We have already seen that digitisation implies numerous changes. In this chapter we will focus specifically on how companies are affected.
In the following, you will learn about the opportunities and challenges that digitisation brings to companies and which aspects they must pay particular attention to. You will also learn more about the winners and losers of digitisation, because when it comes to digitisation, the following applies
You have to move with the times, or the times move you!
Let us start with the advantages that the use of digital information and communication technologies implicates to companies:
You’ve probably all bought something online at some point and know the many benefits that you, as a customer, enjoy – you save time and stress and possibly money because you can compare offers online. As a result, customer satisfaction increases.
As the new technologies make working steps more efficient or automate them, the performance of the company can be increased. Employees are also more flexible, meetings can be held via video conferencing, etc. In addition, manpower can be saved, which reduces the company’s personnel costs.
The new technologies also enable new business models, such as online shops or the delivery of food that can be ordered online.
Remember
In summary, digitisation offers companies the following advantages:
more satisfied customers
increase in performance
cost saving
new business models
Winners of digitisation
If a company succeeds in making smart use of these advantages, it is one of the winners of digitisation. A good example is the online mail order company Amazon, which displaced established mail order companies such as Quelle from the market with an innovative online concept involving intermediaries.
You probably know many other winners of digitisation. For example, Uber, an agency service that offers online possibilities for transporting people, or Airbnb, a marketplace that offers accommodation on an online platform for short- or long-term stays.
Another well-known winner of digitisation is the hard- and software developer Apple.
Example
In 1967, Steve Jobs and Steve Wozniak founded Apple Computers Inc. in California together with their friend Ronald Wayne.
The trio worked on the first personal computers (PCs), but soon realised that innovative ideas were needed to prevail against competitors such as IBM. In 1984, the company had great success with the development of the Macintosh (Mac), which could be controlled with a mouse and had a graphical user interface – both innovations on the market.
Finally, in 2007 the iPhone was introduced with great success – a phone with a new type of touch screen that can also be used as an “Internet communicator”. Despite initial technical problems such as congested mobile phone networks, Apple never allowed itself to be diverted from its vision. The customers were soon convinced: Apple dominated the mobile market for smartphones and tablets for years and is still one of the most valuable brands worldwide.
The example of Apple shows that companies need both a sense for trends and inventiveness as well as the courage to introduce a promising innovation, even if there is a risk of failure. This brings us to the challenges that companies face in course of digitisation. In the following section, we will take a look at the challenges that companies must face in case they want to be among the winners of digitisation.
Challenges of digitisation for companies
In order to keep up, a company must develop a suitable strategy, which should also be communicated to the workforce. After all, especially regarding digitisation, staff need orientation and security.
Flexible working time models or the possibility of working from home should also be offered, as the new technologies simply allow this. In addition, investment should be made in new information and communication tools and in the training of workers to enable them to use the new technologies.
Finally, legal requirements must be considered, in particular with regard to data protection, as new technologies raise many questions in this respect. Therefore, larger companies often already have their own data protection officers.
Example
So, what does it actually mean for a smaller clothing store that you can suddenly buy everything online? The manager may decide to set up an online shop to offer customers the same benefits as a large online mail order company. He has already drawn up a strategy and is investing in a restructuring: fewer sales staff will be needed, but several new people will be needed to set up, operate and maintain the online shop. Of course, the applicable data protection guidelines must also be observed. Some employees will be retrained, others will be newly hired.
Remember
In summary, the challenges of digitisation for companies are:
designing an appropriate strategy
offering flexible working time models and home office
investment in new information and communication tools and training
legal compliance
Losers of digitisation
Companies that do not realise in time that it is time for change, or simply do not have the courage to do so, are among the losers of digitisation.
You are probably familiar with Kodak, the former world market leader for photographic equipment. Afraid of jeopardizing its classic film business, Kodak was slow to develop digital technology. Too slowly. Because after 2000, the traditional film business collapsed. Kodak was no longer able to catch up with digital photography and had to file for bankruptcy in 2012.
Quelle, formerly Europe’s largest mail order company, also failed to make the transition to digital because it entered the online trade too late. Another example of a loser from digitisation is the Finnish mobile device manufacturer and former world market leader Nokia.
Example
In the 1990s, Nokia had already developed a smartphone before Apple. However, Nokia did not bring the device onto the market. The reason for this was the misconception that the device was too expensive in production and that consumers would not be willing to pay the price for it.
In addition, it became publicly known afterwards that at that time there was a very bad working atmosphere in the Nokia Group, which was mainly characterised by fear of making mistakes. Some of the employees were so afraid of losing their jobs that they falsified the results of studies in order to satisfy the managing director.
When Apple successfully launched the iPhone on the market in 2007, it was too late for Nokia – the company was no longer able to make the transition. After Microsoft, HMD Global took over the company and today has moderate success.
To sum up:
If a company wants to be among the winners of digitisation, the following things are particularly important:
a corporate climate that promotes innovation
long-term thinking
a culture of failure
Anyone who prefers to discuss and test his promising product for months instead of simply testing it on the market, and thus consciously risking failure, will be left behind. In a business world that is subject to increasingly rapid change, time should not be wasted on unnecessary doubts.
