Now more than ever, UK companies will need to invest in innovation to see them through this hugely challenging crisis and drive their post COVID recovery.
A strong digitisation strategy and the adoption of digital enabling technologies can make business processes faster and more efficient, create value-add ways of meeting customer needs, open up new revenue streams to the business and drive productivity. This will in turn shorten the recovery phase, increasing resilience to future disruptions.
What is Digitisation?
“Digitisation” covers a wide range of initiatives, but at the very core it means making more effective use of software technologies. This may be as simple as making more effective use of software applications in; gathering, analysing and using information to support decision-making processes, automating business processes to reduce errors and improve efficiency through to increasing connectivity across plant and equipment both inside and outside the business to improve customer services or your company’s ability to service client needs.
The advances in digital technologies brings the idea of the “smart factory” ever closer. While the concept has been around for a number of years, to many, it remains a vague and nebulous concept. In simple terms it is the increasing proliferation of sensors in the manufacturing environment providing greater levels of information and understanding of what is going on, supporting better informed decisions and control of manufacturing processes.
Smart Factory - a case study
A good example of this is an English industrial weaving company which recently adapted a manufacturing execution system, originally developed for automotive manufacturing, to serve its own needs in an industrial weaving environment.
The introduction of sensors and monitoring technology throughout
the process line, and the manipulation of the software application to record performance relevant to weaving, has given the company much more information on manufacturing performance such as dynamic stock reporting, as well as machine loading and availability information. This in turn has allowed the management team to improve its raw materials stock holding and increase its plant utilisation levels.
The “cherry on the cake” is that all of the above activities made the company eligible for R&D tax relief and they realised £19,000 tax benefit in a single year.
The many benefits of improved connectivity
Investment in improving connectivity between disparate devices and applications (developing the Internet of Things or even the Industrial Internet of Things) can have significant impact on internal efficiencies and enhance customer service.
For example, a UK-based logistics company has over the last two
years invested heavily in improving the communications functionality
of its legacy inventory tracking system, allowing customers to track the movement of their goods, across a number of carriers and transport modes, on any mobile device. This digitisation project also resulted in new automated invoice production and presentation, a bonus to both the logistics company’s own staff and its clients. .
Another bonus was being able to claim £148,000 in R&D tax benefit on their qualifying costs.
Servitisation through digitisation
Digitisation can lead to the development of new service concepts, and the increasing “servitisation” of the manufacturing economy, as one lucky company found out.
The company was looking to develop an asset register and audit application to comply with stringent international corporate governance laws. They developed a web-hosted application, currently being applied in oil & gas but equally appropriate across global capital-intensive sectors, such as construction and shipping.
In addition to creating the first of its kind subscription service, the company successfully received £37,000 R&D tax relief last year, for its efforts.
These are three quick examples of how businesses in the UK are using digitisation to significantly improve both business efficiency and customer services AND receive a nice tax benefit back into the company coffers courtesy of HMRC.
We can help.
Securing the right funding for your innovation project is vital to its success and your continued investment in R&D. ABGI is here to help. We help our clients accelerate their innovation activities by identifying and securing the right innovation funding, through grants, tax incentives and commercial funding.
ABGI-UK can review your projects and identify the most appropriate forms of funding and assist in the application process, to support those projects from idea to market readiness and beyond .
In the FINAL PART of our Guide to “Innovating your Way to business Recovery”, we explore the concept of ‘Advanced Manufacturing’, which areas are most likely to deliver significant benefits for UK businesses, and where government-backed tax incentives could create a crucial financial boost, through a tax repayment on funds spent on innovation projects.