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The Two Faces of Digitalisation – commentary on the Bitkom study.
German companies have now recognised the great importance of digitalisation, but according to a Bitkom study, only 50 percent have anchored it in their business strategy and made personnel adjustments. However, this may not be absolutely necessary, says Stefan Jesse, IT Business Architect and Managing Director of the Bechtle Mannheim, because digitalisation has several dimensions. He advises putting the digitalisation of business processes at the top of the CIO agenda this year.

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Short summary of the study: The two faces of digitalisation.

Customers are changing their habits in the digital age, and new competitors are turning markets on their heads with data-driven business models. German companies have also recognised this, as our current study, which we have prepared on behalf of Tata Consultancy Services Deutschland GmbH, shows. However, only every second company comes to the right conclusions: Only 50 percent have anchored digitalisation in their business strategy as well as in their personnel.

 

The incentive for digital projects and initiatives usually do not come from the boardroom. It’s mainly the CIOs and IT departments that are driving change. Still, half of the respondents say that existing product and service portfolios are changing or becoming more individualised as a result of digitalisation. Marketing has a leading role: Three out of four companies optimise their campaigns with the help of intelligent data analysis.

 

In many places, "Security First" is still the highest priority: Increased investments in IT security solutions are planned the most. In doing this, companies should primarily think about their future viability and, for example, involve their customers directly in product development in order to individualise their goods and services on the basis of data.

 

It’s also the right time to think about social media strategies and mobile marketing as strategic levers. Digital platforms for integrated supplier and service networks and the increased use of cloud and big data solutions can also give a competitive edge. Last but not least, mobile enterprise software and external specialists are important in order to digitise and future-proof the whole of the working world. According to the survey, companies gain the necessary know-how from IT service providers in particular.

(Image and text source: Bitkom study)

Comment from Bechtle’s experience.
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Stefan Jesse, IT Business Architect and Director at Bechtle Mannheim.

Digital transformation generally means reorienting business models from a product to service-dominant logic based on a ubiquitous digital infrastructure. To increase the digital maturity of a company, however, digitalisation must first be understood in its situational context. Digital transformation has two dimensions: on the one hand the digitalisation of business processes. This what the IT sector does on a daily basis. The focus here is primarily on higher efficiency, margins and productivity, reducing costs and improving performance.

 

The second dimension is the digitalisation of the business models. This means adapting existing products and services and developing completely new ones. This often leads to disruptive innovation. The authors of the study “Die zwei Gesichter der Digitalisierung” (The Two Faces of Digitalisation) find that combining forward-thinking technologies such as cloud computing, big data and mobile devices creates opportunities for more flexible work organisation, custom product design or better customer service.

 

At the same time, a key finding of the study is that many companies still lack awareness of the nature of digitalisation. In my opinion, this is partly due to an overly comprehensive approach and a puristic view of the topic of digitalisation in the sense of disruptive business model changes. By that I do not mean that the definition of a central digital strategy is not absolutely necessary and that strategic goals have to be defined in the context of digitalisation. With the Bechtle IT map (see video below), we offer an excellent and proven methodology to support companies in exactly this task. In concrete terms: In order to increase efficiency, reduce costs or increase productivity, it is not absolutely necessary to have a central digital strategy. Particularly in the context of digitalising business processes, enormous potential can be exploited in the areas of cloud computing, big data and mobile devices—sometimes with very little effort

When digitalising business processes, enormous potential can be exploited—sometimes with very little effort.

 

Stefan Jesse

The authors of the study find that Big Data and Business Intelligence (BI) should be used much more consistently in order to gain a competitive edge. I completely agree with this opinion. In a project completed a few days ago at a medium-sized company, we were able to generate significant efficiency potentials in the process flow by integrating the Microsoft PowerBI solution into the existing controlling processes, while at the same time reducing costs by replacing manual activities.

 

In addition, the company has been able to gain a competitive advantage through PowerBI by allowing service technicians on site much faster and with all the necessary information. Furthermore, findings from existing mass data can be processed and analysed in real-time. These insights can be accessed by a wide variety of stakeholders on all available devices, anywhere and at any time.

 

I think that the digital transformation of business processes must be one of the highest priority issues on every CIO’s agenda in 2017, especially on the path to digital transformation and the associated definition of a digital strategy.

Contact.

Stefan Jesse

Managing Director, Bechtle IT System House Mannheim

stefan.jesse@bechtle.com

 

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Published on Oct 14, 2016.