Virus creates new ICT opportunities

WA ICT service providers have an important role to play as businesses rush to adapt amid the COVID-19 fallout, but there are challenges.

Stephen Cornish knows Australia has a long way to go before it can claim to offer best practice in internet services.

Mr Cornish founded Pentanet, a Balcatta-based fixed wireless and NBN service provider, in 2016, having struggled with poor download speeds and overall network infrastructure as an online gamer.

Pentanet is currently in the midst of a $5 million pre-IPO capital raising, and Mr Cornish said its growth plans were timely given the sudden surge in demand for remote working arrangements as a result of the COVID-19 pandemic.

Mr Cornish told Business News the suddenness of the shift had led to a cultural reckoning for many organisations unfamiliar with the complexities technology introduced to a business.

In this respect, he said, Pentanet’s biggest assets were its network and local workforce.

“We’re all in the same building, but we already have a lot of staff that work remotely or hours outside of the 8am-5pm type of thing,” Mr Cornish said.

“We can demonstrate the value of having a network because we obviously run it.

We don’t have to come into the building if we don’t want to.

“I like everyone to be together, and I think everyone here likes to be together, too, but if we do need to [work from home], it isn’t a foreign thing at all to have departments online with a headset.”

With the opportunities for companies such as Pentanet growing in recent weeks, Mr Cornish said Western Australia’s ICT service providers would need to confront myriad challenges to deliver for clients.

“Our network as an alternative still requires equipment and infrastructure,” he said, referring to the physical hardware requirements associated with establishing a connection with a new provider.

“It might soon be the case [that internet services] become the new toilet paper.”

New realities

With COVID-19 now classified as a pandemic, the World Health Organisation has provided directives for people to work from home where possible, to slow community spread of the virus.

In this new environment, ICT services have taken on renewed importance, with the likes of Google and Microsoft offering free services in an effort to get more businesses to migrate their operations online.

Although that heightened demand may seem a temporary response to the pandemic, ICT consultancy Velrada’s chief executive, Rob Evans, said it was the acceleration of an inevitable move towards conducting business online.

While Mr Evans welcomed that shift, he told Business News the pace at which the move had occurred could be a shock for businesses that had not anticipated the need for such drastic changes.

“These episodes tend to shake-up weaker industries and companies,” Mr Evans said.

“If your answer to the threat is to dust off the e-commerce strategy you had 10 years ago that you didn’t implement back then because you thought it wasn’t a good idea … that’s scary.”

Part of why some businesses hadn’t taken IT seriously up to now had been a perception problem, he added.

Mr Evans said some businesses tended to believe IT services could be delivered easily, on the cheap, and by limited staff on an ad-hoc basis.

“It’s still regarded as something that can be done in your basement that doesn’t really matter,” he said.

Founder and director of Perth-based startup ClickSend, Matthew Larner, shares the view that Perth’s business community more broadly has placed insufficient value on IT services.

Having created ClickSend as a sole trader in 2007, Mr Larner said growth for the company, which provides a digital messaging hub for companies to connect with clients, customers and employees, was slow in the initial stages because the value of the services was difficult to explain to prospective buyers.

“If you were a small business and you wanted to communicate with your customers, you’d have to pick up your phone and ring them up to tell them their order had come in, or if you wanted to roster staff you’d have to call them up to see if they’re available,” Mr Larner said.

“With our platform, we solved the needs of that; we built in different channels like SMS and automated voice calls to automate the whole process.

“None of that stuff existed about 10 years ago; when we started, only a few companies did it and they didn’t do it very well.”

Infrastructure woes

Compounding these perception problems are technical issues, such as the capacity of Australia’s internet networks to handle more businesses going online.

As Mr Cornish explained, most home internet users would soon discover their at-home internet was not designed to handle a significant surge in usage.

“People traditionally used the internet to download a lot,” he said.

“Now, if you want to work and have a server talk to you and you talk to a server, it’s going to require a lot of upload, [and] you need to ensure you’ve got a stable connection [to do that].

“A provider can only do so much if everyone’s on it trying to upload [at one time].

“There’s going to be congestion.”

For its part, NBN Co has already anticipated that demand will increase, having announced earlier this month it would expand its network capacity and waive charges to service providers to offer higher speeds to customers using internet at home.

Some large service providers, such as Telstra, have made efforts to meet the anticipated demands on the network, freezing job reductions, hiring an additional 1,000 contractors in Australia to manage call centre volumes, and spending $500 million to increase network capacity.

“COVID-19 is having a profound impact on business across the country,” Telstra chief executive Andrew Penn said.

“At Telstra we already have more than 25,000 people successfully working from home, and we are supporting many of our customers as they grapple with shifting to working and studying from home.”

Despite those efforts, Mr Cornish argued local providers would be better prepared to handle technical difficulties if workers remained isolated for months at a time.

“Even if we work remotely, we’re still in Perth, we can mobilise,” he said.

“Businesses with offshore call centres don’t have capacity to work from home and they could be closing down [in the case of a quarantine or lockdown].

“If you’ve then got a mobile workforce … and something like this pandemic comes along, it goes a long way towards mitigating the risks.”

Opportunities

Though some established business could be caught flatfooted in the rapid shift towards working online and remotely, others have anticipated a growth in demand for IT services.

Deloitte managing partner Michael McNulty said the accounting and consultancy firm more than doubled its IT staff from 110 to 222 in the past year in an effort to offer a broader array of those services to the market.

Speaking with Business News, Mr McNulty said the increase in staff came from hires in the firm’s digital, analytics and enterprise technology divisions, as well as the acquisition of the Presence of IT consultancy in October last year.

“We recognised that, coming out of a downturn, there was a deficit in terms of investment in technology across all of the businesses in the state, irrespective of sector, and we were intent to ramp that up and jump ahead of competitors,” Mr McNulty said.

“We had a targeted investment strategy to bring those capabilities in; some of that was through acquisitions, but also through organic hiring of team members.” He said increasing the capacity for businesses to work remotely had been a major focus for clients in the past, and the firm was now able to consult on the technical issues involved with transitioning towards it.

“What we have is an end-to-end technology business,” Mr McNulty said.

“We can work with businesses around the connectivity issues associated with working from home, working our way through the myriad inter-operability issues.

“A lot of the systems that have been set up were not designed for the entire workforce to be at home at any given time, so how does that scale up for that eventuality?” Although technical issues will remain prevalent in the coming weeks, one of the most significant barriers some businesses will have to overcome is the shift in cultural mindset towards remote working.

Mr Larner, whose services already encourage communicating with clients and customers from a distance, said he understood the discomfort some businesses may have in shifting towards working remotely.

In doing so, however, he anticipates the practice will become far more widespread, as IT companies prove that many activities are able to be performed far more efficiently from a distance.

“[This pandemic] will force people to communicate online,” Mr Larner said.

“Staff will still want to communicate with customers and keep them up to date, and I think a platform like ours would be perfect for that.

“A lot of big businesses have had blockers to [working from home], saying the technology wouldn’t support it.

“Now, within a month, everyone’s been forced to support work from home or collapse, so it’ll be something that will need to stay.”