Toolbox for Digital Corporate Transformation Management | CHEDTEB | Erasmus+ Strategic Partnership
Toolbox for Digital Corporate Transformation Management
Toolbox for Digital Corporate Transformation Management

What is digitalization? What is digital transformation?

The terms of digitization, digitalization and digital transformation are used in our everyday life more and more in these days and getting on intensification in connection with Industry 4.0. There is a tendency that these expressions are very often interchanged and overused in recent texts and speeches. However, we have to be aware that there are content differences between these three terms.

Let´s start from very beginning… When was digitization born? You might think that this is a new modern term which has been developed in a very close past. The opposite seems to be truth. Someone could express objections that the late 17th century is not so distant history, however first reference to digitization can be found out in work of German philosopher Gottfried Leibniz who published his thesis on binary number systems (Vogelsang, 2010). Moreover, Leibniz’s ideas formed the basis of the Morse alphabet and the Morse code, which became the standard system of the telegraph. Thanks such innovations like Morse code, which can be seen as one of the earliest widely used digitization system and laid the historical foundations for later developments in computing and digitization (Edwards, 2004, Brennen, Kreiss, 2014).

How is digitization perceived and defined? When we look in Oxford English Dictionary this term stands here for “the action or process of digitizing; the conversion of analogue data (esp. in later use images, video, and text) into digital form.” Brennen and Kreiss (2014) describe this unique process with both symbolic and material dimensions. Symbolically, digitization converts analog signals into bits that are represented as 1s and 0s (Manoff, 2006 Hayles, 2003). Brennen, Kreiss (2014) identified in their overview of digitized information advantages in comparison to analogue ones. So, digitized data can be easily stored and transferred, enabling “easy manipulation and display of these data”, affords “data compression”, that allows for “controlled storage in large volume” (Verulst, 2002 in Brennen, Kreis, 2014). Data users benefit from an additional control over gathered information. Moreover, digitization allows a high level of  interactivity between user and information (Brennen, Kreiss, 2014). Another significant aspect can be seen in using metadata in connection with digital media. However, it is necessary to mention that the legal contexts of state surveillance using metadata has become a topic of the ongoing debates around the use of digital media for surveillance people around the world.

The term “digitalization” mostly appears in connection with computerization and in this context were first published in an essay by Robert Wachal (1974 in Christof Ziegler, 2017) in which he discussed the social implications of the “digitalization of society” in consideration of its obstacles and potentials for computer-based research. Since that time, we can observe enormous increase of texts focused on digitalization and digital transformation. Digitalization means in this context transitioning the traditional way in which you do the business to a digital form. The process of digital transformation involves changing or adapting so far applied business model, and not only digitising data and processes. So, digitisation is a part of digitalisation. The new “digitalised” business model can be achieved by using digital technologies. Technologies are developing faster than ever before. Darragh McMorrow (2018) identified seven trends linked towards digital transformation in upcoming year 2019:

  • Factory Automation (factory automation technologies making production lines more efficient, resources are used more effective, and productivity will be improved.
  • Virtual, augmented, and mixed reality will be applied in several ways (e.g. in product design, production line development, technical and engineering support, training, team collaboration, inventory management, and more).
  • Digital Twin Technologies (a Digital Twin is an exact virtual replica, updated in real-time, of a physical object, process, or product. So, engineers can run simulations and where machine learning technologies can predict breakdowns, plan maintenance schedules, and more).
  • Increasing Convergence of IT and OT (OT was traditionally separated from IT, individual systems and equipment within the OT infrastructure existed in their own silos. The move to intelligent manufacturing technologies and big data makes it possible to integrate machines, platforms, and systems across all units of the business).
  • Further Move Towards Digitalisation (It involves using digital technologies to adapt or transform your business into a digital business).
  • Increasing Use of Cobots (this create opportunities for improving production lines and increasing productivity while keeping employees safe).
  • Small Batch and Mixed Manufacturing (modern technologies and processes make it now possible to increase numbers of companies). 

In the text above we have dealt with the terms of digitization and digitalization in the context of digital transformation and our ambition in this project is to understand this processes deeper to the benefit of smoother implementation into daily business.  

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Introduction

This overview of potential opportunities and risks that a company can face while implementing digital transformation should help companies to be able to evaluate the potential to succeed if they are planning to go ‘digital’. Topics such as cost reduction, new business models, improvement on decision-making and collection and use of data are just a few of many topics that make digital transformation attractive for the companies. However, there are other issues like data security, lack of standardization and other concerns that companies have to challenge with, which make some companies doubt the worthiness of digitalization.
SWOT Analysis on Corporate Digital Transformation
Opportunities
Obstacles and Risks
• Provide ease of information access
• Enhance portability within the office environment
• Offer employees more flexibility
• Improve field service response time
• Improve/enhance worker’s productivity
• Improve customer service
• Speed the sales process
• Improve customer loyalty
• Improve operational/resource efficiency
• Faster time to market
• Meeting/changing customer expectations
• Cost reduction
• Engage customers
• Identity management
• Collection and use of data
• Manage regulatory compliance
• Cloud- services
• Gain competitive advantage
• New business models
• End-to-end traceability
• Demand for better mobile experience
• Improve decision-making
• Careful of new technologies because of disruption
• Firms tend to overestimate potential challenges in new technology
• Lack of internal knowledge and skills
• Lack of management commitment
• Lack of strategy
• Displacement of workers from certain fields
• Reactive instead of proactive approach to the openness of the Internet
• Data Security
• Service- reliability Cloud computing
• Costs
• Partner ecosystems
• Customers not being “digital”
• Not seeing ways to digitalize
• Lack of standardization
To better estimate potential benefits but also potential obstacles, they are divided in four major topics: internal processes, data management, customer and internal management. By clicking on each topic, you can see further information on its benefits and obstacles.
Internal Processes
Improve the efficiency of your processes and meet your customers’ expectations regarding innovation and modernization
Data Management
Optimize your data management and improve your decision making through proper collection and use of data
Customer
Engage customers in the digitalization process and meet their changing expectations to improve their loyalty towards your brand
Internal Management
Reduce costs, offer more flexibility to your employees, gain competitive advantages & develop new business models

Benefits

- Improved operational / resource efficiency

- Improved field service response time

- Speed up sale process

- End-to-end traceability

In the Digital Transformation Survey (2) 40% of the participants stated that they improved their operational efficiency when adopting a digital model in their company. Through the digitalization of processes, the companies can leverage their data about customer service, their operations and their manufacturing. Through this they can also improve their field service response time as 79% of respondents say and it is speeding up their sales process in 78% of the companies (3). Additionally, the rise of customer expectations demands innovation and the end-to-end traceability is for 53% of respondents an important benefit (4).

Obstacles

- Lack of internal knowledge and skills

- Lack of management commitment

- Careful of new technology

- Partners ecosystems

An obstacle which hinders internal processes in companies to become transformed can be the lack of internal knowledge and skills (1,8). In the Digital Transformation Readiness Survey Summary (1) it is stated that 55% of the participants stated that their biggest challenge are the insufficient internal skills. This can have different reasons. Many of the employees in the company are no digital natives. This can be a mental barrier, which stops them from entering and be interested in the digital world (van Dijk and Hacker 2003, p. 315) This Table shows that the younger generation is more affine to the internet use than the whole population. This can possibly explain the mental barrier the older people have towards the internet, but probably also to other new technological innovations.

