Digital transformation: Where does your company stand?

Reading time approx. 6 minutes
Text: Juliane Gringer
Photos: Fotolia – peshkov, Die Hoffotografen Berlin

As part of the German Federal Ministry for Economic Affairs’ Mittelstand-Digital initiative, the BSP Business School Berlin has developed a guide to help companies determine their current level of digital maturity. Dr Thomas Thiessen, dean of BSP and head of the Mittelstand 4.0 Centre of Excellence in Communications, explains the keys to a successful digital transformation

Dr Thiessen, why is it important for companies to know where they stand in terms of their digital transformation?

It is extremely important that companies assess their digital maturity so they know the next steps to take in their digital transformation process. After all, the following steps are all about applying these to specific internal company processes. However, it is not enough to simply determine a general status quo regarding the use of technology, because from the point of view of business owners, there is also a lot of work to be done when it comes to employees’ attitudes towards digital – and other – innovations. And from a research perspective, the greatest need for action lies in the development of viable digital transformation strategies that have an impact on the corporate culture. The only way to identify the strengths and weaknesses of a company is through this kind of nuanced assessment – and only on this basis can they develop optimisation processes.

You developed a guide at BSP Business School Berlin that companies can use to determine their level of digital maturity – what does it cover?

The ‘Digital Transformation in 5 Steps’ guide helps small and medium-sized enterprises gain an understanding of the rather abstract topic of digital transformation in five steps. In our model, the company first analyses the degree of maturity of the respective departments on the basis of the following six dimensions: employees, culture, technology, customer experience, leadership and strategy. In this process, the individual dimensions are weighted according to relevance. The strategy dimension plays a particularly important role, which is why it is weighted more heavily when determining the company’s degree of maturity. The results analysis then distinguishes between four stages of digital maturity: beginner, intermediate, advanced and expert.

What are the steps in the analysis process?

First of all, companies must examine which value chains are most important to them and where digitisation can play a pivotal role in business performance and corporate management. Not every company has to be completely digitised. Instead, the aim is to identify the parts of operational processes in which digitisation is either absolutely necessary or at least offers considerable benefits. In each case, there are points of contact with suppliers or customers that must be incorporated into the digital transformation process. These external factors must be ‘priced in’ and taken into account when preparing a digital transformation strategy to ensure that the topic is approached systematically. It is also important to ascertain at this stage whether all the information necessary to make decisions is actually available. A preliminary assessment is essential for all this.

Once a company has determined its degree of digital maturity, what happens next?

Here are some questions that business owners frequently ask after such an analysis: How do I begin the digital transformation process? How much will the company change as a result? What will my role as a leader look like in the future? Lecture programmes and scientific models are only of limited use in this context. Instead, sensitive management means practising personally changing one’s position during change processes, including with outside help. After all, everyone has a different idea of what digital transformation really means. We cannot discount managers’ willingness to keep up and keep their heads above water with information and training during this tsunami of digital transformation. Psychology says, however, that people react to overwhelming situations by taking protective measures without even being aware of it themselves. In management, self-control is required at all times. If, on the other hand, unconscious patterns take hold, it is frequently suppressed. It is precisely these patterns that need to be made transparent to the manager. Afterwards, the defined change management steps can be implemented in manageable portions.

How should companies kick off the digital transformation process?

Like all major strategy projects, digital transformation always begins by raising the awareness of the company’s employees. Change begins in the mind and in the heart. This is why we scrutinise the measurement of digital maturity in the context of corporate culture in our model.

»Change begins in the mind and in the heart.«

Dr Thomas Thiessen, dean of the BSP Business School Berlin

»Change begins in the mind and in the heart.«

Dr Thomas Thiessen, dean of the BSP Business School Berlin

What are the components of a successful digital transformation?

