Digitalisation in SMEs: What you need to know

by | 12 April 2020 | Basics

According to several studies, digitalisation in SMEs is an increasingly important topic. The most important drivers of this development are cost-saving potential, increased efficiency and the improvement of customer relations.

Data Science, Advanced Analytics and Well-developed IT structure are essential core components today and in the future that secure success and competitiveness and ensure digitisation in SMEs. The topic is so important because SMEs form the backbone of the German economy.

The studies on digitisation in SMEs repeatedly point to the fields of action that are still open. Because overall, digitisation is still going Too slow, too hesitant and too unsystematic are taking place. Especially the companies with less than 500 employees are lagging behind in terms of investments in digitalisation.

Today, with the blockchain, the autonomous Driving and the Artistichen Intelligence the next challenges are just around the corner. The need for action in the digitalisation of small and medium-sized businesses is therefore continuously increasing. At the same time, the hurdles for those companies that wait too long are becoming higher and higher. Since the digital transformation in every company takes a certain amount of time, it is worth it, as early as possible to enter the change process.

Consequences & opportunities of digitalisation in SMEs

Shorter innovation cycles, better plannability and new business models are the be-all and end-all. Digitalisation means that innovations are taking place at ever shorter intervals.

Examples from practice

Smartphone market: Apple or Samsung release a new model every year at the latest. Many other industries are keeping up with this pace - partly because customer expectations have changed.

The Car manufacturer Tesla takes this trend to the extreme: innovations are permanently integrated into the current production. Tesla owners no longer have to drive to the workshop to get an update, because these are installed directly online.

The reasons for the ever shorter product and innovation cycles can be found in digitalisation itself. Digital communication and new forms of collaboration such as video chats, messengers or content management systems accelerate work processes. Modern 3D printing processes are also making it increasingly easy to produce prototypes.      

New technologies, increasing automation as well as digital networking are leading to an ever more more effective, optimised and more agile Form of doing business. Due to its great potential, this development is referred to as Industry 4.0.

At the same time, more and more data and thus information is becoming available about where there are gaps in supply or opportunities for optimisation. Data analyses enable the current and Accurately forecast future demand, utilisation or maintenance requirements. This creates greater planning security and prevents unforeseen failures.

The Trend analysis and forecasting can also lead to the emergence of new business areas or the addition of new business models as a useful complement to the current ones. The entire production processes can change Change and improvewhen you think of the possibilities of the Smart Factory, for example.

The basis is your data

One of the keys on the way to becoming an innovative and data-driven company lies in the Collection, storage and evaluation of data. Data has enormous potential - it can bring light into the darkness. Many SMEs already have large amounts of data on their servers, but it is lying around unused.

Much of this data can provide valuable insights when used, for example, in Data Analytics projects integrated as historical data. In this way, for example Establish connections between numerous factors such as:

  • Order situation
  • Demand
  • Capacity utilisation
  • Economy
  • Social media trends
  • Weather
  • Turnover
  • Profit

Knowledge about certain correlations can become a basis for the management to Improve decisions. With predictive analytics, trends can be identified at an early stage and decisions can be made about investing in future markets independently of intuition and gut feeling.

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This video shows an overview of what aspects a data warehouse has for a company.

The goal of digitisation in SMEs

The review and Extension of the value chain can have an enormous economic impact and determine profitability and long-term survival in the market. When a medium-sized company decides to Data Science Projects it may also be that - depending on the question - additional data must be collected at certain points.

The Kärcher company, a global supplier of cleaning equipment, offers a good example of the data-driven digitalisation. The company enables its customers to use the to network the entire machine park. This way, their customers, such as cleaning companies, know at all times where their equipment is in use and in what condition it is. As a result, no device stands around defective and unused or is accidentally forgotten.

Building on this IoT platform can new Business models be developed. Those who have a precise overview of the utilisation of their fleet can monetise unused capacities and rent them out to other companies or private users, for example.

Big data in SMEs offers great growth and development potential

Compared to the past, the digital transformation leads to more and more data sources, more types of data and thus more information being available. The real economic benefit in digitalisation in SMEs only arises when these Information be transformed into knowledgethat leads to an adjustment or change in the operation.

Plant manufacturers who network their machines can distinguish themselves from the competition by a better service stand out from their competitors. If a problem arises with one of the systems, it is possible to Proactively proposes solutions be offered. Even if a machine is located on the other side of the world.

But in other respects, too, digitalisation is helping medium-sized companies with the Securing competitive advantages. Those who want to recognise trends and growing future markets early and react quickly to them need adaptable processes and agile organisational structures. Characteristics that can also be achieved through digitalisation. Reason enough, then, to anchor the digital transformation at the management level and create the corresponding framework conditions.

A look at the comparatively recent history of the digital age shows that change is developing rapidly and even bringing down large corporations. Digitalisation represents a great opportunity for SMEs to focus on their strengths and build on them: A high Flexibility and Agility, qualitative high-quality products and, last but not least, a good, longstanding Trust based customer relationship.

Do you have specific questions about your company? We offer you advice on digitalisation for medium-sized companies. Talk to our experts.

<a href="https://www.alexanderthamm.com/en/blog/author/michaela/" target="_self">Michaela Tiedemann</a>

Michaela Tiedemann

Michaela Tiedemann has been part of the Alexander Thamm GmbH team since the early start-up days. She has actively shaped the development from a fast-moving, spontaneous start-up to a successful company. With the founding of her own family, a whole new chapter began for Michaela Tiedemann at the same time. Hanging up her job, however, was out of the question for the new mother. Instead, she developed a strategy to reconcile her job as Chief Marketing Officer with her role as a mother.

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