ELO CEO Karl Heinz Mosbach on the Coronavirus Crisis
Interview with ELO CEO Karl Heinz Mosbach on the Coronavirus Crisis
Though the world is currently in a virtual state of shock due to the COVID-19 crisis, Karl Heinz Mosbach, CEO of ELO Digital Office, expects a positive effect once the situation has been resolved. In this interview, Mosbach discusses the possible consequences in the ECM industry as well as anticipated changes in business, politics, and society.
Q: With a few exceptions, the financial and economic sectors are experiencing major difficulties due to the spread of the coronavirus. What impact do you think the COVID-19 crisis will have on the enterprise content management (ECM) industry?
Mosbach: Unfortunately, quite a lot of companies are fearing for their very existence and many people will be left unemployed. We can only hope that policy makers will be able to cushion this, but it will be impossible to avoid these negative effects entirely. Of course, this development also has an impact on our business. At the moment, everyone is in shock and no one can estimate the extent, so business leaders are cautious about spending. They’re looking for investments that can be pushed back – that’s what everyone is doing. We are very fortunate that we have large reserves and are very well positioned in terms of capital. However, the crisis has also had a negative impact on us, and we are noticing this within our projects. For example, a Scandinavian company was planning an update project, which has now been delayed because employees are working from home and, of course, you don’t want to roll out new software during an ongoing state of emergency.
Q: What does work look like for ELO Digital Office in the age of COVID-19?
Mosbach: Almost our entire team is working from home. Thankfully, we can use our collaboration solution “ELO Teamroom” to work in virtual project rooms, and can even invite external service providers who wouldn’t usually have access to the ELO system to participate. This saves us a lot of e-mails and effort because we can move communication to the ELO Teamroom. Plus, we can remotely connect to customer systems, develop them further, and customize them.
Q: If you look a little further forward, what consequences do you expect?
Mosbach: In a few months, when the situation has hopefully been resolved, we hope to see a positive effect, and even an increase in demand. It will then be up to us to present our prospects with attractive offers. In retrospect, companies will recognize the need to go digital – if we are hit by another wave like this, society simply needs to be better prepared in terms of digitization. However, we and our partner network have to allocate our resources to meet this demand, as there is always a certain amount of service involved.
Q: How do you think other ECM providers will cope with the crisis?
Mosbach: There are various distinguishing criteria here, such as sales and product strategy as well as legal form. A company that sells only through direct sales is sure to experience a sharper decline because its cost structure is different. After all, these companies still have to cover their personnel costs, and would be in big trouble with projects going on hold. If all employees are at home, this could get quite expensive. By contrast, our German sales alone is spread across more than 200 systems specialists. It is unclear though how large corporations such as Ricoh or Kyocera, which took over German ECM suppliers last year but are primarily focused in other areas, will respond. If companies are forced to economize, there is a chance that they will save their main business, looking to their new segments to cut costs. ELO is in the beneficial situation of being led by its founding shareholders, who have a vested interest in continuing to successfully manage their core business.
Q: Some companies – especially small and medium-sized enterprises – are still somewhat skeptical towards cloud-based ECM solutions, but such solutions offer a high degree of flexibility, which is exactly what is needed in times like these. Will the COVID-19 crisis change attitudes?
Mosbach: Presumably, the COVID-19 crisis will lend wings to cloud strategies. Right now, digital solutions are needed very quickly to keep businesses running. This is faster with cloud solutions. Some companies that have been putting it off may now be much more open and think: hey, if I had my solution in the cloud, my employees could work faster and more efficiently from home.
Q: In general, how would you rate the current situation?
Mosbach: It is becoming clear that this virus is stopping capitalism as we know it in its tracks. In a crisis like this, we suddenly feel that constant streamlining is of no use and that we have nickel and dimed ourselves to death. Our entire focus was on efficiency and maximum profit. Everything is at its limits – doctors, healthcare, and even areas such as education administration. We realize now that people we have treated poorly or underpaid are needed more than ever. We have to rethink and better regulate certain areas. All industries deserve good pay and recognition. Digitization can provide staff with relief and assistance while ensuring progress if politics and society do their homework and manage properly. The assumption that digitization is destroying jobs is a myth. Digitization is changing our way of working, enabling us to streamline processes and save costs. But if we restore these values and focus more on neglected issues such as education, healthcare, social welfare, and much more, we will almost always be able to achieve full employment. On the contrary, we will see a situation where we are short of millions of workers because we do not have enough people to fill these positions. Of course, this is provided we act in due time, plan for the long term, tackle issues, and do not focus our decisions on one event – as we currently are.