The digital transformation has already begun in many companies and will continue to progress in the future. But what is it actually, what does digital transformation look like in companies and what are the opportunities? You can find out more about the basics and the definition of digital transformation in the following article.
What is Digital Transformation?
The definition of digital transformation is assumed to be a process that describes the change in companies, but also in the private sector, and can encompass many different measures.
Starting with the use of digital media and ending with the restructuring of business and work processes, digital transformation is above all a long-term process that can only progress slowly due to the complexity at all levels in companies.
Difference: Digitalisation and Digital Transformation
Yes, there is a difference between digitalisation and digital transformation. Digitalisation usually refers to purely technical aspects through the use of new media or the adaptation of existing structures. Digital transformation, on the other hand, refers to the entire process in a company that generally goes hand in hand with digital change and is never completed.
Digital Transformation - Examples
There are many practical examples of the implementation of digital transformation. Among others, the following belong to them:
- Use of social media with all its facets (Instagram, Facebook, Pinterest, Twitter and many more)
- Storing large amounts of data and the digital access of the data
- Offering cloud services (access from home office and office)
- Use of smart technologies (smartphones, tablets and wearables)
- Intelligent networks
- Mobile payment systems
- and many more
Opportunities: Digital Transformation in Companies
The digital transformation in companies offers many opportunities, but also risks. Here you will find an overview of both:
Opportunities of digital transformation
- Increasing competitiveness
- New business potential
- Networking as an opportunity
- Opening up new resources and markets
- Simplification and acceleration of various processes
- Cost reduction through the expansion of digital processes and more targeted use of data
- Introduction of flexible working models
- Increase in sales
Risks of digital transformation
- Missing know-how
- Problems with implementation
- Danger of data theft
- Higher investment costs
5 Steps of the Digital Transformation
In order for the foundations of the digital transformation to succeed, the following steps are important:
1. Analysis
The first step is to analyse all existing processes. All areas in the company are examined for their potential for change. In this way, companies find out how they can strategically position themselves in the future and network themselves in such a way that they can achieve an optimal positioning on the market through the digital transformation. It is not only important to analyse the company's own processes and interfaces, but also those of customers, suppliers and other business partners.
2. Development of Digital Business Models
After the analysis, the next step is to develop new models. Existing business models can be adapted, further developed or replaced by completely new systems. In this way, companies not only reach existing customers, but also new ones. In order to tap into new target groups and revenue opportunities, a structured development and planning of business models is crucial. In addition, it is important to implement them as cost- and time-efficiently as possible.
3. Careful Testing Phase
Before new processes and technologies are put into practice, a controlled test phase is elementary. Here, the new digital solutions are first extensively tested after their introduction until everything runs smoothly.
4. Training for the Necessary Know-How
Next, all employees must be trained to implement the digital transformation. External employees as well as customers and suppliers must also be included in this process. In the best case, all employees are then able to further develop new business approaches and actively contribute to the company's success.
5. Long-Term Management by Executives
Since the digital transformation is a lengthy and never-ending process, it depends on the right management and control. The coordination of cross-company measures should therefore be left to a company's executives. They, too, must train their digital competences and leadership qualities, which are important for the digital transformation, accordingly and continuously educate themselves.
Prepare and Support Teams Optimally
Digital transformation takes time, but pays off in the long run. The following measures help to support employees and teams:
Defining Goals
Clear goals help all those involved to implement the planned digital transformation measures.
Promoting Further Development
Regular training and education on the topic helps staff stay up to date and promotes overall engagement.
Communication on an Equal Footing
Instead of unilaterally prescribing new measures, the ideas and wishes of the employees are also in demand. If you get everyone on board, you use the full potential as an opportunity for further development.
Digital Transformation - Taking Advantage of Advice
Since the process of digital transformation is often very complex and not manageable for many companies on their own, some take advantage of a digital transformation consultancy.
In addition to the definition of long-term goals, topics such as the selection of suitable technologies, the necessary training of employees and the alignment of the business model with the digital transformation process are also part of the process.
Consultation can be especially important for small businesses that have little experience with the use of new digital technologies and need to consistently watch their budget.
Subsidies Are Possible
The digital transformation is not an easy process for companies and is often very cost-intensive, as new technologies and the necessary know-how must first be acquired.
The Federal Ministry for Economic Affairs and Energy (BMWi) therefore repeatedly offers funding programmes for investments in the necessary software and hardware, but also for qualification measures for employees. For example, on the topic of data security, information technology and other basic know-how that is important for a successful digital transformation.