Success factors for a digital transformation

Prof. Dr. Überall: The aim of a digital transformation is to be able to operate competitively on the market. Compared to Germany, low-wage countries in particular can exert a lot of pressure due to a high number of employees. Due to the high wage level in Germany, non-value-adding activities must be minimised in order to remain competitive. New, digital technologies can help to reduce non-value-adding activities.

Many customers transfer their high expectations from the private sphere to the B2B sector. For example, the ability to order online no longer triggers enthusiasm, but is seen as a basic requirement. The market must continue to evolve in order to fulfil these expectations and inspire customers with new products.

Long-term customer loyalty can be achieved through the further development of products and services. Let's look at a thermostat, for example. In the past, you only had to buy it once and there were no upselling or cross-selling products. Today, there is an additional access point, a matching app with an associated customer login and additional smoke detectors, window sensors and window openers, which are based on the same technology and therefore create synergies via the app.

Germany has grown up as a mechanical engineering country. At present, there is often a lack of awareness of the changed market conditions and the consequences for once successful products. As times change, services are becoming increasingly important and digitalisation can help to make targeted use of these services. There is a lot of innovative power available. However, this must be utilised correctly in order to remain competitive on an international level.

Prof. Dr. Überall: The challenges often start with the choice of system. Systems are used that do not fulfil the needs of the company. You should therefore analyse in advance exactly what the system is needed for and whether the system can actually meet these requirements. If the systems are not suitable, there is a risk that a transformation will fail.

Employees with technical expertise and end users should be involved in the system selection process and especially in a system presentation. They know the requirements at the working level and are therefore best placed to scrutinise the system.

The choice of implementation strategy can lead to further difficulties. There are basically two different options for implementation: top-down or bottom-up. In Germany, a top-down implementation is usually carried out. This is an implementation strategy that is controlled by the management level but does not involve the shop floor. In a bottom-up implementation, the requirements of the shop floor are taken into account without including the corporate strategy.

One possible implementation idea would be a ‘top-up’ implementation. For example, a vision must be set from the top level and dialogue with the various departments and employees must be sought in the further course. This ensures that the various requirements are addressed and a feasible implementation plan is drawn up.

Another challenge is convincing employees. Many employees fundamentally reject change and therefore also transformations and try to work against them. The right change management is important here. You need to involve both supporters and opponents of the transformation and ask them iteratively about the benefits of the steps taken. This makes everyone feel understood and included. They recognise the benefits of the transformation.

With this approach, the vision that was created at the beginning can be implemented according to the demands and needs of the employees.

A digital transformation requires a lot of time to define exactly what the company really needs, what the processes look like and which system is best suited.

Prof. Dr. Überall: Many companies don't want to take the step of digital transformation because they don't know where to start. They want to wait and see what the competition achieves with a digital transformation. In addition, many companies do not realise how quickly a digital transformation will pay for itself and are reluctant to release the necessary resources. Even if digital transformations initially seem to involve a lot of effort, they can deliver enormous added value if they are well planned and implemented.