The future has started already! Welcome to the Digital Age. If your company hasn’t already started Digital Transformation, it’s high time to get started. So, to approach such a process of digital transformation? What are the most important issues that need to be tackled first? What are the QuickWins, the “low-hanging fruits”? How do I identify the digitization investments that make for a long-term strong positioning against competitors or for medium-term profitability? In short: How do I get my digital roadmap for the company?

The most important measures are described below, however, these are not to be carried out in the given order. These workstreams should be initiated in parallel, the digitalization path of a company is anyway a process which – in contrast to the introduction of software – is not completed at some point, but should become part of the DNA of a company; and with the generation of ideas one cannot start early enough anyway.

Books, fairs, crash courses: Examples of digitalization, basic technologies, inspiration

Everyone uses a smartphone, places orders on Amazon and messages via WhatsApp with family and colleagues. Some even have a “Smart Home”. Maybe, but if you send a company into the digital transformation, you have to go one step further and really understand the drivers, success factors and core technologies of digitization (without necessarily becoming a tech guru).

There are some very good books that describe global technology trends and also provide vivid examples of how companies have successfully undergone a digital transformation. There are not only good books on Artificial Intelligence, but also a whole range of well-prepared online courses – from a few hours to several days, for the manager to the developer. I myself did a udemy course on Artificial Intelligence with a practical part where methods of machine learning were implemented directly in Python. I do strongly recommend such a hands-on approach: It creates a solid understanding not only of the possibilities and limitations of a technology, but also of the effort required to implement it. Other important basic technologies of digitization are of course Internet of Things (IoT), the new mobile phone standard 5G (6G is already underway in the R&D labs) or the Blockchain. Anyone who deals with opportunities arising from digitalization for marketing and sales will come across books on Marketing Automation, Social Selling, Big Data and the like.

And for those who not only want input but also want to exchange ideas, there is now a large selection of trade fairs and events dedicated to the topic of digitization. These include, in Germany, for example the hub.berlin and the Digital X.

What’s the status quo in your corporate divisions?

What’s the starting point of your company in terms of digitization? Where is an urgent need for action? One of the first steps is to determine the status quo. What is the “digital maturity level” of the company? There are questionnaires from various providers for an initial assessment, which can be an interesting introduction to the topic.

Once you have kind of a gut feeling for the “maturity level” of different departments, then you’ll have to proceed with a more detailed analysis on process level. To what extent are work flows and working methods already digitized?. This applies to all areas without exception, from marketing to production and facility management. A digital expert is by no means immediately required for the first stocktaking, common sense is often sufficient. After all, it is not primarily a question of whether artificial intelligence or the block chain are already being used, but first and foremost whether processes are digital or analog, how much data is generated, how easily the data can be retrieved and the like. Ask questions about this! In the area of production, for example: How does the head of production receive daily figures on production, rejects, downtimes – are machine data automatically transferred to a production control center? How is the production scheduled? In the area of HR: Do personnel files only exist in paper form or already in digital form, based on OCR scans, so that the documents are searchable (full text search)?

Where to start with establishing the status quo? There is strong arguments in favour of doing the stocktaking along the “Customer Journey”: How does the (potential) customer find out about a product/service (outdoor poster advertising, cold call, ad words, chat campaign)? What sources of information can the customer use (website, FAQ, chat bots, etc.)? What options are available to the customer for an inquiry (email, telephone, online inquiry form, etc.)? With which degree of automation are inquiries / orders processed? And so on.

In a company with an advanced degree of digitalization, one will also ask the question, what percentage of the sales revenue is already generated from “digital business models”. What this is will be explained in more detail in the article “Business Models in the Digital Economy: From Fake Tech to Highly Scalable”, For example, business models based on the principle of the Sharing Economy: using instead of buying (Airbnb, Carsharing, Spotify), on the network principle (Facebook, Twitter, XING, LinkedIn) or based on the principle of marketplaces (eBay, matchmaking portals).