We have already seen that digitisation implies numerous changes. In this chapter we will focus specifically on how companies are affected.
In the following, you will learn about the opportunities and challenges that digitisation brings to companies and which aspects they must pay particular attention to. You will also learn more about the winners and losers of digitisation, because when it comes to digitisation, the following applies
You have to move with the times, or the times move you!
Let us start with the advantages that the use of digital information and communication technologies implicates to companies:
You’ve probably all bought something online at some point and know the many benefits that you, as a customer, enjoy – you save time and stress and possibly money because you can compare offers online. As a result, customer satisfaction increases.
As the new technologies make working steps more efficient or automate them, the performance of the company can be increased. Employees are also more flexible, meetings can be held via video conferencing, etc. In addition, manpower can be saved, which reduces the company’s personnel costs.
The new technologies also enable new business models, such as online shops or the delivery of food that can be ordered online.
Remember
In summary, digitisation offers companies the following advantages:
Winners of digitisation
If a company succeeds in making smart use of these advantages, it is one of the winners of digitisation. A good example is the online mail order company Amazon, which displaced established mail order companies such as Quelle from the market with an innovative online concept involving intermediaries.
You probably know many other winners of digitisation. For example, Uber, an agency service that offers online possibilities for transporting people, or Airbnb, a marketplace that offers accommodation on an online platform for short- or long-term stays.
Another well-known winner of digitisation is the hard- and software developer Apple.
Example
In 1967, Steve Jobs and Steve Wozniak founded Apple Computers Inc. in California together with their friend Ronald Wayne.
The trio worked on the first personal computers (PCs), but soon realised that innovative ideas were needed to prevail against competitors such as IBM. In 1984, the company had great success with the development of the Macintosh (Mac), which could be controlled with a mouse and had a graphical user interface – both innovations on the market.
Finally, in 2007 the iPhone was introduced with great success – a phone with a new type of touch screen that can also be used as an “Internet communicator”. Despite initial technical problems such as congested mobile phone networks, Apple never allowed itself to be diverted from its vision. The customers were soon convinced: Apple dominated the mobile market for smartphones and tablets for years and is still one of the most valuable brands worldwide.
The example of Apple shows that companies need both a sense for trends and inventiveness as well as the courage to introduce a promising innovation, even if there is a risk of failure. This brings us to the challenges that companies face in course of digitisation. In the following section, we will take a look at the challenges that companies must face in case they want to be among the winners of digitisation.
Challenges of digitisation for companies
In order to keep up, a company must develop a suitable strategy, which should also be communicated to the workforce. After all, especially regarding digitisation, staff need orientation and security.
Flexible working time models or the possibility of working from home should also be offered, as the new technologies simply allow this. In addition, investment should be made in new information and communication tools and in the training of workers to enable them to use the new technologies.
Finally, legal requirements must be considered, in particular with regard to data protection, as new technologies raise many questions in this respect. Therefore, larger companies often already have their own data protection officers.
Example
So, what does it actually mean for a smaller clothing store that you can suddenly buy everything online? The manager may decide to set up an online shop to offer customers the same benefits as a large online mail order company. He has already drawn up a strategy and is investing in a restructuring: fewer sales staff will be needed, but several new people will be needed to set up, operate and maintain the online shop. Of course, the applicable data protection guidelines must also be observed. Some employees will be retrained, others will be newly hired.
Remember
In summary, the challenges of digitisation for companies are:
Losers of digitisation
Companies that do not realise in time that it is time for change, or simply do not have the courage to do so, are among the losers of digitisation.
You are probably familiar with Kodak, the former world market leader for photographic equipment. Afraid of jeopardizing its classic film business, Kodak was slow to develop digital technology. Too slowly. Because after 2000, the traditional film business collapsed. Kodak was no longer able to catch up with digital photography and had to file for bankruptcy in 2012.
Quelle, formerly Europe’s largest mail order company, also failed to make the transition to digital because it entered the online trade too late. Another example of a loser from digitisation is the Finnish mobile device manufacturer and former world market leader Nokia.
Example
In the 1990s, Nokia had already developed a smartphone before Apple. However, Nokia did not bring the device onto the market. The reason for this was the misconception that the device was too expensive in production and that consumers would not be willing to pay the price for it.
In addition, it became publicly known afterwards that at that time there was a very bad working atmosphere in the Nokia Group, which was mainly characterised by fear of making mistakes. Some of the employees were so afraid of losing their jobs that they falsified the results of studies in order to satisfy the managing director.
When Apple successfully launched the iPhone on the market in 2007, it was too late for Nokia – the company was no longer able to make the transition. After Microsoft, HMD Global took over the company and today has moderate success.
To sum up:
If a company wants to be among the winners of digitisation, the following things are particularly important:
Anyone who prefers to discuss and test his promising product for months instead of simply testing it on the market, and thus consciously risking failure, will be left behind. In a business world that is subject to increasingly rapid change, time should not be wasted on unnecessary doubts.
-
Add a note