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What is 5G and How to Forecast the Impact on your Business?
Posted on 2nd March 2017 in Business
Written by James Marren
Time just flies. I still remember when my mother gave me 10p to call her in emergencies. We’ve seen exponential technological growth since then and the next big leap is just around the corner. Read this blog to find out some of the ways 5G will cause significant disruption so that your business is already prepared and ready for the future.
It’s always all about the numbers – 3G, 4G, 5G
These numbers are the mobile communication standards that allow for wireless internet access at much higher speeds. The 5G standard has yet to be defined, though reports suggest that in the next 5 to 10 years, 5G will offer you speeds up to 40 times faster than 4G’s 5 – 12 Mbps. The introduction of the 5G network is expected to create huge opportunities that will profoundly affect your business operations. Forward-looking organisations are already beginning to anticipate the impact of this technology while considering ways to leverage its potential.
The effect on your business
The huge jump in performance and speed of the 5G network will affect all businesses, with the faster network speeds inherently meaning things get done more quickly. New technology will grow out of these new capabilities and the first movers will be the ones who benefit the most.
Mark Zuckerberg, the Founder and CEO of Facebook, invested $2 Billion in Virtual Reality (VR) business, Oculus, choosing to buy the best team in that space, rather than catching up by trying to build it internally. VR is one area of tech that will rely on a faster network and, if our favourite apps are re-engineering their platforms, we’re going to need the speed increase. CCS Insight predicts that Virtual Reality (VR) device ownership will grow from 2.2 million in 2016 to 20 million in 2018. Smartphone-based devices represent the vast majority of this increase, so if your device is “hanging on in there” with 3G, it just isn’t going to cut it. The purchase of new equipment that is 5G-capable and compatible will be one of the biggest considerations when it comes to your cash flow forecasting.
Let’s review the impact technology is having on how you can pay your suppliers and how they buy from you: Mobile Payments. Is it something you offer your customers today? If not, are they part of your forecast? As underlying, supporting tech improves, functionality will also, and paying with your smartphone or equivalent will become the norm. Don’t put your head in the sand with technology developments such as this, get stuck in and update your systems. If it makes it easier for your customers to pay you, it’s a no-brainer.
It won’t just be your infrastructure and hardware that needs upgrading. Your marketing strategy and budget will need to factor in these changes too. One of the big predictions of 2017 was the rise of video, and there are massive improvements in video streaming ahead. The increased speeds and connectivity will mean you’re able to make video calls on the road and benefit from meetings that are shorter, with higher engagement, and communication that is better understood. Imagine a Skype or Zoom meeting that doesn’t drop out several times or a VR meeting where you can appear in person from wherever you are in the world!
Don’t panic, Forecast!
The good news is that you still have plenty of time to prepare. We didn’t write this blog to urge you to go and buy new hardware, we’ve done so to keep you informed of this exciting future development and, reinforce the importance of scenario planning and looking ahead.
Here is a checklist of things to consider and Forecast:
- How will an increase in efficiency affect your bottom line?
- What will be the cost of updating hardware?
- How much will you budget for new marketing strategies?
- How will you leverage the increase in your potential target market?
- How will you take advantage of the surge of new technologies that will follow the 5G release?
FUTRLI allows you to create your base Forecast and then layer other assumptions on top and link different Scenarios to it. Let’s keep it simple and just look at your expenses for now. For example, you could create two Scenarios related to purchasing this new hardware. The first investigates the impact of purchasing hardware for a third of your staff. The second could explore the impact for the entire team. With the click of a button, you can then link those scenarios to your base Forecast and you’re able to see, clearly, the differences between them. Remember, this is just an example and we encourage you to think of the wider impacts this will have on your business income etc.