Checking digital readiness

Digitization makes it possible to run a company regardless of location.FROM CHRISTOPH OGGENFUSS*What does digitization of companies mean? "Analog and digital worlds work differently, a transformation cannot always be implemented 1:1. In the digital world, we are very much dealing with data. But where is it found and what end devices does the customer use?" Data represents a business-critical strategic resource - the "gold" of the future. As digitization continues, the nature of our work is changing, and so are the tools we use. "Imagine, with my smartphone and my notebook, I can lead Microsoft Switzerland as CEO regardless of location" a clear statement of where we already stand today regarding digitalization. Ms. Jenner believes that digitalization is already very advanced at Microsoft. This can be seen, for example, in the fact that the previously common DVD-based and postal software distribution has now been replaced by a cloud solution and online store. Customers have various market access points at their disposal, which they select according to their preferences. Based on these examples, it is clear that the software industry is definitely a pioneer in the field of digitalization. Irrespective of Microsoft, Ms. Jenner points out that well over 50% of the employees in Switzerland are already so-called "knowledge workers".And what does Petra Jenner think about the question of whether digitization is more hype or reality? Digitization is still both, because on the one hand there is a lot of talk about it, and that includes exaggerated expectations. On the other hand, it is reality because many companies are in the process of digitizing their value creation processes. Most industries are already moving in this direction. Alongside the software industry, the B-to-C trade can clearly be described as an early adopter. Admittedly, this is not entirely voluntary, as customers' multichannel access has generated pressure in the direction of digitization. Single-channel online providers such as Amazon started this ball rolling many years ago - the classic retailers had to follow suit in an appropriate form. The automotive industry has also already been clearly caught up in digitization. Online vehicle configurators take prospective buyers into attractive virtual worlds before they buy on the web. In addition, the number of chips installed in cars is increasing almost exponentially. Recently, machines and things have also begun to communicate with "M to M." Beer kegs in restaurants order the necessary supplies themselves before customers are left high and dry (NZZ am Sonntag 30.03.2014)! For Petra Jenner, costs are the priority driver - digital business processes are simply cheaper to handle and often also come with amenities for the customer. Cloud computing can be mentioned as an exemplary example. An online store had to size its server park accordingly to cover peaks. With the cloud, the additional capacity is simply switched on during peak times. A kind of virtual scaling without fixed costs for the company. Another driver is the issue of "speed". With the increasing acceleration that is not limited to business life, digitalization can provide an answer that is directly related to the aspects of cloud, mobile and Big Data. Whether the new technologies are also "driving" the current development was not the subject of my conversation. Perhaps a "chicken-and-egg" issue.And where does Jenner see the opportunities and risks of digital transformation? The opportunities lie in the cost-effective development of new markets (lower barriers to entry), addressing new target groups (social, crowd approaches), developing novel solutions (3-D printing, wearables), addressing customers and prospects in a more needs-based manner, and opening up new sales channels. The use of digital possibilities provides companies with the opportunity to further strengthen customer centricity. Of course, there are also risks associated with digitization: Consumer and data protection are the first issues Petra Jenner mentions here. The current legislation is still from a different era and must adapt to the new circumstances. But consumers also have to ask themselves how they organize themselves in terms of data privacy. On the company side, the question arises as to how customer information can be used "correctly" and responsibly. In the future, a practiced customer data policy must be the standard for companies in the digital world.And what are the special challenges of digitization? There is a risk that communications networks will become a bottleneck factor. The expansion of this infrastructure requires massive investments - but it is not clear who will bear these costs. Bottlenecks and instabilities in the networks can have highly unpleasant consequences for companies and consumers. The Microsoft boss sees a second challenge in ensuring qualitative content - the danger of undifferentiated "information one-size-fits-all" does indeed exist. The mantra "everything is free" is not sustainable. Quality content must and may cost something again. Ms. Jenner advocates a move away from news overload toward "knowledge gain" - how right she is in doing so.Quintessence from this conversation for marketing and communications: Individual industries, and also many customers, are consciously or unconsciously already far advanced in their daily digital "consumption". Companies and especially marketing managers would do well to review their "digital readiness" and define their own strategic path. The digital economy is a fast-moving business - waiting or sitting it out are not options.