top of page

Digital Transformation - The Worn Buzzword

Updated: May 15, 2018

Person drops coins in a jar. More coins are on the desk.

Please find the german version of the article here

The Buzzword of these days is "digital transformation". But it has been used already too frequently and everywhere you can read "digital transformation" as the key to success for companies. Everybody is speaking in good sounding and theoretical concepts, which too often not even find their way into the companies in the original shape. You are more likely to face a sober reality - good sounding "best practice" concepts just working on the paper.

Of cause, this is a bit to dramatical picture, but looking at the practical side of such digital transformations, like a concept was previously describing them, it is bringing the stuff down to the point.

Many SMEs (small and medium sized enterprises) facing very practical problems when it comes to the digital transformation. As first the managing directors needs to see the demand and as second they need to know what the "start" of initiatives will mean for the company. Traditional SMEs are less experienced in this area, which is not a problem at all, but often the main challenge is that the management does not see why things needs to change in their companies to stay competitive. The digital transformation turns into a buzzword within those companies and the daily business makes them fade out. Weeks or even months later usually companies coming back to their agendas with innovation coercion, C-Level asking for improvements and things restarting again… for a while.

Sounds familiar, or rather not? If somebody can't confirm then it could be because they usually working with corporations which are much more willing to follow new ways, or is working with a SME that is ready for the innovation.

SME Insight

It is important to understand the anatomy of SMEs and that for many of them it is not really possible to look outside the proverbial "box". For sure, this is a risk because missing forward orientation can rip the ground under their feet, regardless of the size of the company. Here comes the reality - SMEs don't have in the most cases change management, innovation-committees, organized project management, special matter expert is not a common role naming but in the same time the basis of the economy is built on their shoulders.

In summary, SMEs have to speed up but they need as first to work on the organisational foundations before starting any initiatives.

SME - digital transformation and the real meaning

One of the major tasks is to give digital transformation a real meaning in an individual context within a company. Reaching out for new landscapes, redefining your company in a digital manner sound good, but for the most SMEs this is to abstract. It has to be much more practical as there is some fundamental work to be done first. Before sharing all the solutions and concepts there is a need to find out the maturity level of the company - which knowledge and experience is existing related to projects, how the cooperation between the departments within initiatives is regulated and if there are even companywide initiatives. At the beginning there is no right or wrong approaches within the SMEs. The structures and processes has grown as an answer to the business requirements and the practical need to keep the business running. At the end of the Analysis, it could happen that basic structures needs to be broken up and changed to match modern approach concepts as a foundation for further initiatives. Here we need to talk in values and savings, in measurable sizes and less in abstract concepts like visions. The management needs to get a simple possibility to distinguish between the status-quo and the changed structures. The first thing that switch to the main scope is the topic "Quick-Wins". It shown in the past that the best approach for SMEs it is to get things moving with the support from experienced outsourcing teams. SME companies get quick access to capacities, without the need to search for each single person and without the need to hire them directly.

Is speed the key?

Yes and No - this is of course a comfortable answer but let me explain a bit. If the SME is in a strong competitive environment, a targeting initiative can be the key whether it will be at the top or just trying to run behind the competitors. However, these extremely time-critical scenarios are often not the real case, as for SMEs there are some other rules because speed can be here a driver for mission critical issues, as the necessary structures for running such initiatives are simply missing. The advantage here, we can assume that other traditionally oriented SMEs have the same problems and therefore there is no real reason why they should be one step ahead. Intelligent outsourcing is making the real difference as key positions can be filled in the right order and there is no much need for fixed resources. Means specialists join just to the part of the work they need to do and once a stage has been passed they hand over to others, which have to pick up next stage. This kind of flexibility is making the difference - all SMEs are moving at nearly same speed until somebody is starting to increase his capacities. Finally the main difference is the price for the capacities - with outsourcing SMEs saving money and can even reinvest savings into more capacities, better specialists and more advanced cloud technologies.

The speed of such initiatives needs to be in balance between the financial possibilities and the competitors environment. The more time critical, the more expensive such initiatives will become.

Pragmatic and honest

As long as the Management is in general interested to make the company economically and future- oriented , with the knowledge that the action also belongs to the wish, there is a basis for such initiatives. Digital Transformation as a naming is not relevant - it is all about make things simpler, processes more automatic, establishing of standards and interfaces, or in summary cost reduction and in the same time increasing of digital capacities within the company. By creating of such foundations and establishing of a company-wide awareness for changes, even a traditional-oriented company can become a digital leader.

bottom of page