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Digitalization planned, but not consistently implemented

Digitalization is at the top of the agenda for many companies. In times of rapid change, it is important to at least maintain the position in the industry or, even better, to become a digital pioneer and thus create added value for customers, employees and partners.

However, the current Bain study "Digital 360 Readiness Scorecard & Digital 360 Barometer" shows that currently only 5 percent of all companies actually achieve their digital goals. There are the following reasons for this:

  • The importance of digitalisation is still underestimated

  • Lighthouse projects are often realised instead of a systematic digital transformation.

  • The necessary digital transformation is usually only tackled half-heartedly

  • Implementation and competence building is too slow

A certain number of top managers only rate the urgency of digitalisation as moderate. Others believe they are already doing enough with a few isolated digital initiatives. Some are also of the opinion that your Chief Digital Officer (CDO) can implement digitalisation alone. Again, there are executives who have recognised the urgency of digitalisation but fail to launch it.

Today's decisions determine tomorrow's winners and losers. On average, digital pioneers grow 50% faster and are 30% more profitable than their competitors. With digitalisation, customer loyalty grows by a third, while process costs are reduced by half. Lead times fall by 75% on average, and complexity costs are 20% lower. These freed-up resources help finance digitisation. Companies should invest between 2-5 per cent of their turnover in digitalisation in the next 5-10 years, because a good digital strategy also increases the value of the company.

Companies are transformed at all levels with digitalisation. Digitalisation is a central element of corporate strategy and an efficiency enhancement programme. But digital transformation also leads to a cultural change in the company, which makes the company more willing to experiment and allows customer-facing employees in particular to act independently.

The fact is: it is time to act - and act now!

Systematically set up a digital strategy

Almost all companies have digital initiatives - but only a few have a comprehensive digital strategy. Only a comprehensive strategy makes it possible to set clear priorities and goals and thus lead the digital transformation to success.

As a rule, top management wants to bring the company quickly into the digital age and take advantage of the associated opportunities. However, in companies these activities are often fragmented into individual, only loosely connected lighthouse projects that are not oriented towards an overall strategy. Companies often lack the imagination of how the industry will change in the next 10-20 years. Mostly, within this scenario, they also have no vision of how their own company will change. Therefore, it is also not possible for them to systematically evaluate the operational and strategic potential of the digital age. In order for the digital transformation to succeed, the first step must be to present a perspective that is understandable to all stakeholders. In doing so, it is important to present both the future of the industry and the goals of the company. Only such a "digital ambition" makes it possible to set concrete priorities for action and investment.

Involve all stakeholders

Digital Ambition" also helps to involve all stakeholders in the digital transformation. This is of central importance. This is the only way to maintain the enthusiasm and willingness to change of employees, suppliers, customers, partners and investors - and to do so over the entire period necessary to establish and implement the fundamental change processes.

Digitalisation means the application of digital technologies and tools in all processes of the company. For this reason, a digital transformation must include the following core elements:

  1. Optimising internal value creation processes in terms of lead times, quality and costs.

  2. The redesign of customer interaction processes and touchpoints through the seamless integration of all communication channels (omni-channel approach).

  3. Expanding the product and service offering through data-based applications that clearly add value for the customer and thus open up new sources of revenue (for example, online services).

  4. New business models, for example IoT platforms, which open up new growth opportunities through software-based applications.

Many companies are not sufficiently aware of their digital potential. Some focus on individual topics, others are too focused on their industry in their thinking, which makes a neutral assessment difficult. With today's products, processes and services, the full digital potential cannot be explored.

In the course of digitalisation, processes and services are rethought and redesigned from the customer's point of view. To this end, the possibilities of digital technologies are used to reach and serve customers more quickly, comprehensively, individually and efficiently. So-called "game changer" applications can often only be identified when radically starting from scratch, i.e. "zero-based" and creative thinking. Faster processes, optimised contact points or the simplification of business transactions are typical starting points. In order to create all this added value for the customer, a profound understanding of the customer ecosystem is a mandatory prerequisite. Where "game changer" applications are found, they must be anchored as cornerstones of the digital transformation.

Channels and customer language

Products and services

Operational business

New business models

Digitisation changes customer behaviour and customer expectations

Almost all physical products are going digital

Digital collaboration and communication have a high cost reduction potential

Many individual digital solutions can often be combined to form new business models

Digitisation enables true customer lifecycle management

New value propositions are possible with digital innovation

Digital tools automate and network processes

Software and platforms become additional business activities

Digitisation creates new contact channels

Data can be used to improve the value of products and services offered

Digitally organised processes create transparency (e.g. 360-degree customer view)

New knowledge is created with data, which can be used for new offerings

Further customer segments can be addressed

With digital solutions, customers can often be served more comprehensively and better

Convince with transparency and consistency

Digital transformation is not a single project. Digital transformation is a long journey that the entire company is embarking on. Therefore, the journey leader must be the CEO - not just the CDO, who is, however, also urgently needed.

