Digitization

"Anything that can be digitized will be digitized. And everything that can be connected will be connected. This applies equally to people, machines and products" - this quote from Timotheus Höttges, Chairman of the Board of Management of Deutsche Telekom AG, makes it clear where this development is heading to.

For companies, digitization is not an end in itself. It is always a means to an end. It serves to better implement the corporate strategy and to make necessary investments in a more targeted manner. Ultimately, the aim is to make companies sustainable and competitive.

From the company's point of view, digitization is therefore a company program from the outset that needs to be designed appropriately for the entire company and its specific needs.

This poses the core question for every company:

"In concrete terms, what does it mean for us to shape the transformation to a digitalized company and what is the best way to proceed?"

As a result, there is a need for discussion and clarification, particularly on the following issues:

• Which corporate elements (processes, organization, employees, IT landscape, etc.) are affected by transformation and are subject of the change task?
• What dependencies exist between the various elements of the company and what does this mean for the concrete procedure?
• How "digital" should the company and its components actually become?
• How do you "digitize" which corporate element and which sub-steps are necessary for each of those elements?
• What conditions must be met for the company to become "digital" at all?

The further the topic is advanced, the more urgent it becomes to answer these questions and to make clear that:

A systematic and pragmatic approach is needed!

The required procedure should ensure that all essential aspects, topics, methods, instruments, sequences of steps and necessary expertise are thought through and integrated from the very beginning. In particular, the close interaction of business and IT staff is a key success factor.

The approach therefore needs an overarching, sustainable frame. This frame is provided by a company-specific digitization strategy that fulfils four functions:

     1. "Digitization strategy as an orientation frame“

The digitization strategy offers orientation for all participants and each individual employee on the transformation journey of the company. It is an important element of information to be able to walk the path together and master challenges.

The first step is to develop the digitization strategy specifically for the company. In addition to all positive aspects, potential "critical aspects", such as appropriate handling of effects on the company's structural and process organization, must be included in the discussion and debate.

Of course, the digitization strategy should also integrate topics such as automation, cloud strategy, agility and IT strategy - up to now often the exclusive domain of IT departments - as essential design factors or design areas.

The management of the company should communicate the confirmed digitization strategy appropriately throughout the company before its implementation.

     2. Digitization strategy as cornerstone and direction sign“

The confirmed digitization strategy forms the cornerstone and points the way for the concrete digital transformation of the company and its value creation areas. It answers all fundamental questions in terms of "What and to what extent, when, where and with what priority" digitization should be done? It thus defines the specific foundations and the path of the company through the digital transformation for all those involved and affected.

     3. "Digitization strategy as operationalization aid”

The steps necessary for preparation and implementation can be derived and broken down from the digitization strategy so that a systematic approach can be ensured.

For example, the digitization strategy will specify which elements of a company (e.g. selected processes) have to be digitized, to what extent and with what priority. This information then determines the program and individual project plans required for operationalization.

     4. "Digitization strategy as a feedback instrument“

At the beginning, the transformation usually focuses on realizable changes. This means that the implementation process is initially "evolutionary" and all those involved go through a learning curve. It is therefore important to regularly check whether you are still on the "right" path.

The digitization strategy provides the necessary feedback instrument against which the implementation can be checked to ensure proper orientation.

Digitization can also lead to completely new business ideas and initiatives. For disruptive changes of this kind, the digitization strategy is also the feedback element, as these new approaches should be outlined in the strategy development phase.

Digitization continuously creates new opportunities, but does not replace topics such as optimal sourcing or operational optimization, neither in the IT nor in the business area. However, depending on the maturity level of the company and its industry, it temporarily dominates decisions within the company and ties up business and IT resources equally. At the same time, digitization creates new tasks and development opportunities for a company.

The HDP Management Consulting has taken this fact into account with a Center of Excellence "Transformation", which supports the implementation of digital, automated business processes or technical procedures based on the goals of our customers.

The prerequisite for successful digital development and optimization is basically that the changes triggered by digitization are generally known and positively accepted within the company. Ultimately, "curiosity about digitization" in the company leads to optimized and better integrated solutions that are used more rapidly. The digitization strategy as an orientation framework helps to achieve this goal.

Digitization has been used in industry in a wide variety of forms over many years. As HDP, we have designed and implemented digitization projects for many customers in a wide range of industries and can therefore rely on a wealth of experience.

On several occasions, it has proven to be useful to support the customer in digitization projects not only selectively, but to accompany them comprehensively with a procedural and technical framework. In this way we can ensure the aspects already mentioned and guarantee the sustainability of the results. The figure shows the main steps of the procedure.

