Digitization - why some people can't cope with it, while others can hardly manage their orders

Digitization - why some people can't cope with it, while others can hardly manage their orders

In his analysis, Uwe Reder asks himself why some people swear about the digital age, while for others it seems to be the greatest blessing on earth. To his mind, digitization is currently the buzzword par excellence and influences all areas of a company. Read more about digitization and its meaning for corporate businesses and startups.

Let's start unemotionally and look for a definition of the term digitization. Wikipedia quotes it as the change to electronically supported processes by means of information and communication technologies. At first glance, this sounds unspectacular and revolutionary. Moreover, it seems to be a purely technical process. On closer inspection, however, it is no more and no less than probably the biggest revolution the industry has ever experienced. Digitization turns everything upside down because it simply changes all the existing rules of the market.

To control entire factory buildings via smartphone or to be transported by a vehicle without a driver has long since ceased to be an utopia and has already become part of our everyday lives. The digital age is bringing a fast pace of life that is changing the demands on all areas of business in an extreme way. Everything is connected, technically almost everything is possible in today's world and changes are part of the norm.

What does this mean for companies in concrete terms?

Established top dogs in particular can no longer rely on a new young company not taking their place in an existing value-added chain and competing not only for turnover but also for entire customer groups. In contrast to the past, all this is possible today without any assets of their own - which makes it even worse. The high market entry barriers of the past are dissolving. Anyone with a little digital know-how can place themselves between existing producers / dealers and their customers in record time and thus compete for the market.

Who would have believed 10 years ago that automobile manufacturers and thus the German showpiece companies would have to reinvent themselves from scratch to secure their future existence?

Today's fast-moving world demands high flexibility.

For companies this means that long planning and production cycles are an absolute no-go. It is no surprise that general conditions change almost daily and that requirements are no longer set in stone for eternity. No matter what industry you are in - you have to be prepared to adapt to the market every day.

A high degree of flexibility also means short, iterative production cycles. Well-founded validations mean that today it is the customer, and therefore no longer the manufacturer, who determines what a product will ultimately look like and what requirements the product must fulfill. Companies have to go out and get in touch with their customers to find out what they want. Those who master the game and have the necessary flexibility to incorporate feedback into their own development will continue to be successful in the future.

Never before has it been so easy to enter new business areas. You just have to have the courage to leave your comfort zone, approach customers and listen to them actively. Experience has shown that these are exactly the attributes that old companies have skillfully ignored for years and that is why they have such a hard time being close to their customers today.  

Okay, so now we have found out in which areas the companies have difficulties, but where do their strengths lie? To put it in a nutshell...scaling!!! Corporate companies can use their international locations and networks to produce a product in extremely large quantities very cheaply and make it available to customers worldwide. Once a product is ready for the market, corporate companies also have almost unlimited possibilities to power up the advertising machinery to win new customers.

Once you are aware of this, you quickly realize that it makes an incredible amount of sense that corporations and startups should ideally work more together rather than against each other. Startups or smaller companies still have the proximity to the customer, can develop prototypes quickly and cost-effectively and need not be afraid that a "negative" validation will drag their own name into the mud, but rather benefit from it because they save an incredible amount of time and money for the development of a product that would later fail on the market.

However, as soon as a product is on the market, it's time for the corporate company, which should take over from there in order to make products/services available worldwide.

If this symbiosis is created and both worlds, i.e. startups and corporations cooperate with each other on an equal footing, the result will be a global product/service that can be used worldwide.

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