Often, it is precisely this simplistic view that becomes a problem in the approach. If digitalisation is outsourced to the CDO, but he has neither sufficient decision-making powers nor the necessary resources, failure is inevitable. The entire company must face the challenge of digitalisation. For this reason, it is imperative that the entire top management bears the central responsibility for the digital transformation. The CDO, in turn, is responsible for the digital strategy, concrete planning, budgeting, methodology, resources and communication. From today's perspective, the CDO and his team are in danger of becoming a "digital silo", because attempts are being made to lead digital disruption and innovation to success with classic corporate methods.

Digital disruption affects everyone

Digital disruption is a result of everyone in the company working together: The digital success of companies did not come from a brilliant single idea, but is based on a great willingness to experiment. Many of the ideas come from employees who are close to the customer. The CDO has the role of a catalyst who opens up the operational as well as the strategic goals of digitalisation.

In companies, a comprehensive and consistent digital transformation inevitably leads to upheaval. This affects all levels of the company. While investors and managers usually focus on the opportunities, employees are often unsettled by the impending change and try to maintain the status quo. Here, management has the major task of actively accompanying and supporting all employees in this process. Therefore, openness, transparency and active communication are crucial success factors for the digital transformation. Furthermore, it is also a matter of attracting and integrating talents with new competences. The most important factor in the digital transformation is still the human being. If employees cannot be inspired or motivated for the digital transformation, the digital transformation will be very difficult to master.

Rigorously redesign IT

Another stumbling block in companies is the heterogeneous IT landscape. Often there is a multitude of outdated applications and systems that have been created due to regional or business-specific requirements. Today, however, modern, global as well as scalable solutions are needed. In many cases, the desire for a 360-degree view of the customer already represents an insurmountable obstacle in the digital transformation.

At the same time, too much time is still needed for the standardisation of data structures and the corresponding migration projects. In order to significantly increase flexibility and the speed of implementation, old architectures must not be clung to. IT must be fundamentally redesigned. Today, the expansion of IT must go in the direction of a global unified and scalable platform. It also makes sense not to want to do everything alone, because many things can be better bought in or outsourced. Moreover, not everything should be done at once, because the perfect all-round solution takes too long. A crucial point is that the IT roadmap meshes with the digital priorities, including the necessary human resources and investments. Building blocks that should also not be neglected are service-based IT architecture, agile working methods, new organisational forms such as Digital Factory and powerful technology partners.

Digital transformation requires the commitment of the entire top management and the corresponding adjustments to the organisational model, including the CDO role. Furthermore, a change programme towards a digital corporate culture must be initiated. However, a comprehensive IT modernisation is also needed, aligned with the digital agenda.

Gaining momentum in implementation and competence building

The digital transformation is slow to get going in many companies and threatens to get stuck. Lack of funding, slow competence development and internal blockades are usually the reasons for this.

In addition to internal blockades that hinder the progress of every change project, digitisation is also hampered by the high financial requirements and the development of new competences. In most cases, digitisation is also in competition with other strategic projects. For the CDO, however, postponing the project is out of the question. A possible way out of this conflict can be self-financing. Consistent digitisation of value creation and support processes leads to considerable gains in efficiency and effectiveness. Thus, funds and resources are freed up so that the digitisation can be partly or even fully financed by the savings achieved.

Partnerships are in demand

In the course of digitalisation, companies need competences that are usually not yet available in the company. These can be competences in the area of software development, connectivity, agile project methods or customer-centric designs. The organic development of the necessary know-how through the further training of one's own employees usually takes too long and hinders a quick implementation. For this reason, it is advisable to build up only the competences that are important for strategic differentiation in-house. Uncritical know-how can also be acquired for future positioning through partnerships, joint ventures or acquisitions.

Motivate employees sustainably

Targeted change management is needed to overcome internal blockades. Change always starts with getting people excited about the vision. However, many companies are already failing at this. On the one hand, the visions and messages of top management are too complex, and on the other hand, top management often does not communicate them personally and regularly. In some cases, top management does not manage to monitor the success of the measures on an ongoing basis. In addition, top management repeatedly fails to reward employees with immediately effective incentives for the behavioural changes demanded of them.

Platform and partners

Data and analytics

Information technology

Operating model and collaboration

A system of partners expands one's own possibilities

Data analytics can already improve the value of many services today

IT systems can significantly optimise digital collaboration and reduce costs

New working methods enable faster response times and creative experimentation

Using your own and external platforms makes it easier to win and keep customers and partners

Data ownership issues, privacy policies and existing architectures are barriers that need to be overcome

Modern IT systems ensure significantly higher flexibility

Integrated process software creates transparent processes and allows a 360-degree customer view and smooth omni-channel service

Support from actesy

actesy makes complex data simple. If you need support in implementing your digital transformation, we can gladly accompany and advise you in this process.actesy AG was founded as an HSG spin-off to democratise data access to any system and to enable cross-system data orchestration. actesy is a complete integration and data orchestration framework that connects and orchestrates data and systems regardless of the data source and the underlying technology. This ensures that you always have your data in the right system and data format for your digital processes.


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