Medium-sized companies: digitize yourselves!
The buzzword "digitalization" is everywhere. Everyone is talking about it and many want to implement it - but some don't.
It seems that some German SMEs are still struggling to get to grips with the digital transformation. Why is that? How can digitization be advanced in such a way that SMEs actually benefit from it? In this article, you will find basic suggestions on how to successfully digitalize your company.
Planning means remaining step-by-step and flexible
Old-school managers often reach their limits in an environment of high volatility. In times when developments are difficult to predict, projects can quickly fail if team leaders stick to a single plan that employees are expected to follow under all circumstances. Many influencing factors can thwart rigid plans. So is it better to make five plans at once?
Although it is advisable to have several courses of action up your sleeve, it is more important to remain flexible and be able to react to unforeseen events. The management level should always have a larger goal or vision in mind. On the way there, it should remain open to new sub-goals or deviations.
Agile processes with short iterations are a good approach for acting in a structured and planned manner, but not too rigidly in your own projects. What does a manager need to bring to the table to fulfill this role?
Reasons for rejecting digitalization
Surely you know someone who is struggling with the effects of digitalization or even completely resisting it with their arms crossed? Some lose track of the variety of digital applications and some feel overwhelmed by the speed. Some are even afraid of no longer being able to "keep up". In the private sphere, younger generations often help out older people. A few tips, a shared smile about the lack of knowledge and the digital hurdle is often overcome together.
But in a business environment, rejection can have devastating consequences. Employees who oppose or even completely ignore technological change will have an even harder time in the future. Think, for example, of the many businesses that suffered huge losses during the coronavirus pandemic because they failed to offer their products digitally.
SMEs as the backbone of the German economy
Various studies show that SMEs have some difficulties with the digital transformation. According to the BMWi (Federal Ministry for Economic Affairs and Energy), 99 % of all companies are SMEs. That is currently around 3.7 million companies.
Depending on the definition, a medium-sized company has a maximum annual turnover of 50 million euros and up to a maximum of 499 employees. Small companies with 10 or more employees also fall into this category. German SMEs are among the largest employers in Germany. As a major basis for economic stability, SMEs should pursue digitalization with full vigour.
Why digitization is progressing rather slowly
As a rule, digitalization is often slow or stuttering. And this is despite the fact that many people are aware of the need for it. But how does this phenomenon arise?
These reasons prevent companies from digitizing:
- Economic situationIf a company is "too successful", it sees no need to change its IT infrastructure, digital platforms and processes in the near future.
- BudgetSome companies lack the necessary budget. Some, on the other hand, think that digitalization should not cost anything. The latter show no willingness to invest.
- ExperienceSome employees simply lack experience with digital environments.
- Digital mindsetNot every employee automatically has the necessary open-mindedness and flexibility for digital innovations.
- Skills shortageThere is often a lack of appropriate experts. The workload of existing employees is often so high that there is not enough time to drive digitalization projects forward.
Technical requirements: Internet connections are still too slow in many rural areas of Germany.
Tips on how to get digitalization rolling in your company
Did you know that even small actions can help to make digital optimizations and thus make processes more efficient? With the following tips, companies can gain a head start in terms of competitiveness and future viability:
- AcceptanceAs with any problem or grievance, this point is very crucial. As a first step, companies - especially managers - should face up to digital change and accept the current developments.
- Recognize the potentialDigitalization is no longer a trend, it's part of everyday life. With digital solutions, it is often possible to save time and money. There is more room for creativity and innovation.
- Analyzing the current state of digitizationCreates transparency: Where in the company are dusty processes still taking up employees' time and energy? Which areas can be optimized with the help of digital applications?
- Identify people with a strong digital mindsetIn every company, there are those who are more familiar with digital topics than anyone else. It is important to find them and develop them further in a targeted manner. If available, the HR department or IT department can serve as the first point of contact.
- Appoint the responsible person(s)No matter what you call the relevant body - whether change manager, project manager or no title - someone should bear responsibility and drive the processes forward.
- Create the first project planNow it's getting serious. Develop the first project steps. Do you need external advice? Do you need to create new jobs? What goals do you want to achieve with digitalization? How do you want to win over skeptics in the company?
- Small stepsIt is not advisable to change everything overnight. Companies often only encourage fear and rejection. Start with something small, such as switching from a paper calendar to a digital calendar. It is always important to introduce employees to innovations with tact, drive and openness to criticism.
- Creating transparency and involving employeesManagers should communicate clearly what changes are imminent. Ideally, they should even have developed the changes together with employees beforehand. The more employees are involved in the planning process, the higher the level of acceptance later on.
- Working across departmentsDigitalization can help break down old silos. You should not only look at the individual departments, but also recognize the potential of interfaces. Many processes can run more efficiently if the relevant departments work more closely together and exchange information.
Digitization as a path
Once companies have started to make digital improvements, they should not rest on their laurels. It is not enough to develop a fancy app or just revise the homepage. New customers are also quickly lost after the social media campaign if the responsible employees do not maintain contacts.
Digitization must be seen as a helpful way to promote the success of SMEs.
