Digital is not trivial

Analogy example pigment paints vs. paints in tubes - the gateway to Impressionism.BY CHRISTOPH OGGENFUSS*In the first article, Michael Stemmle, CEO of the company additive-Next Generation Banking interviewed. What does the digitalization of companies mean to him? "Technologies that support digital development should be seen as tools and often have a catalytic effect," answers Stemmle. For him, digital often also means "limitless" with all the associated effects. He mentions an interesting analogy: "In earlier times, painters only had pigments as a basic material for creating paintings. This meant that artists were bound to protected spaces to create their works. Otherwise, the pigments would literally have been blown away by the wind. The invention of paint in tubes also meant that artists were able to leave their studios and completely new approaches to subjects, painting techniques etc. emerged - Impressionism was strongly influenced by the innovation of paint at the time. This should make it clear that existing processes are being revolutionized with fundamentally new prerequisites - at that time paint in tubes and today digitalization techniques. This is also referred to as disruptive changes as opposed to organic developments.The digital world is a realityAnd what does Stemmle think about the discussion on whether digitalization is more hype or reality? "Digitalization is already a reality today. We experience it in our day-to-day work, especially with the tools we use and the fact that a lot of data and information is only available in digital form. Due to the gradual development of the digitization of data, we are not really aware of the current presence of digitization. When the typewriter was replaced by the PC, the form of work remained more or less the same. As we move into the digital world, entire processes of service provision are changing, which can lead to service provision becoming fully decentralized. As a result, business models change, sometimes radically, and so do the demands on marketing and communication. Until now, centralization has been a mantra for efficiency. In the digital world, total (cross-border) decentralization can be the new maxim for total efficiency and low unit costs. The physical understanding of location is dissolving and making way for decentralized network structures. However, this creates new challenges for communication," explains Stemmle.Like an instrumentWhen it comes to the key drivers of digitalization, the additiv CEO believes it is important to emphasize that digital technology is only a tool. The real driver of digitalization is competition - the relationship between customers and companies is being radically redefined by digitalization in some cases. Digital tools - the smartphone as an impressive example - are massively and sustainably changing customer behavior. Customers have more options than ever in terms of communication and behavior. The new marketing has to face up to this fact. The availability of digital technologies has also significantly reduced the barriers to entry into existing markets - new competitors are emerging and intensifying competition.The risksWhat are the risks of digital transformation? "The primary opportunity presented by digitalization is the opening up of new markets or new business segments at comparatively low costs. In addition, digitalization allows for fundamentally new forms of collaboration where physical boundaries, time zones, etc. are secondary. This is also breaking down the boundaries of the labor market. Against this backdrop, the vote on mass immigration seems like a relic from the last century! Of course, there are also risks associated with digitalization - the end of mediocrity is increasingly in sight," says Stemmle. Another risk he mentions is the market volatility that can arise from the disruptive power of digital innovations.Digitalization is changing business modelsAt the end of the interview, Michael Stemmle emphasizes that digitalization is not a sure-fire success, knowing full well that a lot is technically feasible. However, the cognitive limitations of humans will be the relevant driver for the development of digital innovations across the board. "In the future, the focus will continue to be on people versus the digital interface," says Stemmle, adding that the disruptive power of digitalization is changing business models, revolutionizing service creation processes and lowering the barriers to entry for new competitors. This is redefining the rules of the game in markets, which directly affects marketing and communication. It is important to follow these developments closely and derive implications accordingly.-----------------------------