Another important point is the lack of management commitment as stated in the State of Industry Benchmark (4). The leader also does not really act effectively as role models for facilitating the digital transformation (1). Furthermore, the companies are reluctant and careful in adapting new technologies (3). Additionally, some of the companies might had negative experience with new technologies (van Dijk and Hacker 2003, p. 315), which might explain why many enterprises are careful when it comes to trying to use and implement new technologies (3).

Benefits

- Provide ease of information access

- Collection and use of data

- Improved decision-making

- Indentity management

- Management of regulatory compliance

- Cloud service

The highest answered benefit achieved by key technology investments was to provide ease of information access, which 86% of the participants selected. Organizations can use the leverage effects when digitalize and collect more data about their products, processes and systems. A further advantage is that they can use the data to get additional insights in their company, their products and their processes. (2) Through all the available data an improved decision- making is expected by 73% of the participants in Digitalisation Unlocking the potential (11).

Source 9 page 24

Another benefit of using digital technologies is the cloud service itself through which a more efficient use of distributed resources is possible. (11) In the figure above, the differences between the small, medium and large companies become clear as does the differences between the different countries(9). Additionally, technology can help to manage regulatory compliance as 82% stated in The next Steps in Digital Transformation. (3)

Obstacles

- Data security

- Lack of interoperability of standards

- Service reliability of cloud-computing

The most mentioned obstacle of digital transformation was the data security (1,2,3,5,9). It was not necessarily the highest ranked obstacle, for example in the Digital Transformation Survey (2) it is ranked second with 37% of the participants picking it when they had to select their top 3 barriers. In The Next Steps in Digital Transformation (3) which deals with digital transformation in general but also more specifically with cloud computing, the data security is ranked on the first place with 43%, but the service reliability of cloud computing is on second place with 27%. As the advantage of cloud computing is the availability of information, the service reliability is very important. Another potential obstacle identified by the Key Issues for Digital Transformation in the G20 (9) is the lack of interoperability of the different standards.

Benefits

- Engaging customers

- Provide perception of advanced company

- Improvement of customer loyalty

- Improvement of customer service

- Meeting changing customer expectations

- Demand for better mobile experience

One of the main reasons to start the digital transformation of the company is to acquire and engage customers. In The State of Digital Transformation Report (5) 86% of the respondents agreed that their enterprise should try to do as much as possible to meet customers where they are. Additionally, 83% of the participants of the survey agreed on the demand for better mobile experiences by customers. Delivering personal, convenient and trusted mobile experiences is central to this effort. Through the investment in technology, the company provides the perception of an advanced company as answered by 86% in The Next Steps in Digital Transformation (3). Furthermore, through the collected data or maybe the use of a CRM (customer relationship management) system, 78% of the participating companies achieved an improved customer service. This also led to 72% of them stating that they also improved their customer loyalty. (3) Those before mentioned points go hand in hand with the meeting of changing customer expectations, which 35% of the companies in the Digital Transformation Survey (2) stated as top benefit of adopting a digital model.

Obstacles

- Lack of strategy

- Customers are not "digital"

An important obstacle and additionally a big problem during the process of digital transformation is the lack of a clear vision for the digital journey. Formulating a strategy is a typical management task, but without a clear vision the whole process is unstructured and not focused. (1) Furthermore, when in the Digital Transformation Challenges and Opportunities (10) the participants of the survey were asked what hinders them from taking advantage of the digitalization 26% answered that the customers are not “digital” and no digital natives. This can be a difficult problem for a company if they use new, technology-based business models. The fear or high respect of new technology can be a mental barrier which blocks them from trying to use and take advantage of new technologies and products (van Dijk and Hacker 2003, p. 315).

Benefits

- Improved / enhanced worker profitability

- Offer employees more flexibility

- Cost reduction

- Gain competitive advantage

- New business models

A huge benefit is improved and enhanced worker profitability, which 78% of the companies in the The Next Steps in Digital Transformation (3) survey achieved through key technology investments. An additional benefit for the employees but also for the employers was their opportunity to offer the employees more flexibility when working. 79% of the employers were able to increase the flexibility (3). Adapting new technologies can also lead to a reduction of overall costs. The reason for this can differ, but through improved processes and a higher efficiency, which many companies stated to have as benefit from the digital transformation, this could be explained. (2) Additionally, 47% of the companies in the Digital Transformation Survey (2) stated that they even gained a competitive advantage and 37% stated that they created a new business model. Those two points will likely be dependent of each other.

Obstacles

- Costs too high

- Not seeing ways to digitilize

- Firms tend to overestimate potential challenges in new technologies

- Displacement of workers from certain fields

The biggest obstacle for the internal management is that the implementation costs can be very high and that their company does not have a budget, which is high enough. This problem was mentioned in different surveys as relevant obstacle and barrier. (1,2,10) Another problem is that many companies overestimate potential problems and challenges in the new technologies, which leads to being to careful or not changing anything at all (3). Furthermore, they do not have a clear business model in mind or do not see opportunities to digitalize. This is stopping the company directly from starting to digitalize their company and turning towards the digital transformation of it. (7,11) Another obstacle is the displacement of workers from certain fields, but the report for the G20 found out, that this is in general compensated (9). Therefore, the unemployment is not increasing, but many people fear for their job, which makes them reluctant to follow the path of digital transformation (Kuan and Chau 2001, pp. 510–511).

Internal Processes Internal Processes Data Management Data Management Customer Customer Internal Management Internal Management

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Since there are no rules to implement digital transformation “by the book” and every company can have different issues while dealing with the topic, we offer here an overview of main topics that should be kept in mind while planning to go ‘digital’.

In the best-case scenario companies can solve all problems and go forward, but that’s just in the ideal case. In reality, there are compromises that have to be made and which are not always welcome for every affected party. We are trying to make it somehow easier through sharing some information gathered through our research with different companies, mainly SMEs from Germany, Czech Republic and Estonia.

Opportunities and Obstacles in Digitalization; Digitalization; Opportunities, Obstacles

Introduction

Digital Transformation is not a static concept, it is a process. This process cannot be confounded with digitization or digitalization concepts. Digital Transformation includes the previous, but it concerns itself not only with the digital conversion of data (digitization) and methods of doing business and providing services (digitalization) but a deep revision of the corporate functions and business models of the companies involved in the process. In particular, a precise strategy to shape the previous culture and organization of the company should have a consistent approach to digital transformation (Caitlin, 2015).

Furthermore, different sectors are more digitalized than others (Manyika et al., 2016) and nowadays finding a real standard “analog” firm in the developed world is a hard task, at least among big companies. Moreover, considering the speed of the progress in the digitization of the firms, comparing standard “analog” firms with digitalized ones is non-sense research. Sooner or later all the firms that will not even start to pursue the digitalization process, will be out of their markets.

“Many industries, especially those that deal in physical goods, still operate in an essentially analog mode in working with suppliers, whereas those dealing primarily in information and services have moved forward quickly in digitizing their output contact with their customers (Friedrich et al. 2011, p.16).

A more insightful way of proceeding is to divide the firms by sectors. Some sectors indeed are more advanced in the process of digital transformation, other sectors are much less developed in this sense (Manyika et al., 2016, Friedrich et al. 2011).

