Schlagwort-Archive: Digitization

The two pillars of the digital transformation

The dream of all entrepreneurs is the generation of more and more – large quantities without additional effort, worldwide reach with almost no transport expenses, real-time transactions 24/7, subjectively determined prices at opaque costs. In the material world, this is only possible to a limited extent. A physical product consists of matter that needs to be procured, processed and assembled. In order to get the product to the customer, it has to be delivered by carriers. A contract is only concluded when the point-of-sales is open. The value is based on the raw materials and the processing steps as well as the premium that the customer is willing to pay for the item and the attached reputation. With 4.0, we are now in the age of digital transformation.

After steam power, electrical energy and the computer, the combination of digitization and interconnectedness into cyber-physical systems is now creating for the fourth time worldwide tectonic shifts in the economy and the society. The two pillars benefit from the tremendous progress of IT.

  • Digitization
    The conversion of analog signals into ones and zeros is one side of the new coin. Texts, images, sounds and soon fragrances are digitalized to binary data that can be duplicated, stored, searched, filtered, processed and transmitted. Anything that can be digitized will be directly affected by this change. For the rest of the physical things and individuals a virtual aura is created, the data cloud that makes everything and everyone trackable, assessable, and controllable.
  • Interconnectedness
    The other side of the coin is the interconnectedness. It began with the cables that enabled telegraphy at the beginning of the nineteenth century. The foundation for the computer networks were laid later in the sixties of the last century. In 1993, only 1% of the data flowed through the telecommunication networks. In 2000 it reached 51%. Already in 2007, 97% of the bytes worldwide were exchanged over these networks.

Digitization and interconnectedness are creating a whole new ecosystem that offers multiple applications: Cloud Computing, Internet of Things (IoT), Augmented Reality (AR), Smart robots, Virtual Reality (VR), Grid computing, Big Data analytics, Artificial Intelligence (AI), Blockchain, 3D-Printing (see also). Some people will benefit more from these changes than others. In any case, answers to the following questions should be found.

  • Which products and services, parts of value creation, and areas of the business model can be digitized?
  • Do we have the right number of employees, the skills needed, the right infrastructure, and enough financial resources to make these changes happen?
  • Are employees and management ready to commit to these changes?
  • Does the environment (i.e. social, technological, economic, environmental, political, and legal factors) provide appropriate basic conditions?

If there are favorable answers to the questions, you do not have to immediately digitize by hook or crook the whole business. Where to start is determined on an individual basis. The processes will continuously be based on the needs of the customers and the working style of the employees. In any case, a plan for digital transformation should be developed and consistently implemented. The decisive factor is the earliest possible execution of value adding in the digital network. The earlier the digital transformation is realized in the value chain, the higher your benefit.

Bottom line: Digital transformation is based on two pillars: digitization and interconnectedness. Many aspects can not be replaced by digitized data. However, the informational aura that surrounds things and individuals becomes ever larger – even if the refrigerator still keeps physical products fresh with noticeable cold, some features can be added that let the refrigerator become a “thinking” part of the cyberspace by counting the stock, ordering things, and suggesting healthy food. The users should not plunge like the Lemmings into the digital abyss, but to consciously find their personal starting point. The foundations are the two pillars of the digital transformation: the digitization and the interconnectedness

What really comprises digitization

Is digitizing old wine in new hoses, or is there more behind it? After IT managers have been trying to be better integrated into the business for years, they continue only to be the supporters of the departments. Meanwhile, all areas are steeped in information technology. No process is free of IT support. Even if users still think that they can do everything by themselves with office tools such as MS Excel, MS Access, MS Word and MS PowerPoint, they have to face the fact that professional data management, analysis and workflow systems form the basis for their competitive advantage. And again, an attempt is made to convince the business through the marketing of an appropriate slogan – i.e. digitization.

Not only the IT departments, but also the hosts of IT consultants are interested in the acceptance. Let’s take a closer look at the aspects which drive nowadays digitization.

  • Nothing works without network
    Digitalization lives on constant broadband access to the Internet. More or less half of humanity is on the net. In Germany, network availability is about 98% in the city, but only 36% in the countryside. As long as the society does not care about a balanced availability, the areas, which have no net, are excluded from any participation of the new possibilities. The network is the basis that enables digitization today.
  • Ubiquitous data
    The business processes generate data that describes more and more details in the course of value creation. According to IDC, the data volume is expected to increase to 40 zettabytes by 2020 (40,000,000,000,000,000,000,000 bytes). The data carries the digital content of the business. The handling of this flood of data will be the decisive competence of the future for users.
  • Barrier-free programs
    IT applications are located in the cloud in a digitized world. Access is available across all types of devices: mainframes, PC’s, notebooks, laptops, tablets, smartphones, PDA’s, RFID readers. 90% of German households have a computer (two-thirds use Outlook as an e-mail program). New models of collaboration will be possible, when access barriers, such as network availability, data protection and the use of the wide range of end devices, are simplified so that the programs receive, process and provide the necessary data in every imaginable environment.
  • Standardized procedure
    In order to be able to connect the processes spontaneously, they need agreements that ensure that the contact can be quickly established and resolved. Access is cable-based and wireless via WLAN or LTE/4G. As soon as this becomes possible outside the high-security wings of the companies, the operation of the business becomes independent from the traditional offices.
  • Digital culture
    In the digital world, businesses take place at unusual speeds and durations. For this purpose, also the employees must be able to quickly change from one idea to another. On the one hand, they must be ready to try new things spontaneously, to evaluate the results, but also to quickly let go unfavorable solutions. In order to be agile, work and responsibility have to be reorganized. A digital culture is closely related to a learning organization. This becomes apparent, when no negative consequences arise for the actors in the case of failure.

Bottom line: Digitization is a new attempt of penetrating the working world with information technology. Nothing really new happens. Long-known technologies are now so powerful that they can finally fulfill the promises of the last 20 years. The elements are now seamlessly interlinked – as long as the right basic conditions have been created. The net is as important to it as breathing in the air to people. The data are the blood cells that carry the oxygen to the place, where it is needed. The programs form the organs that process the oxygen for the survival of the whole organism. For this purpose, over time procedures have been developed to ensure operations. If the organism then also has an attitude that allows all participants lifelong learning, nothing impedes a digital culture. The above points show the essential requirements that really comprise digitization.