Everyone is talking about digitalization. So are we.

Picture of Walter Manns

Walter Manns

July 26, 2019

The TCI regularly presents specialist events on highly topical issues. This September in Montabaur, it is also aimed at decision-makers in the SME sector. To this end, it is inviting small groups to attend presentations and discussions focusing on aspects of research and technology, challenges and practical examples from and for SMEs. The following article on the topic explains Walter Mannswhy this is still a hot topic and why TCI is particularly interested in SMEs. Find out here - and in detail at the exclusive TCI event in September - why digitalization doesn't have to be a scary "monster".

SMEs are moving to the heart of digitalization

Let's start with an example:

With the advent of digital cameras in the early 2000s, the existence of photo service provider Cewe was at stake. The core business of the Oldenburg-based company consisted of producing photo prints from negatives. With this technological disruption, a large part of the previous business collapsed within just ten years: more than 90 percent in total.

Numerous competitors in the photo industry did not survive this change. Cewe, on the other hand, digitized their company in a stringent manner. They started out as Cewe Digital with a total of 17 employees. This has now grown to 3,900 people, all of whom work digitally. The former core business with analog photos was already far overtaken by the company's digital sales in 2011. Cewe's turnover now stands at 653 million euros - the result of primarily digitally created photo books and productions in the online print shop.

Cewe is in a better position today than ever before, following its exemplary success in digitization. The medium-sized sDax company is unparalleled in this respect.

(Source: Handelsblatt, "Why digitalization so often fails in SMEs" from 30.3.2019)

The question of all questions: what was digital transformation?

The digitalization of SMEs has long since ceased to be an option. And yet, according to a recently published international study One in ten employees don't know what the term means. When it comes to specific approaches and "how do we get it right?", many people are still very uncertain.

It is therefore not surprising that "SMEs are exploiting the potential of digitalization. not yet fully exploited".

Typically, significantly more investment funds still flow into the traditional investment areas. According to KfW around 170 billion euros per year are invested by SMEs in machinery, buildings and equipment, but only around 14 billion in digitalization projects.

And yet KfW is of the opinion that "digitalization in the SME sector progresses".

Digitization in practice

If you ask companies about specific digitalization projects (planned or already implemented), you will find an enormous range of different topics and applications. An exemplary excerpt:

  • Paperless order processing
  • Challenges in the context of service processing (break-fix/break-down avoidance/ IOT/remote connectivity)
  • Communication flow: relevant information should be presented automatically to staff, customers and managers
  • Autonomous systems (transportation)
  • Information gathering / analytics
  • Optimization of the cost structure through a higher degree of digitalization
  • New business models
  • New virtual tools for the training/instruction of employees and customers (blended learning)
  • Automated production planning
  • Increasing importance of usability and user experience; emotional requirements
  • Changing sales channels (single - omni channel)
  • Data processing/provision/backup, cloud, managing the volume of data
  • Optimization of processes, higher automation
  • Technical innovations, use of new technologies.

This excerpt also makes it relatively easy to identify projects with incremental improvement goals and potential on the one hand and much more disruptive and innovative approaches on the other. German companies tend to pursue digitalization from within their current business model without relying on rapid and disruptive developments. At the same time, most of them see new digital technologies and adjustments to the IT system as the key challenges (HVB Study, 2018). For many, digitalization is still seen as a change that is essentially driven by technology. Is that really the case?

In many cases, this is a significant obstacle and a major difficulty when implementing digital transformation processes: the lack of focus on the business model (old - changed - new) and embedding it in a defined and future-oriented strategy. We see considerable potential here to drive forward and successfully shape digitalization in SMEs.

Change management in digitalization

This is precisely where change management comes in. As those responsible for the change process, change managers/organizational developers focus on the entire company. Numerous company factors must be coordinated and fit together so that the organization as a whole is successful "from a single source", for example

  • Strategy
  • Structure
  • Processes
  • Business model
  • Guidance
  • Working models

Together with technology, services, customers, suppliers, etc., this then forms a holistic, successful organization. So if something changes somewhere in this overall structure, then the interaction of all components (players) must inevitably be considered and (also) changed.

Company, digitalization, corporate challenges, term ranking, organizational structure, corporate culture, business model, talents, skills, KPIs, key figures, HVB study 2018, SMEs, TCI event, change management in digital change, change management, digitalization, decision-makers in SMEs, Montabaur
An excerpt from the study demonstrates the importance of change management: Here are the answers to the question of what the biggest obstacles in the company are that arise with digital change. (Image: © HVB)

Take the opportunity to discuss: Change management in the digital transformation

People and their integration into the organization and the company as the focus and success factor of digital transformation - discuss this with us! TCI is offering the opportunity to discuss these topics and uncover new potential at a specialist event on September 24, 2019. Decision-makers in the SME sector in particular are cordially invited to the TCI event. We would like to provide all participants with valuable food for thought and the right tools for change management - and more.

Further information on the procedure and participation can be found at our event page on XING and at https://ocm-event.tci-partners.com/.

You can find a further foretaste of the TCI event "Change Management in Digital Change" in the interview with the organizers. In it, Walter Manns, Martin Bergmann and Bernd Ettelbrück talk in general terms about the range of topics they will be covering and how SMEs can successfully and sustainably assert themselves in the digital transformation. Click here for the interview: Digital change, digitalization, digital transformation - just buzzwords or more?

TCI event: Some impressions from 2018

Monrepos 2018: A very successful TCI event took place last September. Under the motto "Digitalization drives Customer Service Excellence", there was a lively exchange and forward-looking added value for the participants. To get some impressions, please watch the video (click on the picture):

[dsgvo-vimeo url="https://vimeo.com/291243565″ images="https://tci-partners.com/wp-content/uploads/2019/07/tci-event_video-impressionen-customer-excellence_monrepos_seminarraum.jpg"]

The venue Montabaur is easy to reach as it is conveniently located on the A3 and ICE route between Cologne and Frankfurt. Take this opportunity for inspiration and discussion: see you at Schloss Montabaur!

(Cover picture: © Akademie Deutscher Genossenschaften ADG)

About the author

Picture of Walter Manns

Walter Manns

Walter Manns, with his more than 30 years of experience in a wide variety of areas, especially in management in elementary change and crisis situations, brings controlling and entrepreneurship to a common point.

Share this article on social media

More blog articles

More from our blog

Harrlachweg 2

68163 Mannheim


Do you have an request? With pleasure!

© 2024 TCI - All rights reserved.