In this work two sectors will be analysed: the banking sector (the more advance in digital transformation process) and the airline sector (a less advanced one). More specifically, examples will be provided of two firms for each sector. One enterprise will show a higher level of digital transformation in comparison to the other one and taking into account the level of digital transformation of its correspondent sector. All the firms showed how much the ladders are close to the leaders because digital transformation increases considerably the level of competition in all sectors. Another common aspect of the analyzed two sectors is that the need of deeper reflections on culture, organization and environment due to the digital transformation emerges during time among the “ladders” in both the “analog” and “digitalized” sector. In the last part of the work the SWOT analysis of the two sectors will be illustrated.

The most digitalized sector: The Banking sector

Figure 1 – Swedbank’s Customer-centric delivery model

Source: Bonnesen and Lovén (2014)

The banking sector is considered the most advanced in terms of the digitalization process and its enterprises are the most advanced in the process of digital transformation. The banking sector did not change particularly in term of services provided even in a more digital world (BBVA, 2015). However, the increasing presence of cloud-computing and Big Data analytics is bringing a new conception of the business models of the banks that we did not observe before. The changes are not so much in the services itself but how these services are provided and how the organization of the banks is changing. The new competitors in the financial sectors are becoming more and more prepared in terms of digital transformation and the banks have to react in order to survive.

Swedbank: a digitalization in progress

Swedbank is a Swedish Bank operating in Sweden and in the Baltic States. Swedbank’s digitalization process is indeed advanced. However, it appears that the comprehension of what exactly a real digital transformation means is still lacking. Its current model (Figure 1) is a “customer-centric delivery model” (Bonnesen and Lovén, 2014). The model consists the use of data to better target the customers and the services for them. Some iterations and strategies in common between IT and the Business department is started but it does not consider a real advanced revision of the culture and organization of the company, rather it stresses more the innovation culture of the bank, its capacity to use the data efficiently and the new digitalized lending process (Bonnesen et al. 2018a). However, recent documents showed very well how the digital transformation process is shaping the operations and the organization of the bank (Bonnesen et al. 2018b) even if the company does not seem to have start a real overview of it.

This firm shows very well as even enterprises in a very developed sector in terms of digitalization can be not totally aware of the effect on itself of digital transformation.



Figure 2 – Knowledge-based bank applied to BBVA’s Digital Banking Area

Source: Buvat and Khadikar (2016), BBVA (2015)

BBVA an example of advanced digital transformation

The Banco Bilbao Vizcaya Argentaria (BBVA) is a multinational Spanish banking group with headquarters located in Madrid and Bilbao. The BBVA started 11 years ago is a process of digital transformation to become a “knowledge-driven” bank system that BBVA considers far more superior than a customer-centric one. The Figure 2 created by Buvat and Khadikar (2016) shows the main idea of this model exploited in the Banking Area of BBVA.  It can be noticed how deep the reflections of the culture and organization were on BBVA during the process.  Radical shift not only in the services provided but also in the culture company are stressed. The employees of BBVA are not the same as before because motivations and skills required are not the same as before (BBVA, 2015). Support for innovation and training of the employees are highly evaluated and the importance of the “Internet of Things” and the research on Big Data is pointed out. BBVA can be considered among the best practice models as enterprise with a high degree of digital transformation in a very advanced digitalized sector.

The airlines sector: a ladder but catching-up sector


Figure 3 - The Airline Digital Transformation Framework

Source: Lufthansa Consulting (2018)

The transportation sector is considered one of the ladders among the sector in terms of digitization. However, in recent years the airlines are moving faster towards digital transformation (SAP ,2019).

The main idea in the sector is to give more and more services to the customers. However, in the future the amount of data, even biodata, will bring new costs and legal responsibilities to the enterprises (SAP 2019). The enterprises will have to increase transparency and learning how to process new information in order to make decisions and solve problems in new forms (SAP, 2019). In this sense the increasing use of Machine Learning and artificial intelligence instead of humans will change their business system and transform the firms themselves.

Moreover, the collaborations with suppliers and supporting firms will become more complex in organizational terms. An overview of the digital transformation in the airline sector can be seen in the Figure 3.



Figure 4 – Organization of Alitalia as foreseen in its digital strategy in 2013

Source: Arnese (2013)

Alitalia realized that culture and organization count

In recent years Alitalia started strategic partnerships with various firms to implement the beginning of the digitalization of the company. One example is the one with IBM (IBM 2017) that allowing  better comfortable travels for the customers in case of bad weather conditions. Alitalia recently managed to implement cloud-computing architecture (Teruzzi, 2019) in its activities.  

A recent interview to the CIO of Alitalia (Teruzzi, 2019) showed how far Alitalia arrived in terms of digitalization of their services. Anyway, in the interview is clear how the management realized during a process of learning by doing how much the digitalization process needs also deep transformations in the organization of the firm. The CIO of Alitalia referred to how the transformation was not only technical but also cultural (Teruzzi, 2019). From the organigram of the organization (Figure 4) it can be noticed how the digital strategy in 2013 of Alitalia foreseen the digitalization process inside a typical standard organization model (Arnese 2013). Alitalia case showed how the digitalization transformation process can signal the need of a deep transformation of culture and organization by itself.

 

The Lufthansa Journey

Lufthansa plans for digital transformation started in recent years but shows already impressive improvement in the level of digital transformation in a less digital transformed sector.

Lufthansa understood the problem of cultural shift that digital transformation implies and how the process is not only a simple digitalization of the activity and how the it changes the operative capacities of the company as a whole.

“Hence digital transformation requires more than the mere implementation of new digital tools and automating processes. It is truly about bonding travelers to the airline through customer-centric digital products and services, synchronizing the customer experience with the airline business model and dealing with cultural change” (Lufthansa Consulting, 2018). 

The primary goal to achieve for Lufthansa is reshaping the value-chain and the need to comprehend the importance of the corporate culture as point of success for the digital transformation (Lufthansa Consulting, 2018). The intermediation of the airlines is central to satisfy the needs of frequent and infrequent air travelers’ desires and needs. The stakeholders have to be involved in the new operations, the sales department restructured and the different airlines of Lufthansa Group had to coordinate themselves in order to achieve the new common platform in 2017 (PROS, 2018).

The Two SWOT Analyses

Table I - SWOT ANALYSIS – BANKING SECTOR

Strength
Weaknesses
• Digital transformation makes banking easier for the customers (Bonnesen et al. 2018a, BBVA, 2015)
• Digitalisation and automatisation of: mortgage, consumer and corporate lending (Bonnesen et al. 2018a)
• Reducing processing time for consumer loans (Bonnesen et al. 2018a)
• Increasing presence of possible competitors (De Falck, 2018)
• Need to adapt to a new ecosystem (BBVA, 2015)
• Some customers remain attached to established practice (BBVA, 2015)
• Never-ending process of innovation to stay on the track with technological changes (BBVA, 2015)
• Need of a incredible flexibility that encourage cultural transformation (BBVA, 2015)
Opportunities
Threats
• Protecting market position and retain economies of scale in the payment area (Bonnesen et al. 2018a)
•Possibility of serving the customers in multiple channels (Bonnesen et al. 2018a)
• Possible creation of new tools like “digital wallets” (De Falck , 2018)
• Using third party services to augment customer satisfaction (Bonnesen et al. 2018a)
• Consumers can move faster to other companies that guarantee better experiences (Bonnesen et al. 2018a) and their behavior can change quickly (De Falck, 2018, BBVA, 2015)
• High demands on information security (De Falck , 2018)
• Increasing number of regulations (De Falck , 2018)
• New entrants in the banking sector can have the advantage to not have to handle with “old cultures” and obsolete technologies (BBVA, 2015)

