Digital Change: This Is How Companies Develop

Digital change – how far along are companies? What are the options, and how ? The use of digital technologies shapes the economies, of all countries around the world. The greats of the modern digital world can be found primarily in the USA, more precisely in Silicon Valley. Google, Apple, Facebook, and Amazon are regarded as the pioneers with media attention regarding digitization in companies. After all, digital is also her profession.

Digital Change- Is The Economy Digital? Can You Measure Digitization?

Of course, digitization has long since found its way into the economy. The aforementioned digital giants that dominate entire digital economy markets worldwide do not exist. But how digital is actually, and can it be measured at all?

Even economic research still has problems measuring digitization. The OECD, the Organization for Economic Cooperation and Development, suggests showing the extent to which entire industries are “digital.” However, digital transformation is not just understood to mean that companies manufacture digital products. Instead, the question must also be asked to what extent production processes are being digitized more and more. That, in turn, can mean: Which companies are already producing with automated use of robots? Perhaps our production plants are already networked and data-based optimized through the IoT? But also: is the number of workers with specialist training for digitized activities steadily increasing?

What Do The Experts Say?

Various foundations, such as the Friedrich Ebert Foundation, get to the bottom of these and many other questions and measures, for example

• the development of technology intensity,
• the knowledge intensity
• and the level of digital capital intensity.

The foundation examined the digitization developments in economic sectors between the years 2000 and 2015. It concluded that, since 2000, the investment shares for information and communication technology hardware have decreased. However, cheaper devices and saturation in the technical infrastructure could be responsible for this.

However, investments in software and databases, as well as research and development, have skyrocketed. IT capital intensity, in particular, has also risen sharply since 2000. This is especially true for computer hardware but also the capital stock of software and databases. Digital capital is gaining importance compared to the labor factor in the economy.

The BMW, the Federal Ministry for Economic Affairs and Energy, also regularly measures the progress made in the digital transformation of the economy. ” Almost a third can be assigned to the “digital advanced users.” At approximately 34 percent of the companies, the “digital midfield” would be the largest. More than a quarter of all companies are still struggling with digitization. And so far, digitization has almost completely bypassed around eight percent of companies.

Executives And Decision-Makers

The consensus regarding the successful implementation of digitization in the company is clear: A contemporary management culture creates the best possible conditions for all employees to successfully reflect, research, develop and implement modern trends and technologies. The management culture has to focus on values ​​and the purpose to act more agile at all levels. And this elegant action is significant. Yes, it is perhaps the essential basis for the digital transformation of a company.

Because only an agile company can adapt the organization and the entire business model in the shortest possible time to new market requirements and opportunities arising from digitization, the need to break through the previously known and lived business model and to proactively drive the development of the company in the name of changing market requirements must, however, be communicated.

This also requires clear operational responsibilities in top management. They are supported by digitization experts who should no longer be missing in any modern company today. Those responsible, in turn, must ensure that comprehensive dialogues are maintained across all hierarchical levels. In the networked age, companies can only remain successful if “networking” occurs internally.” It’s about reflective exploration and an actual exchange between executives and employees.

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Recognize The Possibilities Of Digital Change

Before a company can transform itself digitally, it must independently recognize the value of digital transformation. Bosses and employees have to be clear about the potential that digitization generates to actively work on the development of the company on their own.

A company gains an international competitive advantage by becoming more digital. Digital companies are more flexible, and they can work faster and more efficiently. This also means that customer requests can be implemented more individually and more cost-effectively. An important point – because customers are increasingly demanding such individualized and specified solutions. A digitized company can often offer this by understanding customers’ needs, at best, even before the customer even expresses them. Data analyses carried out by data analysts from IT should only be helpful to any company in the future, enabling precisely that.

But to be more specific and to look at everyday work in practice as an example:

• Digitization also improves the working environment and climate in the company. One thinks, for example, of optimized software ergonomics. Not only workplaces that are adapted to the body – such as height-adjustable standing desks and the like – but also a work environment adapted to the mind is beneficial to the health of all employees. Because overloaded menus, error messages, and outdated software put people under psychological stress and reduce efficiency.
• In addition, outdated hardware and software in the company often pose security risks. Only if the technology is kept up-to-date and constantly updated can the dangers lurk, especially on the Internet, be consistently avoided. This also protects the employees’ data, for which the company’s network is ultimately responsible.
• Internal communication in the company will also become more flexible and efficient thanks to digitization. For example, you no longer have to be in a room to hold meetings. Because meetings can now take place virtually from the PC, project planning and creative exchange can co-occur with the help of the appropriate software. Of course, employees in the home office can also take part in the brainstorming despite the distance.

Even more: the employees of digitized companies nowadays often don’t even have to live in the same country or even find themselves in the same building every day to work together. Because critical information can be obtained from anywhere, in this way, every team member – regardless of when and where they are – can make their contribution to the company’s success.

This Is How The Latecomers Succeed In Digital Change

We have already mentioned that a company’s digital change or digital transformation always has to take place from above. Without managers who display a modern and digitally open-minded leadership culture, convey and live corresponding values, digitization cannot work effectively. After all, more and more companies around the world seem to continue to invest in digital transformation.

It is also essential that managers deal with the attitudes and views of their employees. Latecomers, in particular, should benefit from this because the managers of these companies often complain that their workforce is not open or digitally-not competent enough. For several studies that focus on surveying executives, the Bertelsmann Foundation explicitly asked employees about the status of digitization in their companies.

The survey revealed that “the digital openness of people in the workplace is significantly greater than is generally shown. It is up to the decision-makers in business, society, and politics to take up this willingness to change and translate it into concrete action.”  Too often, managers would criticize the digital skills of the employees. There is often more significant potential to be found here than assumed. In addition, the social and corporate cultural dimensions are often neglected. However, they are also part of the company’s digital transformations.

Let’s be clear: On the one hand, employees’ digital skills should not be underestimated. You should continue to invest in them. Experts in digital company transformations are fueling rapid change. In addition, stragglers should internalize the following points:

• Employees must be actively involved in the digital transformation.
• For the whole company to change, it must be precisely communicated why the transformation is crucial.
• Therefore, there needs to be clear operational responsibility for the transformation.
• Cross-departmental networking in the company is to be promoted in a targeted manner.
• It is essential to invest time and money in all the building blocks of digital transformation in a balanced way.
• Digital working methods should not be trained alone. Instead, a framework must also be created in which they can be practiced.
• The digital transformation can take place quickly but not overnight. It is therefore not to be underestimated in terms of time.
• The courage to rethink and redesign the business from scratch digitally from time to time usually pays off.

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