Collecting ideas and defining priorities

By the time you have established the status quo of your “digital maturity”, a number of ideas may already have emerged; and some ideas are certainly not new, but have been formulated before: A new website, the SEO campaign, a document management system, a digital patient file or even the digitalization of various file inventories or even the networking of all production machines (Industrial Internet of Things – IIoT). That is already a start.

Anyone who talks about a Digital Roadmap is talking about two types of digitisation projects. The first type of digitization project is the digitization of (existing) work processes or information: A website is revised (or newly created), customers receive information on the processing status of an order in a customer portal, machine data is automatically collected and evaluated (and thus maintenance cycles or production planning is optimized). This approach usually does not change the business model. If in future customers are persuaded to buy via chat marketing or orders are received via online form (instead of fax), this does not change anything about a company’s product.

If, however, an analysis laboratory no longer just performs blood analyses, but gains valuable medical insights thanks to the analysis/identification of correlations between biographical data (age, gender, lifestyle, etc.) and blood characteristics and can sell that information, then it is a new business model, a digital business model – welcome to the Data Economy! The same applies if a company no longer sells only woodprocessing machinery but – thanks to the evaluation of millions of production runs at thousands of customers (IoT) – also has the ability to optimize the woodprocessing depending on the type of wood, degree of drying, humidity and other parameters. If Carl Zeiss succeeds in establishing a marketplace for image processing with www.apeer.com, then of course this is also a new digital business model.

It should be clear that ideas for digitisation projects of the first type are easier to generate than those of the “new business model” type. In the first case it is sufficient to apply some basic principles to work processes: Automate, digitize, connect, use digital communication channels and the like. The development of new business models is the result of a far more innovative process.

You’ll realize, it’s not too hard to come up with numerous ideas for digitization projects. However, that’s not yet your Digital Roadmap. Once you have a first set of ideas, then the heavy lifting starts: It is necessary to estimate the feasibility, the implementation costs (both in terms of time and money), the return on investment or the added value of an idea, as well as its strategic relevance for the future success of the company.

The exchange with other companies (trade fairs, working groups) is helpful here, as is the involvement of external experts/consultants: You do not yet need a detailed cost estimate or a detailed investment calculation, a “T-shirt sizing” should suffice here: That is, a effort estimate according to the T-shirt indices XS, S, M, L, XL, XXL and so on. Based on such an overview of project ideas, a prioritization can then be made. And then – you guessed it – in the next step you have to go into a more detailed effort estimate and implementation planning and, if necessary, make another selection process among the remaining shortlisted projects. And this is precisely the result of the “Digital Roadmap”.

Align corporate culture and tools agility, innovation and more

Digitisation is usually associated with increased networking: Customers have numerous digital channels to communicate with a company – and also ABOUT the company (Google reviews, yelp, Glassdoor, kununu, etc.). The supply chain within a company’s value-added chain is becoming more closely meshed, information flows faster; networking generally leads to acceleration. This will be confirmed to you by anyone who is involved in systems theory.

Consequently, this means that a company has to learn to deal with this acceleration and has to be prepared for it. It is therefore no surprise that numerous companies are dealing with the buzz word agility, because agile methods (if used correctly) allow to respond quickly to changes in customer expectations, in the competitive environment or in the market. In the software industry, instead of the waterfall model, the agile project management method Scrum is used; tools such as Innolytics allow the efficient collection and evaluation of ideas; and with the software ServiceNow, workflows in the company are digitally detailed, documented and accelerated.

It is clear that digitization is more than just high-speed software, automation and everything in the cloud. Digitization is first and foremost a cultural change that requires change management and, in many cases, training. Digitization is also acceleration, and that also means: an acceleration of the development of adaptation to market changes, which is demanded of companies. For this, cultural change is primarily necessary; and here it can’t hurt to use the (entrepreneurial) creativity of employees.

Good luck!

Sebastian Zang
Author

The author is a manager in the software industry with international expertise: Authorized officer at one of the large consulting firms - Responsible for setting up an IT development center at the Bangalore offshore location - Director M&A at a software company in Berlin.