In my opinion, three factors are key: personal motivation, communication and knowledge. It starts with the motivation of the managers in their respective departments. Based on the conviction that digital transformation also means securing the future of their company, they spread their own willingness to change among the workforce. Targeted internal communication promotes the acceptance of digital changes across all hierarchical levels. The range of available methods is extensive. Innovative workshop formats, for example, help bring managers together and into a constructive dialogue with the workforce regarding digital requirements. Methodical and technical knowledge reduces scepticism and resistance to digital changes. With digital training formats, small and medium-sized enterprises can also provide their employees with advanced training tailored to their needs. It is therefore important to take everyone involved in the digital transformation process, whether as a business owner, department head or part of the workforce, down the path in a manner that reflects their own sense of identity.

Are there differences between the different industries – what applies to transport and logistics?

Regardless of the respective industry and regardless of the focus – B2C or B2B – almost every company has the potential to digitise processes that have been analogue up until now. Whether and to what extent it makes sense differs considerably under certain circumstances. For some businesses, it may be wiser to opt for the deployment of computer-aided financial processing than to take the plunge and implement warehouse logistics with RFID transponders and 24-hour monitoring. But no matter how extensive the digital transformation process is, the first step is determining the status quo. The goal is to remove the rose-tinted glasses and critically assess – without judging or distorting – what is actually happening at the company and also what external dependencies may exist. An overview of outsourced processes is of particular relevance for transport and logistics.

Digital transformation is a term that encompasses a very complex topic. This must have a negative effect on many when it comes to digital change processes?

That is correct – and in light of this, it is often difficult for those responsible to find the specific, appropriate steps for the company and to get started. That is why it is important to share practical examples and to outline a policy of small steps. In my opinion, conveying methodical knowledge on change management and offering practical cases to help get started with digital transformation is essential. Against this background, companies in Germany can, for example, take advantage of the very valuable Offers to help get started within the scope of the German Federal Ministry for Economic Affairs and Energy’s ‘Mittelstand-Digital’ initiative free of charge. These explain and compare nuanced models for determining a company’s degree of digital maturity. Our Mittelstand-4.0 Centre of Excellence in Communications is also a part of the Mittelstand-Digital initiative.

Who else can help?

From my point of view, influential business groups such as chambers of commerce, professional associations and business development agencies play an important supporting role. They can break down existing barriers between industries, initiatives and interest groups and initiate a comprehensive transfer of knowledge. Working with companies has shown us that they often lack the time to deal with the subject of digital transformation. Owners of mid-sized companies rightly think in terms of costs and benefits. The financial aspects and effects of digital transformation must be clearly recognisable and precisely calculable – day-to-day business has to go on. In this respect, every company should consider hiring an internal change agent or using relevant external service providers.

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Digital maturity analysis at BPW

BPW conducted a digital maturity assessment at the end of 2016 to determine where the company stands on the subject of digital transformation and to identify appropriate measures. Initially, an external consulting institute used an extensive online questionnaire to survey employees about their views on the status of BPW’s digitisation of products, processes and business models. ‘In the context of the survey, however, we also wanted to assess the ‘soft’ factors: what about change competency, how do employees work together and communicate, and what are their attitudes towards digital transformation? These are critical success factors for leveraging the potential of digitisation,’ explains Marcus Sassenrath. The founder of the BPW Innovation Lab in Siegburg supervised the digital maturity assessment at BPW.

This was followed up by further qualitative interviews with employees and managers. ‘Based on the results, we were able to identify the most important areas in which we need to take action,’ says Mr Sassenrath. In workshops with the company’s various departments, he also asked about individual perspectives in order to define specific tasks. ‘I think the whole maturity assessment process was also helpful in bringing employees into contact with the issue of digital transformation and raising their awareness of it,’ he explains. For this reason, establishing a common understanding of the topic of digital transformation was an important step, and Mr Sassenrath formulated a definition of the opportunities, challenges and possibilities that lie in transformation for BPW.

The company is constantly pressing ahead with these changes, and doing so with success. In 2018, BPW was named Digital Champion by Focus Money magazine; in the same year, Capital magazine named the BPW Innovation Lab Germany’s best think tank. And there is more to come: ‘Our most important tasks at the moment are supporting the digital transformation process with appropriate IT and encouraging collaboration. One example of this is the BPW Innovation Lab, which allows us to stay in touch with the market and, together with our customers, determine which modern solutions the players in transport and logistics need.’

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