Table II - SWOT ANALYSIS – AIRLINE SECTOR

Strength
Weaknesses
• Shifting routine tasks from humans to business systems thanks to new technologies (SAP 2019)
• Need new digital resources to handle global growth of the travelers (SAP 2019)
• More complex travel distribution world with new competitors (SAP 2019)
• Creating brand value and guarantee customers’ loyalty (SAP 2019)
• Finding new revenue sources and increasing margins (SAP 2019)
• Optimizing operations by using technology and reducing costs (SAP 2019)
• Digital transformation helps aircraft operations (Lufthansa Consulting 2018)
• Data privacy and surveillance (SAP 2019)
• Passenger expectations are changing quickly (SAP 2019)
• Problems of integration along the airlines supply chain (SAP 2019)
• Speed of AI transformation and possibilities it is used by the faster competitors
• Data “access” (Lufthansa Consulting 2018)
• Need of people who understand the value chain, the new techonlogies and how they can be exploited (Lufthansa Consulting 2018)
• Disruption internal operative processes (Teruzzi 2019)
• Commercial trasformation journey needs (Teruzzi 2019)
• Restructuring sales department (PROS, 2018; Teruzzi ,2019)
• Changing business models (SAP 2019)
Opportunities
Threats
• New and innovative services to customers at competitive prices (SAP 2019)
• Exploiting Integrated mobility (SAP 2019)
• Frictionless travels
• Need to personalize infrequent and frequent travelers’ experiences
• Cybersecurity (SAP 2019)
• Cultural resistance (SAP 2019, Lufthansa Consulting, 2018)
• Environment risks (SAP 2019)
• Financial pressure from a competitive market (SAP 2019)
• Costs to protect personal biodata (SAP 2019)

Decision-making tree

The aim of the decision making tree tool is to map on a high level key points (see figure below) that every firm embarking on a digital transformation journey should think about. These points are often the factors that determine the success and failure of transformation.

The order of the points mapped on the decision making tree is not important. Since you need to feel confident about all of these, feel free to start from any of these points and deal with them in any order you like, or most likely even in parallel. Each headline on the decision making tree has obviously several more detailed issues underneath it. However, these will become more dependent on the exact content of the digital transformation. The headlines provided in this tool are general, and thus applicable to all types of digital transformation projects.

The key to success in digital transformation is not about mostly what kind of digital tools you choose (although that is important as well), but rather what kind of organizational changes you need to make and how you will implement and ensure acceptance of these changes. Change management is the make or break factor.


Explanations for the digital transformation success factors
  • Do you have a clear goal for the transformation?

  Understanding what do you want to achieve with the digital transformation is crucial for success. What is the business   problem you want to solve? Design the transformation to solve this business problem.

  • Have you formed a dedicated transformation team?

  Dedicated transformation team is important to ensure smooth execution of the initiative. Assigning some tasks to people   on ad hoc basis will lead to failure. Transformation team should be led by a member of your top management team to   ensure sufficient attention and prominence among other initiatives your organization is dealing with. The dedicated team   shall work with details of the transformation making sure that appropriate digital solution will be chosen for the problem   you are solving and that it will be accompanied by required changes in your organization’s processes, structures and   systems so that all key aspects of your organization will be aligned.

  • Have you ensured the support of key people in your organization?

  Support of senior management as well as other key people is important as digital transformation is likely to affect all parts   of the organization. Key people need to have a clear and shared vision about the goals of the transformation as well as the   execution plan. Adequate and well-planned communication within the organization is crucial. Planning for quick wins in   the transformation process helps to convince your organization in the usefulness of the transformation.

  • Have you budgeted sufficient funding for the project?

  Digital transformation will involve some investments, not only to digital tools but also to reorganizing your existing   processes. Also budget for providing required trainings for the organization about the digital solution and new ways of   working. Make sure you plan funding for these.

  • Have you thought about changes in processes after transformation?

  Digital transformation will not mean only an acquisition of a new software, automation system etc. It will mean changes to   your existing processes and systems in order to capture the full benefit of the transformation. Think through what will you   change organizationally.

CLICK HERE TO ASSESS THE PROCESSES OF YOUR DIGITAL TRANSFORMATION!

Digital transformation timeline

Digital transformation projects vary significantly in terms of content and scope. Also time requirement for such projects are in a wide range. Nonetheless, it is possible to map out the typical steps that take place during a digital transformation project, as depicted in the following graph.

  • The goal of BA is to define and communicate what and how the company seeks to achieve with digital transformation.
  • Depending on goals of digital transformation exact steps in the BA may differ, but typically they include:
    • Review and possibly update of company’s strategy
    • Review and re-engineering of processes and systems (as-is and to-be)
    • Identification of cost reduction and / or revenue growth opportunities
  • In this phase it is also advisable to work with other aspects presented in our decision-making tree:
    • Setting up the dedicated team for the project
    • Ensuring support from key people
    • Secure funding for the project
  • The goal of this stage is to choose appropriate digital solution for achieving the goals set in the BA stage.
  • Typically the steps in this stage include:
    • Design of the digital solution
    • Discussions with potential vendors of suitable solutions
    • Getting proposals from vendors
    • Selection of preferred vendor
  • The goal of implementation phase is to implement the selected digital solution and transform the organization in order to make the best use of new digital solutions.
  • Typically the steps in this stage include:
    • Detailed analysis and creation of technical specification of the digital solution
    • Implementation of the digital solution
    • Staff trainings on the new digital solution and new ways of working
    • Redesign of organizational structure, processes and systems
    • Cultivating digital and customer-focused organizational culture

Case studies from Estonia

Digitalization of an SME in wholesales industry

Company background

The company is a privately held SME (small and medium sized enterprise) active in imports and wholesales of electric equipment in Estonia. It was established in 1993 and by 2018 has grown to be a firm of about 50 employees working in four sales offices across Estonia. The annual sales of the firm amount to about €12 million which makes it a significant player in the Estonian market.

The company is active in B2B (business-to-business) segment only, i.e. it is not active in retail business that service private customers. The product portfolio of the firm ranges from complex industrial automation systems to simpler items like cables and switches. Typical customers include industrial companies, installation firms, retailers etc.

Need for digital transformation

The company has been successful in its activities, but the management felt that in order to make the next step in the firm's development it needed to invest in its analytical capabilities. Since its foundation the firm had been using a sale, inventory management and accounting software developed by a small Estonian software developer.

The software was well liked by personnel, it covered most of the needs of the firm and the developer had always been helpful in adding new customized modules to the software when such needs emerged. However, the software was not very handy for analytical purposes: it required a lot of manual work for retrieving necessary data from its various modules, compiling it into Excel and doing the analysis there.

As a result, people did not have time nor motivation to use all the data that was recorded in the various databases of the firm. The management felt that using these data might build a better basis for decision-making throughout the firm's value chain, i.e. supplier management, inventory handling, customer relationships and also in various support functions like personnel management, performance analysis etc.

