Article

Digitalization, “old hat”. But: what happens next?

You probably won’t currently find any companies that don’t have digitalization on their agenda. Coronavirus has prompted even the undecided and stragglers to act. Many companies have now invested large sums in IT support for their processes, its consistent integration, and automation. Without these investments, many of these companies would no longer exist or would at least have to fight hard for their existence: Other, better, or faster operators would have already overtaken them or pushed them aside.

So, time to take a breath? Not at all!

IT skills: a business-critical commodity

As one of the perceived main drivers of the digital transformation, coronavirus is falling further and further into the background. Alongside ongoing boosts in efficiency and effectiveness for existing solutions, ever faster and more global competition is putting pressure on people to constantly exploit the opportunities offered by IT more intensively and intelligently. One’s own IT skills are thus becoming increasingly critical for the company’s growth and success. The winners are those who – while using these skills and opportunities – can offer an optimum product and customer experience quickly, flexibly, and sustainably.

Things like working from home, agile working, virtualization, and acquired flexibilities will remain. Commercial drivers such as the economy of platforms and implementation of increased, intelligent(!) resilience are joined by other, new trends: sharing something instead of owning it, for instance, is a change in values that is heavily represented by the younger generation, the effects of which will lead to brand new business models and product approaches in the long term. Airbnb and Uber are examples of this.

One aspect is only too readily forgotten here: the satisfaction, motivation, and engagement of internal employees is equally as important as the enthusiasm of customers when it comes to the company’s success:

Although a quick, flexible, and targeted adjustment of the product range and the integration of new elements such as digital payment methods are crucial for short-term market success, long-term success factors such as comprehensive service quality, speed, and the quality of customer interaction can hardly be implemented without committed employees. If you lose the employees on this journey, all of a company’s digitalization activities are only worth a fraction of their value.

The approach to digitalization activities must therefore be: Don’t survive – shape!

In-house solutions for enterprise resource planning, supply chain management, customer relationship management, computer integrated manufacturing, and the like are basically “old hat” from an IT viewpoint, yet essential as the backbone of a company. Although the ongoing development of these systems and their further optimization are no-brainers, they are a must.

One element is increasingly joining them: Due to the decentralization of services and ever greater division of labor between the companies, future digitalization activities will increasingly also place the focus on intercompany issues.

In particular, by bringing together diverse individual (online) functions of various partners, the opportunities of digitalization promote the creation of new, better offers, products, and services. Customers want to consume these ad hoc, anywhere, and without restriction. Topics such as the seamless integration of partners and the – previously mentioned – comprehensive service quality increasingly take priority in this.

From a technical viewpoint, it is thus clear: Nothing will be possible in the future without the cloud!

Further digitalization: Where will the journey take us?

If various consulting firms, well-known “augurs”, future institutes, and CIO associations are to be believed, two things can be identified:

  • Every publication offers a somewhat different view of “digitalization”, different approaches, assessments, and perspectives, and comes to different content-related prognoses and technical conclusions.
  • However, the various predictions all agree on one thing: The digital transformation is gaining in importance and remains by far the most important driver of IT investments!

Viewed pragmatically, two focal points emerge for further digitalization activities:

  1. Complete, consistent electronic integration:

The electronically consistent, interruption-free handling of the entire value creation chain by eliminating all process and media disruptions from the end-to-end viewpoint of both customers and employees is crucial. In addition to the completely consistent integration of the processes that are visible to customers, it is essential that this also takes place for – often unpopular – internal processes!

The whole is greater than the sum of its parts: In practice, it can often be observed that, although elements or partial chains of standard business transactions are well supported and automated by IT, the handling of non-standard transactions takes place manually in many cases and is characterized by breaks in interaction. The integration of necessary auxiliary services represents a high driver of costs and problems. Consider, for instance, the integration of payment processes, authentications, required signatures, etc. People often “starve” in between, so to speak. Fully electronic process worlds such as those belonging to Amazon are a good example: the last few meters of digitalization are especially crucial for success and acceptance!

