Digitization requires technological and business expertise
Many companies still have problems getting to grips with the concept, but there is no way for them to avoid digitization. To succeed, however, it takes a combination of industry know how and ICT expertise. Only then will completely new business models become feasible.
Whatever can be digitized will be digitized, and whatever can be connected will be connected. According to Forrester, even today, the industry average share of business generated by digital products and services is 29 percent of the total. Those surveyed thought that around 47 percent of their revenue would come from digital activities by 2020.
Digitization leads to flexible value networks
Digitization offers enormous opportunities for growth – across all industries, sectors, regions and company sizes. The move away from sequential value chains towards flexible value networks in which the value chains of the customer and partner are connected will be the cooperation model of the future. This will lead to better processes, which will improve overall efficiency and reduce costs.
DHL and Cisco forecast that the increased revenue and cost savings generated in this way will add eight trillion dollars to global economic growth over the next ten years. Growth in the logistics and supply chain industry alone as a result of digitized processes will amount to 1.9 trillion dollars. And a study by Accenture expects the Internet of Things to contribute 14.2 trillion dollars to global economic growth by 2030. Germany alone could increase its gross domestic product by a staggering 700 billion dollars by 2030.
Digitization is based on data
Push The Button
Who really thinks about the button? It’s just there. And yet: if you push it, it will trigger something – increasingly even very complex actions. Especially in the age of digitization. The latest video from Deutsche Telekom uses the simple scenario of pushing a button to explain what the Digital Division, a unit of T-Systems, the corporate customers unit of Deutsche Telekom, can do for its customers.
The complete digitization of industry involves integration of complex physical machinery with networked sensors, software and people. This results in a great deal of data. The interesting part is when new business models emerge from data that has been collected and analyzed. Scalable solutions, products and platforms link sites together, while incorporating existing data and allowing for expanded individual analysis. Data Driven Business Models (DDBM) collect and analyze the data that is required for customized solutions containing everything from sensors to networking, data transmission and process linking, right through to application operation, big data analytics and security. The end-to-end integration eliminates the weaknesses of standalone part solutions.
Digitization concerns the CxO
Digitized processes and the processing of data in the cloud allow companies to focus on their core processes. However, digitization is much more than a new IT trend. A key driver is progress in Internet connectivity – which will take another leap forward with the advent of 5G technology. The high mobility of users also plays a role, as does the availability of cheaper sensors. But there are also obstacles that have been identified; ranging from security and data privacy issues, to the challenge of implementing the digital technologies, to more general problems with the digitization of processes. Hence, this "business revolution,” which is certainly IT-driven, involves much more than traditional IT. It involves all C-level decision makers.
Cloud, connectivity and security as the basis of digitization
For digitization to succeed, several requirements must be met. For example, a partner with extensive industry knowledge who is able to support a long-term strategy as a "trusted advisor." After all, digitization often affects entire process chains, which can look very different from one operational area or business sector to the next. There is also a need for a partner who can advise impartially and provide customized, vendor-independent solutions.
On the technology front, digitization is based on two pillars. First, a scalable cloud platform, which allows companies to start on a small scale and yet supports business growth needs. And second, secure and stable connectivity enabling the highly networked scenarios of the Internet of Things (IoT) and Industry 4.0 at any location and with any device.
It is particularly important for companies to remember that digitization will only be successful if the cloud and IoT solutions are able to guarantee the security of their corporate and customer data. Security "Made in Germany" – that is, delivering products and solutions from data centres in Germany, which are subject to strict German data protection laws, with reliable trust centres in Germany issuing digital certificates in Germany – offers you this guarantee.