Overview

Four wins: the basis for successful digitalization

The question is no longer whether companies need to digitize. The only question is when they do it and how they go about it. As quickly as possible is the first and simple part of the answer. After all, digitalization is reshuffling many cards, start-ups are conquering the market with innovative business models and those who rest too long on the successes of the past will quickly lose out. The second part of the answer is much more difficult. After all, how a company transforms itself digitally in a meaningful way is not just a question of technology. In fact, these are of secondary importance. First of all, it is about what role a company is aiming for in the new digital world and how it is changing culturally. Once the strategy is clear, existing processes can be adapted and new processes established. And only then is it worth taking a closer look at which technologies can be used for successful implementation.
Regardless of which technologies are used later, companies should create the technological and organizational basis for their digital transformation at an early stage. After all, it will never work without this – and most companies face similar tasks.

1. identify and optimize processes

There are countless business processes in all companies. However, only very few know their processes exactly or have even documented them. The more digitization progresses, the more of a problem this becomes. After all, how can processes be automated if it is not at all clear which tasks follow on from one another and how processes are made up of sub-processes? What’s more, if there is no overview of the processes, it is often impossible to see where there is potential that can be exploited with the help of innovative technologies.

Companies should therefore get clarity as quickly as possible. A suitable concept for this is Business Process Management (BPM). First, the current situation of an individual business process is recorded graphically in a process diagram – this creates commitment and makes connections clear. Optimizations can then be made in the next step.

2. restructure the organization

Unlike the operational organization – i.e. the processes – the organizational structure is well known and firmly established in companies. After all, it regulates responsibilities and dependencies – and therefore power. However, anyone who wants to successfully shape the digital transformation should question and realign the existing structures. Even in the face of resistance.

Two points are important here. Firstly, digitalization is forcing the individual departments to work together much more closely and intensively than before. The silo mentality and actions that have been cultivated over the years are an extreme hindrance to this. New structures – for example, interdisciplinary teams formed for specific periods of time – can ensure greater permeability. Secondly, new roles are needed because new tasks are being added. One example of this is the Chief Digital Officer (CDO), who is tasked with bringing business and technology together.

3. increase master data quality

Master data has always played a role. And its quality – or sometimes its lack of quality – has always been an issue. With digitalization, however, the importance of high-quality master data is increasing once again. Or rather: the pressure to act is increasing.

In the past, companies often only recorded and maintained the master data that was absolutely necessary for IT support. However, a lot of information that could actually be documented as master data is still only stored in the heads of employees. This applies, for example, to process data – such as the torque with which a screw must be tightened. A complete and uniform master data basis is essential for comprehensive digitalization.

4. high-performance IT infrastructure

An essential part of digitalization is that new technologies appear on the market at very short intervals, which can at least potentially be integrated into the existing landscape. For this to succeed, a solid and high-performance IT infrastructure is important.
This naturally affects the ERP system. In future, this must be able to process enormous amounts of data in real time, such as machine data or operating data. It is therefore worthwhile for SAP users to consider switching from SAP ERP to SAP S/4HANA at an early stage. They should also check the performance of the infrastructure components that ensure data exchange within the company and with external systems.

None of this should be seen as a singular task. Rather, the aim is to create a solid foundation for digitalization and then to continuously develop it further.