Digitization between hype and reality

Increasing digitization presents companies with many challenges.The group of interviewees included two professors, two CEOs of IT companies and two members of management from the financial industry. It was clear that all of them considered the topic to be absolutely topical and relevant, but there were considerable differences in their approaches to its implementation.In this article, I would like to present the key findings from the stimulating discussions and highlight some striking features. Due to the great interest in this topic, this series of discussions will be continued in the second half of the year with further participants.What does "digitization of companies" mean to you?Digitization and the associated technology is understood as a business-supporting tool and also as a catalyst. From the company's point of view, digitization must be interpreted individually - the best way is to answer the question: "What type and degree of digitization will strengthen your own competitive position in the long term? "Digitization is inextricably linked to customer information and thus to solving the permission question in a clever way. This is nicely illustrated by an example - the more information customers disclose, the deeper their access to services via the customer portal. The discussions also emphasized that data is becoming a business-critical strategic resource and that it must be organized accordingly. It also became clear that the central challenge is not the technology, but the acceptance and handling of it by the employees. Thus, the digital transformation also clearly calls for accompanying change management measures. And it is also added that digital also means borderless - with all its implications.To what extent is digitization hype or reality?Digitization has spread almost unnoticed into our lives and everyday life over the last 15 years, and so it is already a lived reality. Increasingly, data and information are available in digital form, which makes it much easier for us to deal with them. Digital media are now at the center of our society and have become a matter of course. The moment of unavailability brings this fact home to us most clearly. A certain amount of hype can be seen in the fact that there are exaggerated expectations of what will be possible with technologies as "wonder weapons". Fortunately, however, this point is countered by value concepts and acceptance issues. Even in the digitized world, people still have the upper hand, and that's a good thing. Things get a little more complex when we enter the field of M2M - the Internet of Things. There, the human being is then on the sidelines or on the sidelines...Certain industries, such as the automotive industry, are stepping on the gas in this area.What are the key drivers for digitization?Competition is definitely a key driver, and digitization is also redefining the relationship between customer and company. It is a fact that the customer has even more "power" in the context of this redefinition. Because digitization is also massively reducing the entry thresholds for new providers, this is noticeably increasing the competitive pressure. Interestingly, these competitors are coming from areas close to the industry or even from outside it. The power of networking is seen as a further driver; networking of devices, people or groups of people. This in turn allows scaling options with which, for example, critical mass can be achieved much faster and at significantly lower costs. The fact that classic business models can literally be "leveraged" with such levers has been proven several times in recent years - the case of KODAK-Instagram can be mentioned here as a representative example. Other drivers mentioned include cost reduction potential, e.g., with the use of cloud solutions, or the acceleration of business processes by eliminating media discontinuities. And the increasingly smart end devices are also making their contribution to the development of digitization.Opportunities and risks of digitization?A certain risk can be seen in the fact that "digital projects" become a black hole where a lot of money flows in and the benefits are difficult to grasp, or that digitization is interpreted too one-sidedly in quantitative terms and qualitative aspects are thus ignored. Current legislation does not cover consumer and data protection issues sufficiently, resulting in legal uncertainty. From a singular management perspective, the "socialization" of many corporate issues is likely to result in a loss of control, which means that the management elite is challenged with regard to its own change management. However, in the opinion of my interviewees, the opportunities clearly outweigh the risks - cost-effective development of new markets, addressing new (social) target groups, increasing customer loyalty, more effective use of resources, and a boost to innovation in the area of business models. Thus, it can be stated here that the field of opportunities is wide open and constantly growing. However, an opportunity that is not exploited today can become an acute threat overnight. Digitalization demands a very high level of attention and agility from management.What are the specific challenges?When the business model changes, budget allocation must also be adjusted - is marketing, for example, aware of this dynamic? What competencies and skills are required in the "new" marketing, when it is no longer about awareness but about conversion? How must the personnel recruitment policy be fundamentally adapted so that the right "attitudes" also come on board in good time? Are the communication networks up to the volume increases and who will finance these networks in the future? How will the Total Quality Management thinking of the 1980s be applied to the issue of quality content?The Key Takeaways1. key question: what type and degree of digitization sustainably strengthens one's own competitive position?2. (Customer) data is becoming a business-critical strategic resource.3. digitization is real - digital media are at the center of our society and are taken for granted.4. digitization lowers barriers to entry - competition is intensifying significantly.5.The management elite is confronted with a loss of control and has to deal with change management itself.6 The "new" marketing needs new skills - marketing and information technology in collaborative mode!I am already looking forward to the second round of expert discussions with business exponents after the summer vacations - the high rate of change of digitalization will already provide exciting topics and discourses again by then.