Digitalization – a misunderstood term?

The term “digitalization” is hard to get around – it has occupied the whole of society for years. Our lives are becoming increasingly digital, that is clear. We are becoming more and more connected, we are increasingly processing orders online, and the mobile internet has enabled apps and services that were once unthinkable.

What does digitalization mean for companies that offer such services? In my opinion, this debate focuses too much on what we, as end users and consumers, use every day. The debate revolves around new applications (such as collaboration platforms), fast internet (there are indeed studies that link the degree of digitalization of countries to the availability of broadband internet!) or that the “cloud” automatically drives digitalization.  

Challenges of digitalization in companies

But from the point of view of companies, organizations or even government agencies, digitization looks quite different: only processes that are standardised can be digitized. From my experience, I know that standardizing processes is much faster said than done, and is also underestimated in companies where many processes are still carried out manually. Many people tell me that “it works exactly the same in all departments / branches / national subsidiaries!,” but when you start to automate a process, you soon realize that this is not the case at all. Only digitalization understood in this way also leads to scalable companies.

A good example of this is sales: each project is sold “tailor-made,” even with regard to commercial conditions such as discounts, payment terms or warranties. Project or mandate processing, including invoicing, is often done in individual formats such as Word documents. Such processes cannot easily be automated in a CRM/ERP system. The consequence is increased costs and lower quality due to manual work and Word/Excel files.

Standardization and automation as the key to successful digitization

The standardization of a process is usually not very popular in the company, because employees lose flexibility (e.g. when creating an offer) and also give customers a “No, I can’t do it like this”. The fact that automation in turn frees up a lot of capacity and thus enables creativity and excellence is not recognized throughout the entire change process. Therefore, promoting standardization is essentially a management task that cannot be delegated.

In other words, digitalization in a company can only be achieved through standardization and automation, and scalability can only be reaped afterwards. In automation, CRM/ERP and other connected systems naturally play an essential role. However, without the restriction to simple, manageable and standardized processes, CRM/ERP systems remain merely “software turned into chaos”.