Digital transformation process

In 2016 the firm made its first investment into a specialized data analytics and visualization software. The first step covered the sales analysis module that gave the firm a very user-friendly tool for analyzing its sales. The value of such analytical capability was quickly understood and appreciated and investment into the next module covering supply and inventory part of the business was made in 2017, which was followed up with a financial module of the software.

The first step in the process for the firm was selecting the appropriate software as there were several options available in the market. The CEO together with some key people in the organization reviewed several alternatives, chose their preferred solution and drafted a budget for the project. The rationale for the investment was presented to the board who approved the project. Organizationally, the new tool was adopted quickly and without any major problems. The software provider organized a series of trainings to the personnel so that they could get the maximum out of its possibilities. As the personnel saw how much easier their lives would get by using the tool compared to the old system, there was no resistance to it.

Results of the transformation

The digital transformation has impacted the firm throughout its value chain by raising the quality of decision-making. Sales people are better informed about the full history of each particular customer, analyzing purchase patterns of other similar customers enables making more relevant proactive sales, etc. Similarly, product analysis helps to make better decisions about products both in terms of functionality requirements as well as market preferences for specific suppliers. In terms of support functions the firm now has better information about performance and activities of each member of sales personnel, allowing for more adequate personnel appraisals. Furthermore, the system helps to better assess the need for new personnel in different areas of the firm via better overview of the workload. The new tool has improved the management control function of the firm. Easy and visualized overview of sales margins, slow-moving inventory, overdue receivables, etc. has improved firm's profitability and cash management.

The new software has cut a significant amount of time required for data analysis, which has had a positive effect on several fronts. Firstly, the time can now be spent on more value-adding work, which means that the firm can do more with the same number of people. Such released time has even allowed personnel to reflect on their other work processes, which has resulted in identification and removals of certain inefficiencies in some of the processes. Secondly, removal of the tedious manual work that the highly qualified sales personnel had to perform with the old system has increased their job-satisfaction. Thirdly, several previously dead-end disputes brewing in the organization have been solved as the new tool has helped in analyzing these issues based on data, rather than gut-feelings and unfounded opinions.

In conclusion, by making the data analysis process fast, intuitive and visualized, the firm has gained a lot of new insights about its business. The data for these insights was always there, but due to not having appropriate tools was not sufficiently used. The digital transformation has made it possible.

“As the personnel saw how much easier their lives would get by using the tool compared to the old system, there was no resistance to it.“

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Digitalization of the back-office process in security services

Company background

AS G4S Eesti (G4S Estonia) is the Estonian subsidiary company of the international security services group G4S plc. The case study is about the application of the digital business model for one of the support processes of G4S Estonia, namely the recruitment process.

G4S Estonia currently employs about 2,400 personnel, although the number of employees is seasonal and thus fluctuates a lot. The company has a high employee turnover and needs to recruit about 600 new employees annually, whereas the number of job applications is close to 7,000 annually. There are 3 people in the HR office specializing in the recruitment task. This means that on average every recruitment specialist needs to handle about 2,300-2,400 job applications coming in from various recruitment channels every year and about 200 job listings coming from more than 50 team leaders (middle-managers looking for new employees into their teams).

Business problem

The legacy recruitment process was not optimal for such a volume of workload and created various problems. The company used many recruitment channels, e.g. various web-based job listing platforms, applications through the company web-site, etc. Recruitment specialists saved applications and CVs to their computers and sent appropriate data to recruiting team leaders by e-mail. There was not one specific place for saving the applications and CVs and as a result the data was spread out across various tools like MS Excel, company intranet, e-mails, folders in company servers. It was difficult for team leaders to track the status of the recruitment process and contacting recruitment specialists for updates was needed, which in turn caused interruptions in the work of recruitment specialists. Also, there was no good overview about whether the job applicant had already applied earlier to some other position.

As a result, the recruitment process involved a lot of manual work from various parties. Certain steps in the process were unnecessarily time-consuming; there was no good overview of each job listing and each applicant, which sometimes created confusion and frustration.

Digital transformation process

In order to improve this process G4S Estonia searched for a digital solution and chose a specialised recruitment software Recrur. The transformation process started with mapping of the business needs. Based on these needs the appropriate software was selected and implemented. In the first stage the software was provided to recruitment specialists for testing to ensure that it matches the business needs. For that purpose, the business process was reviewed and certain steps and rules were clearly defined and agreed upon.

After the successful test, which was run over 2 months, the full-scale implementation followed together with training to all users of the software. In addition to that, a user manual for the software was developed. All ongoing recruitment projects were moved to the new software and every new project was handled through it.

Results of the transformation

The digitalized recruitment process fixed the discussed problems of the legacy process. There was significant improvement in the speed of the recruitment process. For example, the time-saving from making job-listings was estimated to be 22 hours for the 600 annual job listings. Also, time spent on applicant management and communication with applicant and the team leader improved significantly. This means that the digitalized recruitment process freed up time for recruitment specialists to do more value-adding tasks.

The tool raised the satisfaction of team leaders as they were better informed about the status of the recruitment process and information about potential candidates for the job listing. For the applicants it also meant an easier application process. From a regulatory perspective, the tool enables better focusing on applicant data security and GDPR.

On a more general level, the digital tool tracks the application projects and provides statistical analysis on the recruitment process. For example, it tracks number of applicants for each listing, from which channel they came from, how much time the recruitment project took, what were the activities done with each applicant etc. This analysis enables the company to further improve their recruitment processes.

“For that purpose, the business process was reviewed and certain steps and rules were clearly defined and agreed upon.“

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Digitalization and automation of an SME in mechanical metal machining and hydraulics

Metal industry Radius Machining started 14 years ago. Already then robotization got started in the company when two automatic benches were purchased. Radius Machining is engaged in metal processing and hydraulic assembly. Radius of 200 customers include, for example, Cleveron and Skeleton Technologies. Radius also makes components for several satellites, including the Estonian student satellite EstCube. Most of the production is exported to Finland and other neighbouring countries. Last year the company's turnover was 3.7 million euros and the operating profit was almost 183,000 euros.

Radius Machining automates factory as much as possible. As a subcontracting company, Radius Machining´s program changes essentially 3,000 times a year, which makes automation very difficult. So it was a wise decision not to buy a ready-made solution, but to try to understand what can be automated in production. In Radius Machining the easiest is to automate production preparation and finishing.

Benches are also equipped with automatic material feeders that allow one person to keep up with three stations. In addition, production management software is in place. All production is described on the computer and weekly plans are ready. Last biggest investments were made into a CNC device, valued 150 000 euros. There was also an increased investment in software. The company currently has 15 CNC benches, 10 of which are CNC lathes and 5 CNC milling machines. Thus, Radius Machining plans to integrate 8 new centres and some of them integrate with robot arms.

The company wants to make investments into digitalization and automation in 5-10% steps, depending on how big the profit is. Every year into a new machine 600 000 euros, what could bring back money in 3-4 years. Management sees that Radius Machining could be more effective up to 20-25%.
“The company wants to make investments into digitalization and automation in 5-10% steps.“

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Case studies from Germany

Digitalisation of manufacturing and administration processes in a SME

The company

Bomafa has developed from a traditional mechanical engineering company into a manufaturer of high-quality customized pressure valves, switches, and pneumatic and hydraulic equipment used for building pressure vessels and pipes. The company supplies power plant manufacturers, equipment suppliers und manufacturing companies. Bomafa specializes in customized solutions produced with high precision and vertical integration.

