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Technology, management, users: What really drives digitalization?

13. August by DIGITAL2GO in Digitization

digitalization and automatization via tools by DIGITAL2GO
8 min read

Knowing who – or what – determines the path to digitalization helps companies to take concrete steps forward: from implementing innovative tools to digital leadership and data-driven transformation.  

Is new technology the reason for fundamental changes? Or is it an amplifier for already existing trends? If one takes a closer look at the developments in various sectors, technical innovation is often not at the root of big transitions. Rather, disruption can usually be traced back directly to user behavior.

How companies deal with changing customer needs therefore has a significant impact on their own digitalization processes. The search for the best place to start with the first steps or the next phase often ends with user behavior.

Users as the drivers for digital transformation

Established retail companies, for example, who continue to lose market share, often have difficulties because their offerings span nearly the entire value-added chain. Along the path where customers first gather information about products, purchase, use, and dispose of them, innovative competitors identify weak points and take advantage of them.

And so, Amazon’s success is due in part to the fact that the American online retailer broke up this traditional value-added chain. Individual customer activities were separated from each other. The resulting development has been established for some time now, known as showrooming: customers browse through stores, note the products they want, compare prices and finally order them online.

If a company identifies a new opportunity to offer something better at a particular point during the customer journey, it has already set the cornerstone for lasting success – there is no need for revolutionary technology. Just think of how you yourself react to a chance to save time or money by comparing prices or dispensing with unnecessary trips.

Digital leadership: pursuing progress with agile management methods

Classic examples like Amazon’s expansion from books and other media to a diverse product range was driven in part by changing user behavior. They also show that digitalization often requires rapid reaction to market developments. And although agility might seem to be just the latest buzz word, it has been firmly established in management methods in the tech sector for more than a decade.

Development, testing and adaptation is therefore not just the preferred way to develop software. Companies that have to adapt repeatedly to new situations have long since applied this agile form of management more broadly. Along with more flexibility instead of rigid processes, digital leadership – as this form of management is also known – also means a strong focus on customers and their needs.

In order to develop products and services with a stronger focus on user benefit, companies have drawn on widely varying techniques: design thinking, for example, trying to create new solutions from the user’s perspective. Or rapid prototyping, the fast-paced production (and, where necessary, rejection) of prototypes with the help of 3D printers. Data-driven methods are also becoming increasingly significant in management.

Innovative tools from new technology

Big data sounds like a complex topic—and it is. What it boils down to is, at least at first, rather simple to sum up: it is possible to use large and dynamic data sets to evaluate measures taken, which in turn can be used to inform future decisions.

In this context, qualitatively valuable root data becomes especially important: with reliable product data, such as that generated by the mobile product scanner MultiScan, for example, processes and storage space can be optimized intelligently. The implementation of data-driven methods such as this one is of course not restricted to setting up logistics procedures. There are already numerous tools available for evaluating the success of digital sales channels or improving employee and customer satisfaction as well.

A company that wants to make the most of the constant flood of data should begin by simply taking stock of the status quo. This should answer concrete questions: What data do we already have? What data do we still need? And how can we make use of them? The relative importance of various topics depends, to a large degree, on the sector. For example, predictive maintenance plays an important role for an industrial enterprise – data-driven early warning systems alert personnel to necessary maintenance work, even before errors occur.

The effects of the COVID-19 pandemic were another clear demonstration that digitalization is driven by a wide variety of factors. The interplay of technology, management and users also shape the path forward – especially in exceptional situations. Companies that openly and consciously engage with their own status quo have thereby already taken the first decisive steps forward.

This also enables them to implement necessary changes without being pressed for time. After all, those who recognize the dynamics of digitalization and is familiar with its influencing factors can decide which innovative tools are right for them – and with their company, help to actively shape the world as it continues to develop under the influence of digital business.

Digital transformation is often much less complex, however, such as simply using the correct software to coordinate work and cooperation across the company. Relying purely on e-mail rather than instant messaging services often comes along with some loss of efficiency, which could be prevented without any significant modifications. This example illustrates that companies already profit from a fast and easy path to digitalization by replacing existing software with a better solution.

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