Hardly any other buzzword is mentioned as frequently in media reports on the German economy as the word digitalization or industry 4.0. Only a few know what exactly lies behind it and even less how to deal with it. But what steps must be taken to embark on the path of digitalization, or rather digital transformation? This article is intended to explain this in simple terms.
Digitalization and Digital Transformation
These two terms are often mixed. The german Wikipedia writes on the term digitalization:”In a broader sense, the term also refers to the transition to electronically supported processes by means of information and communication technology.” What is now still happening manually is, as far as possible and reasonable, automated. Digital transformation stands for the fact that all structures of a company are subject to change due to digitalization. This change will continue as long as the possibilities of digital tools change. It is therefore an ongoing process that requires permanent adjustments of the strategy, the business processes and thus also the working world.
The terms are often associated with the following keywords:
- Industry 4.0
- Cloud Computing
- Internet of Things (IoT)
- Big Data
- Smart Home
- Smart Factory
Many reports suggest that only those who use these techniques and use terminology can truly digitalize. It is often said that only new, disruptive business models will be successful. In return, however, this would mean that all existing business models no longer have any reason to exist. However, digitalization does not serve an end in itself, nor does it serve to make everything that exists lose its justification. In a company, it is only used to lead it into a successful future.
Digitalization is a business management task
Technology is merely the tool of a digital transformation. It is important to know what options are available to develop a vision. Only when you have defined your route do you know whether and in what form these options will be used. The goal of digitalization is to automate routine tasks. This creates resources to provide your business partners with better service or better conditions. Technology is only a means to an end.
Develop a vision of what your company is aiming to achieve
How can you best support your company’s strengths with new technologies? Is it perhaps necessary to change the business model, since digitisation is creating new markets and old ones are no longer generating income? How can you make optimal use of your company’s core competencies in times of constant change?
The radical approach is defined by the economic word of the year 2015 in Germany: Disruption. The FAZ:”A good idea breaks down entire industries. The word for it is disruption. Managers can get high by talking about this. “As a result, success will only be achieved in the future if they completely reinvent themselves, as otherwise their business will be completely replaced by new business models. This is true, but it has nothing to do with digitalization. The automobile has already replaced the coaches as far as possible and was the introduction of fiat money not already disruptive? Or is it simply a further development?
Don’t be misled, disruption is neither new nor imperative. However, it is an option that exists and that needs to be examined in the context of a major technological change. There will be changes, especially in the small ones, which will add up to a big change.
Take a look at the possibilities that technology will offer you in the future. Check how these options can support your services even better and don’t hesitate to question parts of your services. There is no one-stop shop for the development of new ideas. Look for the discussion and let us advise you. The view from the outside brings new ideas and knowledge, because the diversity of possibilities is no longer manageable by some.
It is also about serving your business partners in the best possible way
Become aware of the requirements of your business partners. By this I mean not only your customers, but also your suppliers and other partners. A supplier will also make a lot more of an effort to work with you if smooth processes are guaranteed. And that’s where the road starts.
The technical possibilities of today and the future require high speed and flexibility. Business partners demand information on all possible channels and platforms. If you don’t develop a sensible strategy now, you have the best chance to get lost. He who does nothing loses the connection.
In this sense, employees are to be understood as business partners and their connection to corporate processes will also change. The topic in this case is “Digitalization of the working world”. I will come back to that in another article.
Strategy as a central theme
You know where to go. Now is the way to define the way forward. Define which processes, when and when to change and which digital measures are necessary for this. One possible approach is to start where the highest added value can be achieved. Based on this, further optimization will be carried out. How your strategy should look like is ultimately an individual decision. But don’t focus on your strategy and stay flexible. It is quite conceivable that new possibilities or sudden borders force you to make changes on your way to the goal. In the end, it’s like always: There are doors that close and others that open.
Define your processes
The path is defined by your strategy and therefore it is determined which processes are to be optimized or redefined. Now it is time to take full advantage of the latest technical possibilities. Now it is necessary to automate and monitor processes as far as possible.
- Why should employees be concerned with checking the validity of documents and monitoring deadlines?
- Can documents and information not be automatically forwarded to where they belong?
- Do you really have to program a component drawing directly on a machine or can it be transferred directly?
- Connect different communication channels to your system to keep all data together.
- Not every status you report must be determined manually.
These are just a few examples of where your processes can be optimized. The technology serves as a tool that supports optimization.
Use flexible technologies
Use all available resources as long as they are organisationally and economically meaningful. It is important that you use solutions that are highly flexible. Systems that have established themselves and optimally support your business processes can be retained. New solutions are to be used where there is a need for optimisation, which ideally can be 100 % docked. You should be flexible enough to be able to reflect changes in your requirements at any time.
It is often suggested that due to rental models only a change from application A to B offers this flexibility. However, it is not mentioned that the migration of the data, as well as a possible loss of information and history is consistent with this. In addition, all existing interfaces must also be adapted. These things must always be taken into account when new solutions are to be introduced. Every solution has its advantages and disadvantages.
And when you’re done with it …
… then be prepared for the new opportunities that await you in your business. Digital transformation is not a finite process. This was already the case before digitalisation, but the cycles are getting shorter and shorter at the moment. As a result, you need to be flexible (see above).
In fact, the process of digital transformation is not new. Steps must be taken that were also necessary before digitalization in order to develop a company with high added value. What has changed are the tools and the possibilities associated with them, and thus the newly defined requirements of the business partners. These tools will also change the way you work. You can follow the following 4 steps:
- Development of a vision
- Drafting a strategy
- Definition of the new processes
- implementation of processes in a flexible environment
This is not a simple project, but rather a permanent process that is concerned with the development of the company.
A successful digital transformation can only be managed by the company’s management, as it is a matter of the further development of business processes. Nowadays, no one is able to see and control all the requirements and possibilities on their own. The market is global and in a state of rapid change. Use the knowledge of many people to support your company’s special know-how in the best possible way. This includes corporate IT as well as service providers and manufacturers in the digital and business environment.
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