Digitalization case
Bomafa faces heavy competition on price for its quality products on the world market. To remain competitive, the company seeks to make their processes efficient and lean on both the manufacturing and the administrative side. They use SAP Business One as their ERP system and have recently started automating administrative and control processes.

Digital transformation – needs and demand

Digitalization drivers
The current driver is the need to increase efficiency, mainly in administrative and control functions. Automation is to accelerate throughput in conjunction with SAP Business One, but certain data continue to be fed manually into the ERP system. These ‘analog’ leftovers cause delays and expenditure and need to be cut out as th most immediate step. At a later stage, they will move on to smart automation collecting and transmitting sensor data over wi-fi. This is not a current priority though as structuring and analyzing large amounts of data needs to be introduced carefully.

The immediate priority is to generate cost benefits from re-organizing control and administration.

Digitalization is approached function by function and process by process. An important focus at this early stage is on staff involvement.

The process of digitalization - strategies and implementation

Once an objective and a strategy have been defined, the first step is needs analysis. This may go back to results obtained in previous audits and relies on proposals made by staff that are reviewed and examined for necessary changes. Visions of supposedly endless opportunities provided by digitalization are ignored at this stage. What follows is focused market research into appropriate digital solutions available, e.g. at fairs or through other companies and external consultants. This will result in an overview of specific options. Parallel to this, staff is approached in a process of exchange and debate on issues, solutions, opportunities and obstacles. It is essential that this exchange starts at a very early stage so that staff (both management and shop floor) can develop ownership and become, ideally, a driver in the process.

'Rollout'
The common process pattern goes like this:
  1. Conducting an internal audit of those areas, functions or processes targeted for re-organization. Identifying the problem to be addressed digitally. Gaining a rough overview of digital solutions available from the market.
  2. Discussing suggestions (benefits, risks, obstacles, scare) with staff.
  3. Defining the problem, reviewing and selecting specific digital solutions from the market. Sharing details with staff, selecting options and variants and simulating implementation in the process.
  4. Re-approaching department managers and (if appropriate) shop floor teams, presenting changes, discussing obstacles and objections and other proposals. Negotiating ultimate solution in a dialogue and development process. Process organized as interaction, in iterations if required. Major leaps ahead not always possible, small steps welcome, but visible success and higher ease of process essential.

Convincing and winning over staff – what works, what doesn’t?
Important to remember: it is staff that needs to cope with the insecurity, change pressure and blockades that come with digital transformation.

Bomafa tries to address the big picture, i.e. the development of the company. Staff are interested in keeping the company competitive. Bomafa demonstrate the specific benefit of the proposed changes for the entire company. This benefit must be evident and seizable from the staff’s perspective. Bomafa management starts off small, taking one step after another so that staff develops confidence in future developments and change.

Micro-case
One micro-case is Bomafa’s Engineering Office that is in charge of designing components, which includes technical documentation. Technical documentation is job-specific and highly time-consuming. The idea was to cut expenditure by streamlining this drafting process. For this, micro-component data were interfaced with the design process, organized as templates and assembled into pull-down menus. By selecting from these menus in a certain order the designer is now able to compose the entire technical documentation file.

As Bomafa’s products are customized, standardization can be ensured at module and component level but will not cover the entire final product. This means that some data still needs to be edited manually. Even so, the editing process has been cut short dramatically from one or several days to several minutes.

This effect was achieved by creatively combining a number of plain options and tools readily available. Delivery times have been cut short, error sources eliminated, and customer service improved. This kind of benefit is self-evident and calls for future upgrading through direct export of data from SolidWorks to SAP and documentation files. It may take time to implement this next step, but it will happen according to Bomafa.

SAP’s ERP system will continue to be the anchor of all processes and interfacing new components with it will be the main technical challenge in Bomafa’s digitalization.

Results and recommendations

Winning the agreement of staff is a major and crucial challenge. There are certainly problems innovators need to anticipate. Bomafa did encounter resistance regarding changes in processes, roles, responsibilities and use of infrastructure. Bomafa is a company of longstanding tradition with high staff loyalty. It is company policy to negotiate compromise and solutions consensually. This means that blind investment into new technologies that are then imposed on staff is deemed dysfunctional.

Emphasis is on continuity but not perpetuation of the same. In Bomafa’s eyes, re-using existing infrastructure has its pros but equipment and processes need adaptation and addition.

One success factor in Bomafa’s digitalization is the fact the company created the support position of an internal chief digitalization co-ordinator who can concentrate on new processes and change management and interface internal and external knowledge and skills.

As regards organizational culture, progress in the sense of staff’s ownership of processes has been made. This has not necessarily brought about changes in hierarchies, but the way issues are approached has changed. In this, relying on internal skills and only selectively using outside consultancy services has proved beneficial in the sense of know-how acquired now remaining inside the company.

Considerable investment was made in mediating and negotiating changes and internal knowledge buildup, a process that was fully supported by senior management – a sine-qua-non-condition of successful digitalization.

Digital experience
Lessons learned, and recommendations are as follows:
  • Clearly determine the benefits of and needs for digitalization for yourself and for staff. Digitalization is not an end in itself.
  • When reviewing digital options check for match with the comapany’s needs and culture and manageability. Start from analyzing needs and ignore hype and fashion.
  • Give high and early priority to communication with staff. Present company functions in their interaction. Identify weaknesses together with staff. Mere exchange may sometimes impulse change.
  • Do seek staff’s consent and do not confront them with ready-made solutions. Do offer or, if required, even press for approriate training.
  • Enrich the corporate culture with a spirit of learning, development and readiness for change.

Major and minor changes, business opportunities and new business models as a result of digitalization

Tangible results
Bomafa acknowledge that they are at an initial stage. The major change that occurred was that competitiveness has increased even at the current early stage. Bomafa has cut costs, flexibilized services and trimmed delivery times thanks to the first steps taken toward digitalization. Even as a highly specialized manufacturer of customized equipment with only modest opportunities for standardization they have started modularizing in order to prepare digitalization. Efficiency gains are, however, currently made by streamlining planning, documentation and administration processes with the help of digital tools.

The idea is to make, in the long, run optimal use of the flexibility SMEs can offer e.g. in terms of service and delivery times. This can be improved by digitalization and will also reduce overheads and improve customer bondage.

Further changes introduced focus on processes such as planning and preparing installation that have been made more efficient.

A new CAD/CAM system now distributes software just-in-time over wi-fi to machines performing operations on an item. This kind of development is picking up momentum.

Organization
Digital transformation has produced new approaches, but hierarchies and core processes and structures have largely remained unchanged. What has changed considerably is staff involvement and ownership though.

The biggest changes occurred in planning and commercial processes and function such as workforce deployment, maintenance, invoicing etc.

One of the functions due to change soon is maintenance and installation where planning, documentation and commercialization will be re-organized.

Digitalization has not yet created new products or services or standardized production processes. On an internal level, standardization of components has led to savings but Bomafa’s overall business model has not been ‘digitized’. This may happen once all core processes are software-operated.

For Bomafa as an equipment customizer, operating in fully digitized mode is harder to conceptualize than for industrial manufacturers with a high degree of standardization.

