For a long time, the term “digital transformation” had a permanent place in language usage and is considered as heading for a wide variety of topics in society, business, and politics. In general, digitalisation can be described as the conversion of existing non-digital systems, processes, and products into a digital form.
Real-time KPIs and advanced knowledge generation, which are a large part of digitalisation, can be used to implement a wide range of advantages such as greater efficiency and higher quality. This is also reflected in a reduction in cost and an increase in sales.
A lot will depend on the pace of digitalisation in the coming years. In the past few months, the Corona crisis has shown particularly clearly how important flexibility can be. In any case, digital applications, which will make the transition to Industry 4.0 possible, are the most important factor to remain competitive.
Digitalisation is spreading
Research on the pace of digitalisation by the Fraunhofer Institute for Systems and Innovation Research showed that there was an overall increase in the usage of basic applications. Many companies took fundamental steps towards digitalisation. Around 71% of smaller companies are already using basic applications. An increase of 15% has been recorded during the past five years. In contrast, there was only little statistical progress in the digitalisation for medium-sized and large companies, by today’s standard, more complex technologies have been considered less.
The Fraunhofer researchers have also identified significant differences regarding the individual industries. Vehicle construction and electronics industries have been pioneers for a long time. From this high level, however, it is difficult to introduce additional innovations. Therefore, it is not a surprise that the lead over other industries has narrowed.
Medium-sized companies, possible pioneers of digitalization
The digital transformation offers medium-sized companies a great opportunity. The constantly newly available digital technologies and processes can be used to digitize individual processes, entire business areas, or large parts of companies.
Starting with addressing prospects and customers via online marketing channels, digital sales platforms, controlling and optimizing production processes, or setting up new digital products – the possibilities are diverse and are more or less attractive depending on the industry and competitive situation.
The great advantage of medium-sized companies, compared to young start-ups, is the great experience in the market and productional environment as well as the availability of existing investment funds. Compared to large companies, medium-sized companies can convince with short decision-making processes and entrepreneurial action.
Digitalisation offers a special opportunity for Medium-sized companies, which are traditionally often well represented in their own region, to expand their market and operate internationally.
With the help of expanding communication and information channels, companies can reach target groups all over the world. Building an international network opens a completely new market potential. In this way, medium-sized companies can assert themselves alongside large corporations and continuously expand their own customer spectrum.
Challenges and risks of digitalisation
A risk of digital change is that competitors apply the opportunity of the new technologies upfront – another reason to keep up with digitalisation and to introduce it effectively and efficiently in your own company. However, most companies face a multitude of challenges, as demonstrated by a publication by Accenture. A lack of digital competence and willingness to invest as well as the rigid division of labor between departments leading to less successful digitalisation projects.
However, taking these challenges into account creates good conditions at a strategic level. Successful digitalisation also depends on how the employees are taken along on the path to change and how to recruit competent specialists. Ultimately, companies can only emerge from this phase successfully if the various aspects of digitalisation are part of a long-term corporate strategy.
Companies can take advantage of their markets and business area by using new technologies. In this way, firms can maintain their own market position in a globalized economy and use their individual strength to gain a competitive advantage.
The combination of the classic strengths of medium-sized companies and the advantages of technological progress can optimize the supply chain as well as making processes more efficient. However, this implementation will only succeed if companies perceive the relevance of digitalisation as a holistic, cross-departmental task.
MA Data Consulting uses the latest, innovative tools, techniques, and methods to successfully accompany our customers in digitalisation.
With our consultants, technical expertise, and project know-how, we create sustainable business value by implementing exciting projects.
The economy is undergoing a rapid change, which makes it necessary to break new ground. We would be happy to support you on your path to digitalisation and would be happy to speak to you personally.