Digitalization

The Success Factors of Digitization in Small and Medium Enterprises (SME)

digitization in small and medium enterprises Digitalisierung in kleinen und mittleren Unternehmen

In the past, some tasks could only be accomplished applying a lot of manual labor, a lot of time and a lot of resources. Now they be successfully completed from the comfort of your desk with a few clicks of your mouse. The digitization in small and medium enterprises has destroyed old business models and created new ones. This worries many people. However, this worry is unfounded. Because all of us can benefit from these changes – if we create the new processes relying on both our hearts and minds. 

 

Companies are aware of the opportunities brought on by digitization 

A lot of companies are annoyed and see the word “digitization” as a dirty word by now. The reality is that the majority of companies already are well on their way to digitally transform themselves and understand very well which opportunities lie in their future. 

 

However, especially small and medium enterprises (SME) still have a hard time figuring out digitization in their context. (You can find out more about this in our article Digital Readiness for Small and Medium-Sized Enterprises – the Road to Digitization.) In most of these cases, being supported by an external partner can make a big difference. This partner supports not only the continued development of the company’s products and services, but also the necessary optimization of specific business and production processes. 

 

Optimizing Business and Production Processes as Part of Digitization 

What makes companies digitize their processes? Is this only happening to achieve greater savings and maximize profits?  

 

Digitization is never the starting point. It is always only one possible answer to the question of how a company can be more successful in its environment. 

 

Products and services are under pressure in the marketplace and constantly have to compete with rival companies. In order for a company to persist in the marketplace and be successful, it is not only necessary that the products themselves are evolving, but it is even more important that the existing business and production processes are improved upon. 

 

Lean business and production processes, supported by the implementation of digital business and production solutions, help a company to not only improve efficiency in the short run, but to maximize effectiveness in the long run when it comes to producing and distributing products and services. 

 

Benefiting from Digitization  

The purposeful optimization of processes and business environments supports the company in positioning its products and services more effectively compared to its competitors in the marketplace and thus secures success and the existence of the company in the long run.  

 

Such optimization of business and production processes is possible in almost all companies and industries, in order to improve products and services and successfully compete with rivals and continue to grow. 

 

The kicker: Just about every company can benefit from simple optimization measures through digitization! Whether the company is very small or a huge conglomerate doesn’t matter at all. The effects can be felt everywhere in the value chain of the company – in the administration, the production, in sales or in research and development. 

 

The Success Factors of Digitization 

Employing simple optimization measures using digitization can even today lead to many answers to important questions and requirements. Because in the end every company has to participate in the ongoing digital transformation, company leaders should take advantage of these new opportunities. However, this only works if you keep certain important success factors in mind: 

 

1. Define the direction

Big projects that are part of a company’s strategy (IT, digitization or otherwise) and decided on by management are important roadmaps for the company. These strategies have to be in place in order to determine the direction for the company in the long run. The breakdown of these big projects into smaller sub-projects along these strategies makes it possible to create actionable steps that lead toward the overall goal. 

 

2. Continuous development thanks to an innovation culture

The opportunity to critically think about existing structures, opens a company up to continuous optimization and improvement. The prerequisite for this is a company culture or innovation culture that allows for this to happen and even supports it. Actively including employees in the optimization and improvement of existing products and processes is essential for modern companies. Ideas and innovations only grow when all employees are allowed to contribute, to share their ideas and to work together to advance them. An established innovation culture is the basis for having motivated employees and for sustained success. 

 

Keep in mind the following 3 cornerstones: 

  • Permission Established freedom and structures for the employees  
  • Competency Development of competencies when it comes to innovation methods 
  • Willingness intrinsic motivation supported by specific stimuli 

 

3. Keeping in mind the company values

It is important to know that not everything that has worked well in the past, is faulty today and has to be optimized, replaced or abolished! It is helpful to know the values of your company, in order to make the necessary decisions. 

 

4. Knowing the company environment and position

In order to determine if and where within the company measures of digitization are even needed, it is important to know the company position and the company environment.

 

Implementing measures simply because they are “trendy” right now or because everybody is talking about them, will.. 

  1. not create understanding/acceptance among the employees, and 
  2. will also not create additional success in the marketplace. 

 

In many companies, valuable information is hidden everywhere – data that is not used by anybody or good individual solutions; products or processes that have not been aligned yet. If a company takes better advantage of these opportunities, these measures will pay of immediately. 

 

The following four questions provide a good guideline to recognize existing opportunities and to determine your own position: 

  1. Where do I want to go with my company? 
  2. Where do I follow my competition? 
  3. Where can I play to my own competitive advantage? 
  4. Do I have products that I can digitize, with whom I can perform better? 

 

In general, the following holds true – „Only when the clients and their needs become our benchmark, will we be successful “ 

 

Discovering digitization for your company 

As you can see, the word “digitization” does not have to be a dirty word. The large majority of companies have been implementing it since a long time. Now it’s important to discover and implement new opportunities in your own company. Thanks to a lived innovation culture in the company and an analysis of company values and environment, digitization can be used very well to optimize important business and production processes. You have questions? We love hearing from our readers. Just contact us: You can find us on our Contact page, in the comments further below or on Twitter.

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