On the horizon
So new, digital business models have not emerged yet at this early stage. Bomafa’s main focus is currently on internal processes. But one future development on the horizon is the use of Big Data where Bomafa sees opportunities for customer service and maintenance.

One of the new services could be the wireless transmission of equipment data to a control unit monitoring state and maintenance requirements – which could shorten idle times.

This would require major competencies in data analytics, which is on Bomafa’s agenda but remains a project of the future for now.

Bormafa sees itself at an early stage of transformation which will pick up momentum as management and staff develop awareness, clarity and competence.
“Digitalization is approached function by function and process by process. An important focus at this early stage is on staff involvement.“

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Digitalisation of logistics processes and the development of digital services for the planning and control of supply chains

The company

CLAAS was founded as a family business in 1913 and is today one of the world's lead-ing manufacturers of agricultural engineering equipment.

Overall, the CLAAS Group has experienced an extraordinary growth phase in the last two decades. Turnover has increased from approximately €500 million at the start of the 1990s to the current level of approximately €3.8 billion (2018). CLAAS employs over 11,000 employees around the world. The company earns more than 75 % of its revenues from international markets.

The CLAAS world is becoming more and more digital. New technologies and business models are emerging and developing rapidly. The fourth industrial revolution is de-livering a stream of intelligent systems, which are linked to each other digitally. “As a technology leader and innovation driver, CLAAS must be at the cutting-edge of change,” says Philip Vospeter, Head of Digital Transformation at CLAAS. Communi-cating openly and shaping the digital transformation together is the goal.

This case study deals with a specific digitalization project focused on the logistics processes and the development of digital services for planning and control of the Supply Chains at the CLAAS Group. The project is called SOFiA (Smart Objects und Smart Finance Approaches) and is described in detail in the following.

The aim of the SOFiA project

SOFiA was run as a research project under the full title of "Process innovation in planning and control of value creation networks through integration of Smart Objects and Smart Finance approaches" and funded by the Federal Ministry for Education and Research. It deals with the digitization of logistics processes and the development of digital services for the planning and control of supply chains. As opposed to other digitalization projects, SOFiA was more broadly based and focused on pre-development, i.e. it was not expected to produce full product rollout. It was de-signed, however, to provide orientation for future product development, which is why the bulk of experience to be gained was thought to be of practical value to the industry.

Cases of application were classic multimodal container transport by road, rail and sea, as well as the harvesting of silage corn as a logistically intensive agricultural work process. From a more technical perspective, i.e. under a Smart Objects angle, the focus was on how the participants of a logistics network can be digitized in such a way that work and decision processes are made more transparent and partially or completely automated. The object of the study was to create digital twins of all par-ticipants in a logistics network in order to describe both mobile resources (trucks, containers / harvesters and harvested crops) and static resources (department stores, transhipment points / fields, silo facilities) in such a way that a digital view becomes possible. Also relevant human actors and decision makers (truck driver, dispatcher / tractor driver, dispatcher) had to be provided with a digital interface (e.g. in the form of mobile terminals and apps) for interaction with the digital logistics system.

The project’s aim was to reduce the complexity of decision-making in the planning of logistics processes by means of a decentralized system architecture and to increase flexibility and adaptivity in the implementation of these processes. A decentralized approach makes sense especially in agriculture, where it is not possible to ensure transparency in an industrial sense. Agricultural machines usually operate under spa-tial distribution conditions and often have little connectivity due to poorly devel-oped mobile communications infrastructure in rural areas.

In the agricultural application case used by CLAAS, the primary objective was there-fore to create a system architecture that supports farmers and contractors by digitiz-ing the silage corn harvest.

Organizational and digital paths to reaching the objective

The research project SOFiA was carried out by CLAAS E-Systems (CES). CLAAS E-Systems is a subsidiary of the CLAAS Group and deals with R&D of software and electronics across all CLAAS products. This includes the development and operation of digital services and assistance systems, as envisaged in this research project. The project was supervised and processed by the Advanced Engineering department, which deals with pre-development tasks within CLAAS E-Systems.

In organisational terms, the research project was thus located outside of direct prod-uct development and production (and DevOps), which provided room for academic research and relatively free system development. Of course, goals and requirements of potential future CES products were discussed between Product Management and the SOFiA project team at the beginning of the project in order to integrate them into the development process. The technical conditions of the series products were also analysed and partly included as "guard rails" of the research project, but partly deliberately ignored in order not to be too limited by technical conditions of the status quo.

In addition to the coordination with R&D the fact that the project team adopted an agile approach and worked a lot on iterative prototype development was a decisive factor in the development of the project contents. Thus, it was possible to first pick out small system components from the large spectrum the target vision covered, to implement them and to then evaluate and further develop them. Since the project team was very small (mostly 3 employees + 1-2 students / interns), it did not use me-thodically ‘clean’ agile development (e.g. SCRUM). Likewise, the regular creation and testing of prototypes was more of a by-product of the agricultural work cycles than the result of rapid prototyping in textbook terms.

Since the time frames in which agricultural harvesting is carried out are limited and the effort involved in carrying out field trials is very high, it was clear from the outset that the project team could accompany a maximum of 3 harvesting projects in the 3.5 years of the project’s duration and use them for data acquisition and system tests. In year 1, for example, they recorded the data stock with a minimal system for data collection with which agricultural processes could then be simulated and reproduced in order to develop the other system components on this basis. In years 2/3, further system components were successively added until the final target system was imple-mented in year 3. The short harvest periods were both a blessing and a curse. On the one hand, the team were required to carry out very extensive laboratory tests to ensure that they were testing a fully functional system, which often revealed weak points or missing functions at a very early stage and promoted rapid iteration and improvement; on the other hand, weather-related schedule changes/disruptions af-fecting the scheduled practical tests often resulted in compromises as certain devel-opment steps had to be postponed due to schedules becoming too tight.

In terms of content, the orientation towards the cross-industry standard process for data mining (CRISP DM) proved to be helpful during development. Although data min-ing was not the main focus of the SOFiA project, the 6 phases of the model had a ma-jor influence on the development of the digital service system.

After the requirements voiced by CLAAS customers had led to a solid business under-standing through coordination with product management and also the SOFiA support group (cf below), it was initially important to define the data basis for digitizing logis-tical agricultural processes. The first task was to determine which data would provide information on the status and progress of a silo corn harvest. Various telemetry data from agricultural machinery and geodata describing the agricultural environment were linked in order to define a model for analysing harvest logistics and digitising the work process (data understanding and modelling). In the context of SOFiA, it was necessary to initially clarify where which data were created or stored and how they were to be distributed and modelled. This inventory was very important because the team had to deal with a distributed system consisting of various machines, mobile devices and several server systems.

When modelling the use case, the team made sure they distinguished very precisely between the qualitative and quantitative aspects of the sub-processes of the silage corn harvest. At very first the qualitative steps of the work process were mapped us-ing BPMN notation and then the processes of the service system were defined around the work process. This measure proved to be effective, as many details of the pro-cesses to be digitized were known right from the initial stage of system design.

The fact that the joint development of the BPMN diagrams also established a clear common vocabulary of the various process modules and processes was also an ad-vantage.

Based on this preliminary work more related to service processes, the technical sys-tem architecture was then designed and implemented. As already described, the team were committed to an iterative development approach taken throughout the harvest cycle. The idea of a Minimum Viable Product was always helpful in order to consider whether the developers should deal more intensively with a system compo-nent or not.

