digital approach was a future topic a few years ago, many companies are already in the middle of implementation today. The importance of digital technologies for the business model of medium–sized companies has again grown slightly compared to the previous year: 80 percent of companies now attribute medium-sized importance to them – a year ago, the share was 77 percent. 29 Percent (previous year: 30%) even consider the role of digitization to be very important.

Around one in six medium-sized companies (16%) wants to introduce cloud computing, twelve percent want to use data analytics in the next two years and one in ten medium-sized companies plans to use artificial intelligence (10%). The focus is on building digital customer relationships, the use of mobile devices and analytical tools to better understand the needs of customers and to personalize the offers.

These are the results of a study by the auditing and consulting organization EY, for which 628 medium-sized companies with 30 to 2,000 employees in Austria were surveyed.

Working in the cloud increases

Especially the topic of cloud computing – the use of IT infrastructures and innovative services that are not stored locally on local servers – is an important one that many medium-sized companies are currently actively dealing with. “For many people, cloud and digitalization are still abstract, often negatively affected terms. At the same time, due to the lockdown and virtual cooperation, digital technologies have almost become a survival factor for domestic companies,” explains Christoph Mayer, Partner and Responsible for the EY Microsoft Services Group at EY Austria.

That’s why EY & Microsoft have formed an alliance to drive $15 billion in growth potential through technological cloud innovation across all industries. In the future, the EY and Microsoft teams will work together on cloud solutions for regulated industries to accelerate digital transformation. The initiative is also intended to help Austrian companies overcome regulatory hurdles in order to switch to the cloud and develop innovations.

“Make it possible this morning”: Positive climate for cloud innovations

Both companies are also involved in the “Make this morning possible” initiative. This digitization initiative is a non-partisan, open initiative to create a better climate for digitization and cloud use among politicians, the public and the media in Austria. It is based on four pillars: innovation, skills, sustainability and safety. EY supports the initiative in the “Innovator” category and is setting up a series of events in which specialist topics from one of the four pillars of the initiative are dealt with per event. It is important to jointly reduce the hurdles of cloud computing and pave the digital path for Austria’s SMEs.

“Progress is best achieved with strong partners,” says Hermann Erlach, General Manager of Microsoft Austria. “We need clear target images for digitization in Austria. Only with the right practical examples for the individual sectors of the economy can we work towards a clear goal. Obtaining technology-open access is the first important step. Because we want to make the democratization of innovation possible for all segments and regions, especially through the cloud. This will especially help the local small and medium-sized enterprises,“ Hermann Erlach is convinced.

“As a business location, Austria is under high competitive pressure. For Austria, as a high-wage country, innovation is the most essential approach to growth – and to keep up with the competition. Rapid changes require rapid implementations. Digitalization is one of the most important location factors,“ Mayer comments.

Austria significantly exceeds EU average in the use of AI

In the European Digitalization Index (DESI), Austria occupies a place in the top 10. In the category “Integration of digital technologies by SMEs”, the republic ranks eleventh primarily due to good performance in the new indicators (information and communication technology, sustainability, artificial intelligence and SMEs with at least a basic degree of digitization) – an improvement of six places compared to the previous year. When it comes to the use of technologies from the field of artificial intelligence, Austria currently holds a clear gap to the EU average of 37 percent (25%). According to the EY expert, digitization offers great potential, especially for SMEs, which must be fully exploited in order to reach digital eye level with large companies. The topic of the cloud opens up numerous possibilities for medium–sized companies, which can also be financed – because with cloud services you only pay for the computing power that you actually need. As a company, EY has invested massively in cloud transformation in recent years and now obtains more than 80 percent of its IT services from the cloud.

Investment barrier Shortage of skilled workers

However, a well-implemented cloud infrastructure alone is not enough for companies to take a successful digital path. In addition, workers are required – i.e. experts who can also implement the digital solutions. This know-how is not available in many places, as the shortage of skilled workers often puts a stop to the bill: the WKO estimates that there are about 10,000 IT specialists missing in Austria and the EY Sme Barometer also underlines this assessment – every eleventh company surveyed (9%) names missing personnel as the number one obstacle to investment. “It is important to interlink the analogue and digital world in order to integrate digital facilitation in a meaningful way in everyday work. The main aim is to relieve the burden on employees and, for example, to allow routine tasks to be carried out digitally. One with each other instead of against each other,“ Mayer explains.

Sustainability also in the digital world of work

Sustainability plays a major role not only in the overall corporate strategy, but also in cloud innovations and is questioned by Austrian SMEs. “The future is becoming more and more digital – cloud solutions are not becoming less, but more. Therefore, it is critical that the CO2 footprint for cloud computing is drastically reduced,“ says Mayer. The Microsoft Cloud already produces 98 percent less CO2 than conventional data centers. In addition, Microsoft data centers will only use 100 percent renewable energy by 2025. The Austrian data center will be the most modern of its kind, the 26th generation of Microsoft data centers. “Sustainable thinking in the world of work is no longer a ‘nice to have’, but a big must. We are going one step further and are not only focusing on the physical world of work, but also on the digital one,“ emphasizes Mayer.

Security by Design: Focus on cyber security

While the digital aspirations of SMEs are still on the rise, concerns about cybercrime are also being voiced. Cybercrime is on the rise due to increasing digitization, but also home office and companies are increasingly confronted with attacks. Large cloud providers such as Microsoft invest over one billion USD annually in cybersecurity measures to protect their data centers and thus their customers from attacks. Without effective security measures, SMEs also risk the trust of their customers, interest groups and the market and at the same time expose themselves to ever greater risks. That’s why EY relies on Security by Design: Instead of completely avoiding risks, the security-by-design approach is about creating trust in systems, designs and data so that organizations can lead transformative changes and innovate with confidence.

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