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Digitale Transformation

Staying paranoid (the good way)

Shape up or ship out. For today's enterprises, keeping on one's toes has never been more vital, as the process of digital transformation continues to sift out any laggards. At the same time, this "digital selection" is creating new business models, ideas and solutions – the best of which were recently honored with an award by German business magazine Wirtschaftswoche.

10 Mar. 2015

Industry, retailing, the service sector – all enterprises and business sectors are currently confronted by a fundamental shift in the technology and consumer paradigm. There are no patent recipes here, and companies need to push the envelope in many different directions to deal with the growing slew of changes. Specialists have a name for the process –"digital transformation" – and it can spell the ruin of companies which are slow to react just as it can pave the way to the top for the nimblest ones.

The best example is Kodak: As the leading global manufacturer of analog color film with annual sales of up to $10 billion, Kodak failed to make the transition to digitalization in the Eighties and Nineties and ended up declaring bankruptcy in 2012.

In an empirical study, Neuland consultants and Wirtschaftswoche examined the factors which constitute a successful transformation strategy, along with the relevant fields of action. These findings were published in a corresponding "Digital Transformation Report", and the most successful companies involved in the survey received a "Digital Transformation Award" (DT Award).

New digital skills required

"Information is the glue of our society, but it no longer consists of wood and paper," explains Roland Tichy, former Editor in Chief of Wirtschaftswoche, in his Foreword to the Report. "Rather, it consists of pure information – unembodied, digital, in incredible quantities. The decisive factor is no longer the means of transport, i.e. the carrier medium and the delivery guy, but rather the weighting, sorting and quality of information. All of which is proffered to public opinion, which rules all our lives."

For companies this means taking advantage of all the available information and interpreting it in a new way. Technologies like Social Media, Cloud Computing and Mobile Enterprise are changing the options for customer communication and data processing. The size of a company plays only a subordinate role – among the winners of the DT Awards are small companies with just a handful of employees as well as large corporations. And these winners come from both manufacturing and the service sector.

The sole criterion for the award is that the companies acquire new digital skills for making their business "future-proof". The Report identifies a total of eight fields of action within a so-called "Digital Maturity Model", which was developed jointly with the University of Reutlingen. This model helps rate the "digital maturity" of an enterprise, based on which companies can discover new fields of action and concrete optimization potential in each area.

Eight fields of action for digital transformation

According to the study, there are currently three main directions digital transformation can take, with some blurring of the lines. "On the one hand customers are using digital transformation to enhance customer relations to promote aspects of customer communication, retention and image/loyalty. This puts the spotlight on digital product and service innovations, for example, as a substitute for established [analog] products and services," maintain the survey’s authors. One example of this can be seen at the municipal computer center for the township of Minden-Ravensberg, where IT service providers are pursuing a consistent approach towards digitalization, supporting municipalities in providing features like the online management of childcare fees, which makes it substantially faster and cheaper to provide information.

The second main trend in digital transformation involves the networking of clients. One of the DT Award winners includes the Munich-based Fidor Bank. This trend considers clients and their needs in developing new ideas, including the idea of a "personalized" interest rate for lines of credit: The Fidor Bank offers its customers the opportunity to actively participate in determining their overdraft interest rate.

The third area of digital transformation involves an increase in efficiency levels within an enterprise. German railway network operator DB Netz, for example, has developed a European-wide logistics platform, enabling streamlined booking for freight and passenger cars and improving the utilization of rail network capacity in the process.

The jury adjudicated more than 100 entries for the Digital Transformation Award, using the criteria of the Digital Maturity Model as a basis. Many of the contestants will be present as exhibitors at CeBIT. To download the complete Digital Transformation Report, register here .