Everyone is talking about it. Internet technology is changing our business world. The basis is the conversion of analog values into digital formats. This is nothing new in itself and does not yet generate any added value. You speak of digitization when the business model changes and you integrate data in digitized processes and make it usable regardless of location and company.
The Internet – the driving force
Since the mid-1990s, Internet technology has become more established and widespread in the business world. At the beginning of this change was above all the cross-organizational exchange of files and e-mails as well as access to product and company information in the form of a homepage. When you talk about digitization today, it always means a change in one or more business models for a company.
This means that, for example, direct sales will now be handled via an online shop and no longer via brick-and-mortar retailers. Another development step came with the functional expansion of the smartphone. Apple laid the foundation for this change in 2007 with the iPhone. The next big push came with Web 2.0. That was the turbo for networking.
Digitization is driven by these niches
- Collaboration (new ways of working together)
- Cloud associated with the communication
- Increasing intelligence of end devices
- New revenue and business models (e.g. with Big Data)
Although there is awareness in many companies, you can still find that many SMEs find it difficult to define a digitization strategy. In many cases, the topic of digitization is misjudged or underestimated because the focus is on the technical aspect. With digitization, niche edits for business models and others can be done right away.
Ultimately, the technology is just a tool and only has to do with the implementation. The perspective is therefore much broader.
The digitization strategy
Those were the days when the management could calmly concentrate on defining the strategy for the next 5 years. At that time people spoke of “structure follows strategy” today more of “structure follows technology”. Telecom companies, for example, became aware of this years ago when “Whatsapp” threw the profitable SMS business overboard within a short time.
This has shown that a successful business model can change within a very short time. For this reason, the management is obliged to review the strategy development on an ongoing basis. The reason for this is that the defined direction is crucial for the success of a company. Equally important is the constant review of the direction taken and the early detection of changes.