Digitisation in SMEs. First steps to the digital transformation

28/07/2020 2020/07

How is Industry 4.0 actually implemented?

Digitisation as a motor for small and medium-sized enterprises? Absolutely. But SMEs need to become more agile, faster and bolder. 

Only one in four small or medium-sized enterprises has invested in modern technologies in recent years. This is clearly too less, considering the numerous opportunities that arise above all for the value creation of a company. Most of the money still flows into buildings and machines instead of into modern software. But especially in the Corona period it became very clear that digital solutions are needed to remain competitive.

It was already clear at the beginning of 2020: in order to be able to embrace the fourth industrial revolution, small and medium-sized businesses must react more quickly and develop an overarching digitisation strategy so as not to be overwhelmed by the multitude of possibilities.

Does the middle class fear digitization?

In fact, the majority of these companies still have major deficits in terms of digitisation. Only almost one-fifth of German SMEs pursue a comprehensive digitization strategy. Although many companies are expanding their digitization, most of them are doing so in very small and vague steps. One reason for this are financing problems. Even if the costs for digitisation projects remain within reasonable limits, the impression remains that the costs are far higher than the benefits which are initially perceived. This is a deterrent.

Furthermore, there are concerns about data protection and data security. These issues naturally weigh more heavily on digitisation projects than on traditional innovation projects. This is accompanied by the fear of rising personnel costs and the concern as to whether the company can afford its own IT competence. In addition, low internet speed is also often quoted as the reason for a lack of digitisation projects.

Small and medium-sized enterprises were faced with a number of aspects which made it difficult to decide in favour of digitisation and slowed down rapid action. Nevertheless, the lockdown and the move to the home office ensured that digitisation became the focus of attention. Even if an overarching strategy for digitisation was lacking.

Decentralized working makes it particularly clear that the networking of information and communication within the company is indispensable. The use of new applications and the development of internal company competencies should therefore remain a focus for medium-sized companies in the future.

Tools and Gadgets for SMEs - What exactly makes sense?

Slowly we are returning to a new normality and it is no longer absolutely necessary to conduct employee interviews via Microsoft teams or to increase the dropbox volume every month. Nevertheless, the credo for medium-sized businesses must be: "If you don't keep up with the times, you keep up with the times".  Phrases such as "Our existence is currently more important than digitalisation" are partly justified, but only partly. SMEs must not now fall further behind in digitisation issues. Now it must be a matter of modernising their own company processes in a sensible and well thought-out manner in order to increase efficiency in their daily work processes.

It does not always have to be large and expensive solutions that bring you and your company to the goal. For customer management and communication, CRM tools for customer care come into question, which are already useful for a small clientele. The time-consuming search for documents is a thing of the past with programs like Odoo. Likewise, accounting and financial management can save an enormous amount of time with tools such as FastBill. Quotations and invoices can be created faster, working hours can be recorded and the complete financial management can be regulated without producing stacks of paper several metres high. Classical software providers such as DATEV also offer paperless solutions, which nevertheless make it possible to work in an audit-proof manner. Even for small companies, a program that can also be operated while on the road pays off. For uncomplicated data and document management, applications such as Securesafe or Dropbox can be used. In this way, all employees and responsible persons can always access documents and keep them up to date. To improve self-management, employees could set up a "digital memory" and try Evernote, for example. The team version costs €12 per user per month and allows them to store, organize and search notes and ideas.

There are numerous opportunities for smaller companies to organise projects and work. With the web version and the app Asana, you can share to-do lists within a team. Up to 15 employees can use this solution free of charge to coordinate team work, share and assign tasks - and thus plan projects quickly and efficiently. Links, tasks and projects can also be listed and shared with Odoo, Zenkit and Trello applications. As an alternative to the classic Microsoft Office solution, it is worth taking a look at the Google GSuite. It brings a higher level of collaboration capabilities and, because it is completely cloud-based, does not require any software updates. In combination with the comparatively cheap Google Chromebooks, even non-IT experts find it much easier to manage the hardware and security settings can be made without extensive IT know-how.

Customer communication via e-mail is an important and effective marketing tool for medium-sized businesses. The Mailchimp program can help, for example, with the administration and sending of e-mails. It can be used to plan campaigns, use templates and manage newsletter distribution lists. The Cleverreachand Newsletter2go applications work in a similar way. And if the files and attachments are too large for the e-mail attachment, Wetransferand Dropbox can help. These file hosting services allow you to send large files. Wetransfer in particular is a good alternative to Dropbox. This service is free of charge and it is not about permanently storing files, but only about sending large files of up to 2 GB to one or more recipients.

A further essential aspect for the mid-sized business is the own representation and external effect in the Social Web and on the company-owned web page. This topic is usually neglected with SME. But even here digital applications can bring some relief. With the Canva application, graphics for social media and blog posts - but also for flyers, posters and business cards - can be designed easily, free of charge and without design knowledge. Especially medium-sized businesses are often afraid of these challenges of image processing, because this is often cost-intensive and demands additional qualifications from the employees. With the help of editing programs such as Canva or Fotor, medium-sized companies can tackle this challenge.

But there are also tools for merchandise management and logistics that make the workflow more efficient. For example, small online shops that take care of all processes themselves can use the shop system from WooCommerce. The widely used e-commerce platform is based on the well-known WordPress website construction kit and offers numerous functions for individualization. The integration into WordPress is free of charge - only additional features are charged additionally.

Many companies are taking too vague steps towards digitisation.
The majority of small and medium-sized enterprises still have major deficits in terms of digitisation.
The majority of small and medium-sized enterprises still have major deficits in terms of digitisation.

Rely on external partners

A survey by Consultport in June 2020 showed that SMEs prefer to use external partners for digitisation. Precisely because two important issues - securing existence and digitisation - are clashing and the current situation brings numerous challenges with it, it is essential to reflect on your core competencies. Nevertheless, the experience of the crisis can help you to start a successful future. ARTS can support you in coming to terms with the learning moments, highlighting positive cost and efficiency effects and using these from now on in your corporate strategy. During the crisis we have also gained experience from which you can now benefit. From working and leading in the home office to extensive digital change processes, we want to support you in transforming challenges into opportunities.

SMEs need user-friendly solutions for digital processes

There are thousands of tools on the market, but by no means all of them are useful. And even fewer are suitable for medium-sized businesses. Why? Because many SMEs have grown quite differently from start-ups, for example. It is therefore essential for the use of tools in companies that they are absolutely user-friendly. IT experts recommend paying particular attention to three criteria.

In any case, the respective tool must be partially or completely cloud-based. Why? Because cloud solutions do not require their own IT infrastructure. This saves costs, the data is stored by professionals and small companies without IT competence avoid another challenge.

Furthermore, the respective tool should be mobile. The times when every step of the process was performed on a desk with fixed programs have passed. Mobile solutions can be used on the go via smartphones and tablets and, even more importantly, by different employees at different locations.

In addition, it makes sense to use a mature tool, a number of services are now also available at a reasonable price. Numerous programs also enable complex processes such as project management and can be used free of charge or for little money. Usually a free sample month is offered, which leaves the possibility to the enterprise to decide whether the respective Tool fits or not. Most Abo models depend price-wise on the number of the users. This means that smaller companies can calculate with manageable sums.

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