Practical examples

From digitization to a digital transformation

Digitization is mandatory, whereas digital transformation is optional. Marcel Stocker, Managing Director of Digital Enterprise, shows how small companies also successfully deal with the optional element in practice.

To find your way in the digital world of business, it helps to distinguish between the terms digitization and digital transformation. Digitization refers to when companies implement their current business processes using digital tools, such as moving from a printed customer magazine to an online newsletter, setting up an online shop that manages customer data in a CRM system or controlling production processes via computer. The aim here is to meet current customer expectations or to improve efficiency. In this sense, digitization is an evolutionary development to keep pace with technology. It is also a prerequisite to allow the company’s digital transformation to take place at all.

In a first stage, a company must use digitization to implement its existing business model with digital tools. The digital transformation can then get under way in a second stage and its range of services or business model are aligned with current and future customer requirements.

How will the company’s core products or services be used in future?

In contrast, the company’s digital transformation is revolutionary. To undertake it, the small business must focus on a long-term horizon and generally also be willing to make more substantial investments. It must consider how its own core products or services will be used in future and how current technology can modify or enhance them to meet new customer requirements. The following two examples show how this works in practice:

  • Here is an example: a garage, which digitized its business with an online booking tool and workshop appointments via tablet, explored the future of mobility. The company considered whether customers would continue to own their own vehicles in the age of electric and self-driving cars or whether they would increasingly use carsharing. The garage owner came to the conclusion that carsharing had potential. He therefore sought and found a solution to quickly convert his second-hand cars into rental cars available from the site. Now he is not only a carsharing provider but also supplies conversion technology to other garages.

    In the first stage, the garage digitized its operations by providing online bookings for customers, workshop appointments via tablet and customer information etc. using Whatsapp. In the second stage, the garage digitally transformed as a company by adding carsharing vehicles to its existing range of services.
  • Another example of digital transformation at SMEs is a drinks supplier operating locally which digitized its processes for event deliveries to develop a new business model. Event customers previously contacted the drinks supplier by telephone to place their orders. Drawing on many years of experience, the drinks supplier determined requirements based on factors such as the number of visitors and the duration of the event. To simplify this process and to standardize it within the company, the managing director now uses an online configurator. Customers enter the required information themselves and the configurator automatically calculates the order quantity. The aim is now to set up a national platform which other drinks retailers can also use.

    In the first stage, the drinks supplier digitized its operations by creating an online configurator for event deliveries.&  In the second stage, the drinks supplier digitally transformed as a company by setting up a national online platform for event deliveries.

About our expert

Marcel Stocker supports SMEs during their digital transformation as Managing Director of Digital Enterprise AG. The business economist (FH) now develops digital products and business models together with customers and draws on his wealth of experience in e-commerce, online marketing and digital projects as well as his extensive expertise in the field of digital trends and opportunities. Before joining Digital Enterprise, he set up the online platform for autoricardo.ch as Managing Director and worked as a coach for an organization providing support for start-ups in the digital sector.

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