And again, the next pink mammal has been passed through the community for several years. We can tell from the presence in online and offline media that interest in the topic is to be aroused. So what does the employee-heavy backbone of the German economy – the Mittelstand – think?
The interests of the parties in this game are, as always, fundamentally different. While the media landscape needs a new quadruped every 3-5 years to put in front of their cart (think of very early on with Analytics, a bit later with SOA and Green IT and most recently Big Data), the typical entrepreneur has a fundamentally different claim.
The German Michel
German SMEs operate in the area of tension between their markets, and try to plow the area in between with as much added value and as little effort as possible. Of course, this can mean using an SOA platform or Big Data to analyze customer or production data, but for SMEs, which are not spoiled by margins, it cannot be a matter of simply being at the forefront of technology without productive added value.
Nor is it easy to continue operating a business that may even be successful. The founding generation is beginning to wish for a little peace and quiet, and yet there is often no one there to take the helm. With regard to digital technologies, this has two consequences: there is a generational lack of know-how, and it is difficult to sustainably manage the topic on a long-term basis if you yourself only want to be around for two more years.
And so some people look at the topic of digital transformation, i.e. the change to a digital company, with half interest and half astonishment. What is meant by this is simply the move away from notes and blackboards to – ideally process-integrated (Industry 4.0 – I hear you) – digital systems.
Sounds great, but what really matters is what comes out at the end.
What is the outcome?
The goal of this digital transformation is to make value chains in production more transparent, to reduce costs, to quickly uncover sources of error, to guarantee customer service at any time anywhere in the world, and to use real-time capabilities in order to be able to align oneself more quickly and more unerringly with the market. This all sounds fantastic at first, but it gets difficult at the point where concrete planning is required.
The benefit for the company depends fundamentally on the individual company situation. The following questions can help to identify essential cost and benefit potentials. The decisive factor is where my coat „burns“ as an entrepreneur today.
Value creation
- How much can I gain by networking planning, procurement, design, production and sales?
- What about the supporting processes, such as finance, controlling, IT – is there much to be gained by integration?
Organization
- How well does my management know about modern business requirements and the corresponding technologies?
- What data do I have on the company and its environment, and how well do I use it?
- What about the applications currently in use, what is the status here?
Horizontal integration
- How much does digitization of my processes benefit my partners? (Purchasing partnerships, development partnerships)
Vertical integration
- Does it help me to collaborate digitally with suppliers? (Purchasing, products, contracts, specifications, speed)
- Does it help me give my sales force and customers digital access to my processes? (Service, repair, account management, sales, catalogs).
- Are sales markets relevant to me that I need a digital process landscape that is as seamless as possible to handle?
- Are there even digital business models that make sense in my product portfolio?
If the entrepreneur first obtains an overview of the status quo, he can use this (and the countless case studies out there) to consider the extent to which digitization can be worthwhile for him. If he identifies one or more topics as exciting, his individual digitization strategy can grow from this.
Bread and butter
With a few resourceful employees from different levels, an idea is developed as to how digitization can be approached in principle. Which processes are particularly in need of optimization? Where is work, time and money currently going to waste? Where is the greatest potential for IT-supported processes and integrative working? This idea is then coordinated with management so that your executive level is on board from the very beginning (a well-established goal-oriented bonus system also works wonders here).
A steering committee is then set up with the aim of establishing a project portfolio to implement the measures developed. The rest is then just classic program business:
- The individual projects are defined, provided with goals and resources, and prioritized (not too long, rather agile).
- Depending on the size of the company, one takes more or less of this stock at the same time and implements it according to priority
- Sharing experiences within the program (between projects) is critical for consistent strategy tracking.
- Regular monitoring of projects is the basis for timely detection and resolution of problems
Depending on the state of your IT infrastructure, you should receive regular, preferably automated, updates on the progress of your program. An integrated project management system with (cross-project) program functions covering planning, work packages, resources, deliverables, etc. is ideal here. Showing the flag personally in program and projects from time to time keeps motivation even in difficult phases.
You may have noticed, this post recommends a rather pragmatic „just go for it“ approach to digitization. In fact, there is no general silver bullet either. Often, it is simply important to think about the topic, discuss it internally and in the market, and then implement the identified potential.
We wish you every success in this endeavor,