2. Intelligent integration of new technologies

New technological approaches and the intelligent integration of new technologies have the potential to become game changers in certain areas. Many processes can be raised to the next highest level or even a brand new level by using new technologies to optimize specific tasks – as afterburners, so to speak: The use of artificial intelligence, such as in the areas of human-machine interaction, e.g. the use of voice assistants, or the context-sensitive operation of systems in the areas of image recognition, e.g. for self-driving cars, or diagnostic support in the field of medicine are initial examples of this. Other examples include the use of IoT or the integration of the blockchain, which promise further, huge potential for solving specific tasks. Naturally, each company must pursue their own individual digitalization agenda here and constantly scrutinize whether it makes sense to use new technologies and whether they are being implemented at the right time.

However, the example of the blockchain also allows the famous hype cycle to be observed: The exciting technology is already available, but it is not yet possible to assess its actual potential. Where and how it is to be used and what business transactions actually benefit from it are only discovered over time, including individual learning curves.  

The answer to “Where do I want to go?” instead of “What can I do with it?” may be helpful here.

Digitalization 2.0: Evolution or revolution?

Despite all of the complexity of the issues mentioned above, two – completely trivial – conclusions can be drawn:

A) The speed and intensity of digitalization content will increase further.

Digitalization as such will continue to develop in an evolutionary way overall. Individual disruptive changes and game changers provide crucial differences in certain areas.

The maxim – which continues to apply – is: Whatever can be sensibly automated should be maximally transferred to IT. This relieves pressure so that the focus can be placed on the actual value-creating elements such as product range, customer contact, and innovation.

  • Those companies that ensure the automated, continuous handling of their processes and can therefore focus their capacities on further developing their business will win.
  • From an IT perspective, there is a trend towards “everything as a service”, and the continuous development of IT infrastructures and superfast networks lay the foundations for this. The intelligent use of new technologies (IoT and the like) and their individual adaptation make further contributions.
  • The person is increasingly at the center of technology. Data about customers, forecasts of their behavior, predictions to fulfill their needs will thus become more and more important. Aspects of monitoring and regulation are also included in this. The further use of analytics and big data, as well as AI-based approaches and the use of supportive technologies, are thus essential.
  • In the long term, artificial intelligence as such will become the ultimate game changer. By using the efficient basic technologies mentioned above, its influence will extend to all areas of life. However, the use of AI will only be accepted if there is trust in AI. Explainable AI and the transparency of its results are key components of this.
  • Data and IT security remains a perennial issue.

B) IT expertise will increasingly become a match winner.

Alongside expertise, knowhow and skills concerning the best possible use of the opportunities offered by IT are becoming increasingly critical for company success.

The competition for the best resources will become even more important in the future; the attractiveness of the company plays a key role in this (cf. article: CIOs as figureheads).

  • The shortage of IT personnel is permanently on everyone’s lips: Identifying potential for digitalization is one matter. The availability of key resources and qualified personnel, which are then also able to actually exploit recognized potential and implement targeted solutions, is quite another. Recruiting the right specialists is a crucial factor in this.
  • From an IT viewpoint, agile methods will become more established and thus dominate topics such as DevOps, continuous integration/continuous delivery. Lowcode/no-code approaches and model-based development tools support the intensive reuse of code, yet IT personnel, particularly relating to the areas of development and the use of the cloud, will be in short supply in the coming years.
  • The digitalization of software development itself will thus be exciting. This could become the game changer for the infamous “war of the talents”.

Conclusion: The speed and intensity of digitalization are set to increase further. Highly automated, continuous IT process support is crucial; technological game changers will make the difference in certain areas. The right employees are essential!

ResultONE has extensive expertise as well as plenty of experience and can provide you with excellent support with the aforementioned priorities and areas of responsibility. In cooperation with our highly competent partners from the academic environment, we also provide extensive, in-depth, and highly topical specialized knowledge on a wide range of subjects! Get in touch with us today!

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