The systematic implementation of the digitization strategy requires a toolbox with the right instruments to professionally handle the various tasks at hand. The right instrument must be used in the right place.

Company specific reference model = elements for the construction plan

The question "WHAT is the object to be digitized" is one of the major challenges for many companies. Often statements such as: "We have an IT department after all. They are supposed to take care of the topic, we have nothing to do with that in business". Unfortunately, this overlooks the fact that the design of business content is always primarily a matter for the business and the IT department has the primary role of enabler.

In many areas the situation is comparable to the construction of a house. The house builder may have an "idea", a "conception" of what the house could look like, and some things he can do on his own. But the construction of a house is much faster, more effective and more professional with the support of an architect. The architect uses a specific construction plan as the most important instrument, which takes into account the wishes of the builder. A multitude of design elements come together in this plan and merge into an overall picture.

The finished construction plan for a house serves in IT as an analogy for the "blueprints" that are often used - coordinated architectural images as a construction plan for IT houses and landscapes.

In order to be able to create the digital "blueprint" for a concrete company, a set of instruments is required that contains all the necessary design elements relating to the company, a

"company-specific reference model“

Based on neutral reference models, a company-specific reference model can be developed, considering the specifics of the industry and company.

This model provides a comprehensive orientation framework for the systematic examination of which potentials the company can realize with which elements of digitization.

The reference model is a necessary condition, but not sufficient on its own. In addition, it must answer the questions "Where do we stand actually?" and "Where do we want to go?"

Maturity model and assessment = elements for measurement and target picture

Every company has its own degree of existing digitization. To be able to derive measures - and digitization projects based on them - correctly, the current degree of digitization needs to be determined in a process-specific way.

The current level of digitization is determined by means of maturity models and assessments. Together with the customer, the models are specified, and company-specific requirements are taken into account.

Subsequently, the appropriate level of digitization for the whole company as well as the individual design elements are worked out in context. The desired target picture is adopted and communicated throughout the company.

The last essential question to be answered is "How do we get from our starting point through uncertain terrain in foggy surroundings to our destination?”

Since the path of digitization is always somewhat "uncertain" for all those involved, the necessary transparency and target orientation must be ensured. This is important so that employees can go on the transformation journey with their own motivation and play an active role in shaping it. For this it requires a:

Approach model - orientation for successive implementation

With the help of a well-structured process model, the overall task is broken down into subtasks that build on each other and are processed systematically. This offers the advantage that the overall implementation can be carried out in clear steps. Thus, concrete progress becomes measurable and comprehensible and in case of deviations, timely intervention and countermeasures can be initiated.

Due to the usage of agile components several tasks can be realized in parallel and at an early stage the results can be used operational.

.... or how and where do you digitize most effectively?

Through our work in many customer projects of different sizes, we understand the needs of our customers and the degree of digitalization they require. The HDP Management Consulting GmbH is a team of employees with many years of experience in business and IT management who are familiar with the digitalization of IT and business topics. In the transformation projects we accompany, we find suitable solutions to the problems of our customers. We know how proven technologies can be combined with new technologies to create "digitalization in the enterprise" with protection of investments without missing innovations. This is particularly appreciated by our customers from the medium-size companies, who want to react quickly and efficiently to changing market requirements in order to serve their markets.

Since the beginning of the discussion about digitalization, the questions of our customers have been changing and gradually expanding. While at the beginning the focus was almost exclusively on isolated initiatives, nowadays strategic questions concerning business goals to be achieved with digitization are strongly in the foreground, and not only in discussions within IT. The use of technical possibilities to optimize processes, serve customers better, relief employees and simultaneous reduce running costs are not new topics, but with the possibilities of digitalization they are again back in the foreground.

In our projects, we learn how almost all IT departments struggle to make decisions about the most suitable future IT platforms that meet the various business requirements and their continuously growing needs. Even if all parties involved pursue the same goal, a lack of coordination and communication can lead to well-intentioned isolated but at the same time competing and contradictory solutions. The same applies to the success and evaluation of individual initiatives, which often digitalize their areas of application in an optimal way but have only a limited effect in isolation. Integration within the overall framework of digitization is necessary for these initiatives. A company specific digitization strategy is the right frame of reference.

Together with its customers, the HDP Management Consulting develops an implementable framework for digitization that focuses on strategic orientation as well as the integration of individual initiatives, and that can be implemented while taking the initial situation into account. Special attention is paid to how the acceptance of the digitization strategy as well as of individual initiatives can be promoted within the company. The HDP's multi-functional team consults and assists our customers in this respect, working with them to develop tailor-made solutions from different perspectives.