As part of the 24th workshop “Technology-driven change processes” of the Competence Center E-Commerce (June 13th, 2019 in Soest), Tobias Kaulfuss, CEO of citadelle systems AG and Managing Director of citadelle digital GmbH, presented on the state of digitization in SMEs. Roughly 60% of employees in Germany work in SMEs, they are the backbone of the German economy. Companies with less than 500 employees offer 80% of total apprenticship positions – they educate our workforce. The SME landscape is heterogenous and organisations are „stickier“, more traditional and family-owned. SMEs risk profile is leaning towards safety – less first-mover appetite. Yet, they have the ability to move with force, once a decision is made. Here are his eight theses on digitization:
- Digitization is not “more of the same thing”. Today it is no longer just about digital processes, but about new digital business models (see https://citadelle.digital/digital-transformation-2/)
- Digitization is not a curse but a fact of life. You have to deal with this development, whether you want it or not. It affects every industry and if that feels uncomfortable, then maybe there is a good reason why it does.
- Digitization is not a strategy. Without a goal, digitization is not a strategy in itself. First, the goal must be defined and if digitization is a way to get there, then projects will be worthwhile.
- Digitization may not be the most pressing challenge. If a company struggles to survive, cash management may be more important than a glimmer of hope through new, hip digital projects.
- Digitization is an empty shell until you fill it with meaning. Digitization is different for every company, every industry, every organization. The challenges are always different, so that the empty phrase must first be adapted in order to be successful in the individual case.
- Digitization is a process of change. The biggest challenge may not be the ability to innovate, but the final implementation of digitization within the company. To get buy-in in the organization for the change that comes with it, either a positive vision can be formulated or the status quo can be portrayed as a burning platform. Thus, there is a positive or a negative reason to go on the journey to the new state. Fear and worry are normal in this process and must be taken seriously.
- Digitization is only the beginning. As part of digitization, we are moving towards new economic sectors and are feeling the effects in all areas of life. It always depends on the starting point. With well-developed infrastructure of ATMs, for example, the cash supply is secured and you can remain cash-loving for a long time. Without them, the way is paved for mobile payment options from the outset.
- Digitization is not sometime, but now. So we should not view digitization as a temporary phenomenon and should also acknowledge that it is happening now. New digital business models such as platforms are now worth billions and degrade traditional service providers such as taxis or hotels to sub-service providers through their direct access to end users.