Tag Archive for: Digitization

Three reasons why established companies have difficulties with digitalization

** Dear reader, this is an automated translation of the German blog post for your convenience. Please switch language to German to see the original contents. **

They are successful in their business, often even market leaders. However, this is no guarantee for established companies to continue to occupy a leading position in the market. On the contrary, many of the mechanisms that have been intro- duced for years are more opposed to successful digitization.

1. Trapped in the hamster wheel of productivity

Many companies are so successful at the moment, because they have continuously increased their productivity over the years. Digitization is often seen as a further possibility for increasing efficiency. In this sense it is only used as a further increasing use of IT to increase efficiency.

However, this leaves the greatest potential unused. The real chances of digitization are to try new things. Eliminate old pranks, fundamentally question internal processes, and implement completely new business models offers the opportunity to continue to gain relevance in the future and to add further successes to the successes to date. Resting on what has been achieved can become a problem in the longer term if the competition moves past the company at high speed.

2. Lack of courage to decide

An elementary element of digitization is the high speed of the implementation of ideas. Nowadays, it is clear that the big ones do not necessarily eat the little ones, but the fast ones the slow. Accordingly, many companies are trying to speed up their implementation projects. For example, agile methods are applied or, in the simplest case, the timetables for ongoing initiatives are streamlined.

What is often left out is to adjust the speed of the decisions to these processes. For instance, managers often require additional information in lengthy loops to ensure absolute security for their decision. This one-hundred percent security is generally not available, which means that the decision-making process takes a long time. This results in an unclear direction or often missing resources, which makes the actual goal more difficult to achieve.

We therefore advise clear decisions – even under uncertainty. Here, entrepreneurial thinking is required, whereby the management also has to take controlled risks.

3. A technically oriented IT

For many years, it has been proclaimed that IT, as a partner to the business, is to drive the development of the company on equal terms. IT is often underestimated by the business and not taken seriously in its role. On the other hand, many IT departments or internal IT service providers often still think too technically. Projects are then seen as success if the technical components have been delivered as agreed.

However, what is often missing is the business view of IT on a comprehensive solution. This is why many departments are turning away from their IT and are talking directly to providers of cloud software. These promise the desired performance, without messing with technical details. This is certainly also problematic when one considers the larger context of a company’s IT. But in order to gain the trust of the department, IT departments must learn to assume a holistic responsibility for problem solving.

Thus the business should be actively managed through digitization projects. Topics such as master data should be addressed at an early stage, and experienced colleagues should give active help, rather than relying solely on agreements in terms of duties or duties. (Due to the novelty of the topics and the continuous learning effects during the implementation a complete pre-definition of the target state is not possible in digitization projects.)

Modern technology is the key to digitization, which the companies really want, are the new possibilities created by it. This is to be realized.