SMEs: 7 Recommendations for Action for Digital Transformation


Mobile internet, social media or online shopping are now an integral part of our everyday life. Hardly anything has changed our society more than digitization in recent years. In the meantime, the digital transformation is also changing our business fundamentally. It is therefore important for companies to recognize new technologies and digital trends and to make them usable for the company.

Digital technologies offer companies numerous opportunities to tap new customer groups, make the company organization more efficient, or optimize the production and supply chains. This creates great opportunities for small and medium-sized companies in particular, because their smaller size and flatter organizational structures mean that they can respond to new challenges in the market more agile and more quickly than large companies.

At the same time, this trend also harbors risks. Digital technologies are shaking value chains, organizational structures, operational processes and revenue models – in short, entire companies. All sectors are affected. Only the degree and timing of the faults vary between industries. In addition, small and medium-sized companies run the risk of underestimating the importance and effects of digitization due to the great uncertainty surrounding investments in digitization projects and the comparatively low human and financial resources, and thus to leave considerable sales and savings potential unused. Experts agree that this can significantly reduce a company’s competitiveness in the medium to long term, because the digital transformation process leads to an increase in competitive pressure.

7 Concrete Recommendations for Action on How You Can Successfully Master the Digital Transformation of Your SME

1. Digitization and Corporate Strategy

Think about a strategy for digitizing your company and formulate a specific goal. Be sure to tailor this target image to your company and to define it in accordance with the overarching corporate strategy. Since the economic valuation of digitization projects is complex, you should also rely on a variety of valuation methods and key figures for the investment decisions that you want to make as part of your digitization strategy.

2. Business Model Innovations

Proactively think about how you could expand your business model with digital technologies or even have to adjust it due to the market. Bear in mind that successful business model innovations are usually the result of an intensive development process, which is intended to ensure precise addressing of customer needs. Since new disruptive business models often cannot be built within the traditional business model due to conflicting goals, medium-sized companies should operate them in business units separate from the core business

3. Personnel Management and Personnel Development

Formulate your HR management and HR development as part of your digitization strategy. Proactively support your employees with in-depth training and further education in topics relevant to the digitization of your company and invest in the recruitment of specialists. Also keep in mind that digitization can mean great uncertainty for your employees, and therefore include it in your communication.

4. Use of Digital Technologies for Customer Acquisition and Management

You can also rely on the use of digital technologies such as CRM systems and social media in customer management. Information and application systems enable you to make your customer management more efficient and adapt it more individually to your customers. You can also expand your online presence to reach new (international) customer groups, increase customer satisfaction and strengthen customer loyalty.

5. Efficient Uses of Data

As part of your data strategy, be aware of which data you want to collect, where you are already collecting data in your company and how you could use it in a useful way. Avoid “data garbage” by only collecting the data for which you actually use it and also think about the format in which they must be collected in order to be able to evaluate them as simply and efficiently as possible.

6. Proactive Assurance of IT and Data Security and Data Protection

IT and data security are an integral aspect of product and service quality, which in the digitization age has not only technical but also direct competitive effects. Therefore, proactively and systematically ensure data protection and IT and data security in your company by anchoring them as an important pillar of your digitization strategy.

7. Use of Digital Platforms in Sales, Production and R&D

Use digital platforms to connect with customers, suppliers or cooperation partners for the exchange of services or information in order to make your production, sales and research more efficient. Invest in complementary training for your employees to use these platforms and make sure in advance that your solution is compatible with the systems of your cooperation partners.

To the E-Paper

You can find further details on the seven recommendations for action and numerous case studies in the current e-paper “Recommendations for action on digital transformation for SMEs”.

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