The digital transformation is advancing in all areas of life. In particular, companies have realized in recent years how vital digitization is and what potential lies behind it. In 2020, the corona pandemic made it increasingly clear what advantages companies digitize their business areas have. A digital workplace and various other measures are an essential start for the digital transformation of your company. This article will find out why 2021 is the perfect year for digitization and how you can bring it into your company.
Definition: digitization and digital transformation
Originally, digitization refers to converting analog formats to digital formats and the processing or storage of these in a digital data system. However, this definition has lost much of its importance in recent years, and the term digitization has been expanded in a different direction. Today digitization is considered a very extensive megatrend, which runs through all states, society, economy, and everyday life. Digitization describes the targeted and consistent exploitation of the potential that digital technology brings with it. This term includes software such as apps or online shops and hardware such as new computers or more modern machines. The introduction of intranets or the switch from letter to e-mail communication are examples of digitization. It becomes clear that this process has already reached many companies and is being practiced.
The digital transformation is a synonym for the expanded term digitization and is used more and more for it. More precisely, the digital transformation takes a closer look at companies and describes an ongoing and well-founded change process in digital technologies. A digital infrastructure, also known as information technology (IT), provides the basis for digital transformation. The essential components are digital infrastructures such as intranet or computer hardware and various software applications such as apps, web applications, or management software. Also, there are digital business models such as online shops, which are enjoying increasing popularity. For many modern and very successful companies like Zalando, such a digital business model is the basis. But traditional companies like OTTO have also relocated their primary business to the digital world and are a successful example of digital transformation.
Advantages of digitization in your company
Many companies already benefit significantly from the measures taken for digitization. By using different digital formats, companies gain a market advantage and create a more productive workplace atmosphere. Digitizing your company brings the following benefits:
- Simplification: With the help of innovative digital software, many company processes can be simplified enormously. Digitization brings benefits in many areas such as communication, production, or logistics automation of processes. This saves a lot of time, mistakes are avoided, and process costs are reduced.
- Flexibility: Thanks to digitization, meetings and personal conversations can be held spontaneously at any time using video calls. This way, arrangements can be called quickly, even if not all, employees are personally present. On top of that, so too discussions with partner companies can also be carried out in this way so that technical support no longer has to be on site. For example, you can spontaneously contact your design agency and make possible changes directly via a cloud. Technology and software make it easier for companies to take over many work steps themselves, such as accounting matters, thanks to the appropriate software.
- Customer Service: Modern applications offer customers enormous added value, as customer service is much more communicative. You can solve specific customer problems via screen transfer or provide useful tips in the form of videos. This visual elimination of the issues is critical for many customers and represents a great advantage for your company. It also increases customer satisfaction and the interaction between employees and customers.
- Data evaluation: Many companies do not fully exploit their website’s potential because it has not yet undergone a complete digital transformation. With modern software, visitor data can be precisely evaluated, and well-founded data-related decisions can be made. You can find out more about your customers and can, therefore, tailor your marketing to them target specific target group tailor. This can significantly reduce marketing costs, as the software offers excellent added value. This plays an important role, especially in e-commerce; with the right adjustments, an online shop can be made more attractive and generate more purchases.
- Productivity: Your employees can work better with one another through digitization and communicate much better, and more comfortable with one another. This increases productivity significantly, and employees can manage an enormous workload at the same time without great effort. Employees are not additionally burdened; on the contrary, modern technology and software relieve and simplify a lot of work. This makes your company even more innovative, as employees can think about optimization and other measures in addition to their daily work.
- Regardless of location: Digital cloud technologies enable employees to do their work from home or even on the go. All you need is an intact internet connection. This makes everyday life much more comfortable, as critical data can be exchanged or edited together with just one push of a button. Also, many employees who work from home can stay and want to be saved, so jobs in the office.
Why digitization in 2021?
The current crisis has “forced” many companies to take a step towards digitization. Because even in the home office, everyday work must be carried out as usual and communication must function smoothly. Many companies have noticed that this concept works wonderfully and at the same time brings many of the advantages mentioned above with it. Home office, remote work, and decentralized companies could soon be standard.
Not only do the companies benefit, which saves costs, for example, the employees also benefit from it personally. Working in the home office is usually with a better work-life balance. Employees see their employer as modern and progressive, which means they have more fun at work and are more effective. You will become beautiful as an employer, especially among young people. They are already very familiar with modern technology and often bring with them many qualifications in this field. As a company, you benefit twice.
Also, general technical progress is creating an even better environment for modern technologies and software. The new 5G cellular technology sets new data transmission standards and enables swift data exchange throughout the country. Download speeds of up to 10 GB per second are possible, which means that work software and the like can be used from cloud systems without any problems. Another milestone in terms of internet speed and availability is a project by entrepreneur Elon Musk: Starlink. This is a global satellite network, which should enable high-speed internet throughout the world by the end of 2021. Rural regions are also supplied with high-speed internet, and companies can be organized much better decentrally.
State funding programs
But not only private companies want to advance digitization in the world and benefit from it. In Germany, the federal and state governments are very interested in promoting digital change and are therefore supporting companies with numerous funding programs. Current state funding programs such as “go-digital” are specifically intended to accompany medium-sized companies into the digital future and support companies with funding. “Digital Go” offers companies financial support for the acquisition of digital technologies or the qualification of employees in the field of digital technologies. The federal government provides a specific percentage of funding for each company and investment reason—50% of the costs and a maximum of € 100,000. The “go-digital” funding program is also specifically intended for small and medium-sized companies with fewer than 100 employees. A company’s digital market development, for example, in the form of an online shop or the introduction of digital business processes, can be promoted. But a comprehensive update of the IT security of a company can also be announced after a risk and security analysis. The funding amount is not relatively as high as for “Digital Go,” but it is also 50% of the costs, but a maximum of € 16,500. However, this can be a decisive reason for many SMEs to invest in digitization, mainly because the funding sums do not have to be repaid. In our article or let one of our experts advise you personally.
A new study from the current Global Interconnection Index (GXI) shows how much the digital transformation has accelerated in recent years and how much it will develop in the next few years up to 2023. It becomes clear that many large companies are planning large investments in their digital infrastructures. According to GXI, the bandwidth for private connectivity will increase five-fold by 2023 to meet the growing demand from companies. The service providers primarily want to close existing gaps at the edge of the network to bring digitization to rural regions.
Probably the most crucial point is that many companies started digitizing their respective areas several years ago. These companies already have an excellent basis to complete digitization now. So if you don’t follow suit, you will soon miss the boat and fall behind in the market due to the lack of digitization. You can also learn from the mistakes others may have made and thus create an advantage for yourself as a latecomer. It is also important to mention the existing network effects from which one can benefit and which will be even stronger in the future. In the next few years, more and more companies will use modern technology and software, bringing further advantages when working together.
As you can see, all signs point to digitization or digital transformation, and the sooner you get on this train, the more profitable it will be for you. Shortly, modern software will be standard in many areas and make work more efficient and more comfortable.