Effects of Digitization on Companies : Part XIII

This part is continuation of part XII. In retail, e-commerce is often given as an answer to the digitization question. It is still unclear whether trading via webshops will become an economic success model across the board. Established companies such as Amazon work profitably with this concept, but the smaller and medium-sized internet shops cannot yet do this. This is mainly due to the high technology investments and operating costs as well as limited target groups in the industry, as the trade is not limited to high-demand clothing and consumer products.

E-commerce currently only affects a small proportion of businesses. Accordingly, digital change must largely advance in stationery shops. Intentions such as pursuing omnichannel strategies to achieve multiple sales channels depend on close cooperation between stationary and online retail. However, these close links between the platforms require extensive digital adjustments on the part of conventional retailers.

However, only every fourth retail company is currently planning offensive digitization, in contrast to 40% of companies that do not yet see it or only see it in the future. The corporate governance concerning clear responsibility has only been clarified in a third of the companies. As a result, against digital initiatives from the specialist departments, which do not take into account the company-wide orientation.

Only every second company in the retail sector takes digitization into account in its investment planning and wants to invest in this area as well. A similar number of companies are already looking for digital business models; half of the retailers are more cautious. The business and administrative processes are also only moderately digitized. One-fifth of retail companies store more information on paper than digitally. Likewise, a high proportion of media breaks in important business processes shows a considerable need for improvement in the efficiency of operational processes.

In the chemical and pharmaceutical process industry, digital initiatives, such as the digital monitoring of high-risk patients, which could lead to new business models, are the exception.

In contrast, the industry is working towards digitizing the value chain, which in turn creates the basis for additional potential. Digitization can be used to different segments and value chains in terms of products, services and customer integration.

The chemical and pharmaceutical industry is currently behaving rather defensively when it comes to digital transformation. Only one in five companies prioritize the digital transformation, the majority of companies only address future relevance. Nevertheless, half of the companies would like to increase their capital expenditure.

The chemical and pharmaceutical industry, however, delivers the worst result in terms of responsibilities for developing and controlling a digitization strategy. Management did not feel responsible for even one out of six cases. Change management programs are also hard to find.

There is also a clear need for action in the degree of digitization of operational processes. In every second company, at least 40% of the important business and production processes are paper-based. The proportion of media breaks in the processes is high. Other indicators such as the mobility of work and business processes as well as the integrated use of social media communication resulted in good progress.

The digital change in the mechanical and plant engineering industry will go hand in hand with the establishment of cyber-physical systems as well as their mutual networking and their networking with Internet-based software services. This digital transformation sometimes also generates new business models. Besides, opportunities for the advantageous use of eco-systems, the life cycle of the products and the service orientation through Industry 4.0 are given. The focus is on a new quality of use for customers, which in turn is of central importance for competition. The data generated in this way can provide great benefits for the value chain on the part of the customer as well as the supply chain.

Studies show that medium-sized companies in particular do not pay much attention to the disruptive opportunities for innovations in business orientation. The willingness for new, digitally shaped business models is not so low in any of the ten industries compared. Also, there is no clear positioning for digital transformation, and investment intentions are correspondingly low. Change management is most often ignored in the machine and plant industry.

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