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Sensible Digitization – Opportunities and Challenge for SMEs

01. December by DIGITAL2GO in Digitization

5 minutes reading time

Especially small and medium-sized enterprises may have difficulties finding their bearings in light of extensive digitization offers that exist on the market. A well-thought-out concept and clear goals are needed for a successful implementation so that the introduction of digital tools actually results in the desired optimization. DIGITAL2GO discussed the opportunities but also the risks of digitization for SMEs with innovation researcher Professor Christian Ramsauer from Graz University of Technology. 

In the past, flexibility and the ability to adapt to the wishes and requirements of customers have been valuable attributes by which small and medium-sized enterprises secured their competitive advantage. The louder the call for comprehensive digitization in all sectors grows, the greater also the risk of failing to recognize the appropriate time to launch such digital capabilities. In the worst-case scenario, companies may not only give up their gained advantage but also lose touch with the rapidly advancing competition. Nonetheless, companies should, first of all, perform a comprehensive cost-benefit analysis and always keep the big picture in mind when it comes to implementing digitization concepts as Professor Ramsauer of the Institute of Innovation and Industrial Management at Graz University of Technology also emphasizes: Of course, one cannot simply digitize a host of processes without first clarifying whether the costs are in relation to the sought benefit and size of the company.” Despite all ambitions, initial steps should not be implemented in haste.

Yes to digitization – but not at any cost

Integrating digital tools in various processes can alleviate individual work steps – choosing the wrong solution, however, can bring about the opposite. Problems especially arise when companies opt for isolated and incompatible solutions from multiple providers. “Ultimately, the overall benefit in a well-functioning system is always greater than the mere sum of two parts,” says the innovation expert. “For this reason, careful consideration is needed for any decision as to whether the implemented measures make sense for the company as a whole.” Thus, individual products on the DIGITAL2GO platform are summarized to complement each other and ensure maximum efficiency gain for users from various target groups. 

Before a company embarks on the journey of digitization, the expectations for this process as well as the question as to which hardware and software solutions optimally fulfill the desired requirements must be considered. The goal for such an overall concept can, e.g., consist in a joint database and its analysis by artificial intelligence for which smooth interaction among individual digital tools is absolutely essential. Companies should always remain focused on data that is relevant to them in order to gain an actual advantage. Professor Ramsauer offered a convincing metaphor: “Naturally, it makes no sense to try to kill a fly with a sledgehammer. This not only costs money but can even complicate the process.” 

Digitization as innovation?

Professor Ramsauer also gave a clear answer in response to the question whether digitization in itself is always also innovative: “Although digitization can create benefit, it does not necessarily create new value.” Even if some tools allow for the exploration of wholly new fields of business, there is always the risk that these will not be accepted by the customer. A full-scale transition to a new digital business area should always be approached cautiously. The assumption that digitization inevitably increases a company’s innovative performance and value is misguided. “Digitization processes are not automatically innovative,” explained Professor Ramsauer. “Innovating means inventing something that is both new and valuable. Therefore, innovations may certainly be digital, but not every step of digitization is innovative.” 

Building up competences as an important resource

If there is an issue that Christian Ramsauer never gets tired of emphasizing, it is the need for competence. Prior to actually taking the first steps, employees are to be trained and, in case of doubt, vital expertise is to be brought in through external consultation. According to the expert, a total digitization concept should also include further aspects such as the topic of cyber security and the protection of sensitive data. He therefore recommends consistent training and further training measures for companies. 

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