Digitalization: What is important?

Digitalisierung: Was ist dabei wichtig?

Digitalization: What is important?

Table of contents

What does digitalization mean?

Many people often understand digitalization purely as the digitalization of work processes. Rather, digitalization is a realignment of the company. It is more of a means to an end and not an end in itself.

The new corporate strategy is about revising business models or developing new ones. Work processes are not only transformed from an analog format into a digital format, but rather also reformed.

Reasons for digitalization

The primary aim is to better meet the needs of customers. If more time is gained through more efficient work processes, it can be invested more in customer care. A prime example is Amazon, which is not so popular because of the way its shop is presented, but rather because it has optimized the value chain.

As a medium-sized company that has been in existence for a long time, it is therefore important to have the courage to prove yourself and to re-form, as sooner or later the competition will do so anyway. Companies from other industries are suddenly offering products and services that are eating into the sales of established companies. Companies that were previously competitors are becoming partners, and vice versa. Niche providers are outperforming long-established companies.

There are plenty of current examples of this:

Some advantages of digitalization
  • Increased efficiency through faster information and communication technology
  • Optimization of workflows
  • Cost reduction through the networking of production, information technology and the internet
  • New opportunities for customer acquisition – online
Digitalization as an opportunity

In addition to the pressure from competitors, digitalization also offers you many opportunities. You can make your work processes more efficient, allowing you to spend more time on the important areas of your business. The route planning of field staff can be made more efficient, not only to save time but also to generate fewer unnecessary vehicle operating costs. Machines can also be used more efficiently. Through intelligent information management, capacity utilization could be increased.

If you also enter the online business during digitalization, you will enjoy some advantages:

  • Virtual decision-making aids through comparison portals, blogs, test reports
  • Referral marketing on the web – network and benefit from satisfied customers
  • Testimonials that will attract even more attention
  • More visibility - linked websites on the internet
  • More transparency - provision of information

DThe possibilities are almost endless.

» However, you should not simply start digitizing every single work process, but first consider how to align your company's strategy for the future. «

Should I go in the direction of online sales? Should I perhaps concentrate on fewer products/services? Are there new service and business models that would fit with the rest of the company? Does this or that work process still make sense when it comes to a switch to digital?

Once the big questions have been answered and the “new corporate strategy” has been defined, you can start the digital transformation. It is important to know that the conversion or optimization is not a one-time process, but rather an ongoing process. Or as Dirk Beckmann puts it: “Whereas the world used to be solid and full of certainties, today it is fluid and constantly in motion.”

4 risks that digitalization entails
  • One of the biggest risks of digitalization is certainly cyber security. Studies show that hacker attacks increased by 52.6 percent from 2016 to 2017. Source: Futurezone.at
    Companies are therefore faced with the challenge of protecting their data accordingly.
  • The expansion of infrastructure, such as smartphones, tablets, cables, transmission masts, etc., requires a lot of resources that consume vast amounts of energy. Of course, digitalization will make other areas more economical or eliminate them altogether. However, it is still questionable whether the energy balance will deliver the same result in summer.
  • Digitalization will also mean that some jobs will no longer exist, sooner or later. However, as with every revolution, new jobs will also be created. Whether the new jobs will be able to replace the old ones entirely is questionable. After all, the civil service sector is relatively large. Digitalization will create enormous potential for savings in this sector.
  • Online retail is putting more and more traditional stores under pressure. Among other things, the throughput advantage of an online retailer means that margins in stores have to be reduced.
Measures to successfully master the digital transformation

The most important thing when taking the step towards digitalization is to realign your corporate strategy. One way to do this is to look at the company from the customer's perspective, with their needs and consumer behavior. The aim should not only be to change internal structures, but also to reform the interfaces to the outside world.

One way to create an interface to the outside world could be to connect to the supplier's system in order to generate automatic deliveries.

It is also important to have a presence on social media. Many customer enquiries now take place via Facebook. You can find out which channel works best for you by using split tests with the respective providers.

If you do not yet have an online presence, you should at least implement an information page in a design that is suitable for the company in order to ensure greater transparency and visibility.

Acquiring new customers: digitalization as a means of customer acquisition

Customer behavior has changed noticeably in recent years. The faster you get to your goal (service, product), the better. Even though many people would prefer to shop at small retailers for ethical reasons, most still order from Amazon for reasons of cost and time.

With tools such as e-commerce, online marketing and the like, you can bring your company even closer to the customer. This also creates a new way of communicating with the customer. On the one hand, this should provide the customer with faster access to information, and on the other hand, it should enable faster purchasing or contact.

5 misconceptions why companies are not taking the step towards digitalization
  • Digitalization is only a passing hype. - It is unstoppable. You can't stop the wind, but you can set the sails correctly.
  • My product/service is not suitable for digitalization. - Digitalization is creating new business models. It is important to rethink in order to open up a new distribution channel.
  • The change is not economically viable for my company. - Part of digitalization is often about making processes more efficient in order to achieve savings.
  • I have to hire new IT staff. - Often, it is sufficient to train existing employees.
  • The economy is booming. Many companies therefore see no need for action. - Times will change again. Those who do not position themselves well in good times will lose out to the competition later.
The 7 main challenges of digitalization
  • Flexible company organization - Even large, sluggish companies have to become more agile in order to adapt to constantly changing challenges.
  • Short response times when processing orders - Every step in the digitalization process must be aligned with customer needs. One of the biggest needs here is response time.
  • Infrastructure - Although the expansion of broadband capacity iis already underway, it will not meet the demand that will exist in a few years' time.
  • Shortage of skilled programmers - Due to the broad restructuring of the economy, programmers are in greater demand than ever.
  • New job profiles - new business models have new requirements. This is creating jobs that have never existed before.
  • Implementation often proves difficult, as the know-how partners for successful implementation are often lacking.
  • Open-minded, courageous entrepreneurs who dare to take the step into digitalization.

Create your website with us!

We want to support you in setting up or expanding your online presence. Contact us and find out how we can help you!