Which existing processes, procedures, configurations, etc. have been changed, made superfluous, further developed, etc.?

Reliable statements are not yet possible. It is foreseeable that the digital service sys-tem which has been developed will facilitate certain steps in the planning, imple-mentation and documentation of agricultural logistics processes.

With regard to internal R&D processes, there have been no significant changes.

Which stakeholders were involved?

The primary stakeholders within the project were initially the project consortium it-self and CES’ internal partners, as described above. In addition, a "support group" was involved over the entire duration of the project. This group consisted of interested agricultural practitioners, i.e. contractors, farmers, biogas plant operators and repre-sentatives of the Federal Association of Contractors.

The tests of the system developed were run on customer machines and were also carried out in real operation. Here, too, very relevant feedback was collected from potential future users and integrated into the project in preparation of the next test phase. Developers collected feedback completely informally and often simply by listening, observing and taking notes.

What experience did the company /subsidiary have with the develop-ment and internal lobbying/placement of the topic and results?

The project results are seen as a contribution to a more agile control of work and business processes in CLAAS’ client companies. This contribution is to be integrated into the existing product landscape after the project has been completed. In doing so, various existing technical basics and organizational processes can be used. This will now be done.

Lessons learned and recommendations

The SOFiA project can definitely be seen as a success story because of its approach and its implementation. Of course, CLAAS is an experienced company and does have the resources to implement this kind of broadly-based research project. However, there is some experience that every company, whatever its size, that is willing to digitize its processes can learn from. Some general lessons learned from this project are:
  • Define the problem (pick one process at a time) and make it into a project
  • Define the objectives to be reached and the kind of data that has to be generated
  • Classify the data and model them to make the results clear and measurable
  • Create a team that can deal with the project
  • Don’t always work “by the book”
  • Leave time for unexpected issues during the project
  • Define the process and make it understandable for all potential users
  • Employ iterative methodologies: try -> fail -> try again until you succeed
  • Take feedback from potential users during the project (not after)
  • Find a “support group” which can offer expert advice
“The project’s aim was to reduce the complexity of decision-making in the planning of logistics processes by means of a decentralized system architecture and to increase flexibility and adaptivity in the implementation of these processes.“

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Case studies from the Czech Republic

Digitalisation of companies with a third-party solutions

Company background

SAP is the market leader in enterprise application software, helping companies of all sizes and industries innovate through Digital Transformation and simplification. Originally known for leadership in enterprise response planning (ERP) software, SAP has evolved to become a market leader in end-to-end enterprise application software, database, analytics, intelligent technologies, and experience management.

A top cloud company with 200 million users worldwide, SAP helps businesses of all sizes and in all industries to operate profitably, adapt continuously, and achieve their purpose - from the back office to the boardroom, warehouse to storefront, on premise to cloud, desktop to mobile device. SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. Our machine learning, Internet of Things (IoT), and advanced analytics technologies help turn customers’ businesses into intelligent enterprises. Our end-to-end suite of applications and services enables our customers to operate profitably, adapt continuously, and make a difference. With a global network of customers, partners, employees, and thought leaders, SAP helps the world run better and improves people’s lives.

Need for digital transformation

In today’s highly-interconnected world where smart devices have found their way into every nook and corner of our lives and with the world moving towards driverless cars and highly immersive VR experiences, we believe every company needs a digital transformation and SAP is not an exception. As people, business, and “things” increasingly interconnect in the digital economy, existing business models are being radically disrupted. Digital transformation changes the way a company creates value, interacts with customers and business partners, and competes.

This journey towards reimagining business processes, to stay relevant and thrive in these rapidly changing times of course undertook also SAP. So far, companies around the world have focused on business transformation by automating their business processes and increasing operational efficiencies. Digital transformation, on the other hand, is about leveraging technology to fundamentally change the way companies interact with their customers, partners, suppliers and employees.

Digital transformation process

As mentioned, our company has also undergone and is still undergoing the process of digital transformation. However, we will slightly widen the answer for this question, as digital transformation is a major topic not only for SAP itself but also for other businesses. SAP has been instrumental in transforming hundreds of businesses in the last 45 years. Now, powered by new SAP solutions, we are connecting businesses with their customers, supplier networks, workforce and assets in real-time. And with a whole range of digitally enabled products and services in cloud, mobility, big data, IoT and machine learning areas, SAP is set to help companies in their digital transformation journeys.

As for the implementation, achieving digital transformation involves redefining these three pillars of any business - customer experience, business model and value creation model. Customer experience defines how a user of a product interacts with and derives value from it. Today, this definition must encompass providing a well-integrated, omni-channel experience, seamless upgrades, predictive maintenance and multi-channel, round-the-clock support for the product.

Benefits/losses of digital transformation proces

The results of digital transformation are visible in many areas of our company. As SAP Services globally provides business services in HR, finance and marketing to relevant SAP subsidiaries, it is an ideal source of innovation in these areas. SAP solutions combine expertise with next-generation technologies and help digitally transform administrative processes in our enterprise services center. In SAP Services we introduced automation into CV matching, interview planning, and training and query processing from internal employees. The aim of these activities is to eliminate repetitive manual activities. For example, the pairing of CVs compares descriptions of open job positions from the HR system with CVs of candidates. This means that HR associates will not have to go through every CV one by one because everything is done by smart algorithms. Alternatively, our training planner recommends to employees the training courses that they should complete based on their profiles and skills. The planner integrates information from multiple systems, creates a training plan for relevant courses and certifications and also takes into account assessment of the courses by co-workers. The result is that HR associate does not have to create such a plan for every and each employee manually. This example of digital transformation gives all SAP employees globally the opportunity to effectively develop their careers skills according to their individual needs. For the recruitment area, a virtual assistant is being prepared to arrange meetings with candidates. The scheduling of interviews, especially in the presence of more than one person, is not trivial, although it is a purely manual recurring activity with no particular added value. The Virtual Assistant has access to communication with the candidate and automates the scheduling of interviews via shared calendars. A new innovation in HR is the automation of the classification of queries from internal employees. In the past, HR staff had to read the whole question, understand it and send it to the appropriate department based on the workflow, which accepted the request and started to deal with it. The SAP Leonardo platform, based on the capability of text recognition, recommends the appropriate department and also includes the percentage of probability that its decision is correct. In addition, the HR departments also have a set of model answers referring e.g. to an internal company rules or local legislation. What is more, recently introduced chatbots, answer employees' queries in real time. This means minimal waiting time and at the same time minimal HR administration. While people do administrative work at different speeds and different quality, virtual assistants work faster with consistent quality.

Digital transformation is visible also in other areas, for example in finance. We are using possibilities of automation and machine learning for pairing of incoming payments with issued invoices and open items, getting recommendations for accounts receivables/payables, in dunning process or to identify and rank items to propose contracts.

Thanks to our solutions and digital transformation, our management is able to run business different than before – on any device, with embedded analytics for simulation, prediction and insight to action and of course also for automated processing and decision support. Our Executive Board is working with real-time data and is able to provide the Supervisory Board with regular, prompt, and comprehensive reports about all essential issues of business, corporate strategy, and potential risks.

Digital business model

Thanks to process automation, SAP HR, Finance or Sales personnel has more time for activities where they can better realize their strengths and focus on areas with higher added value. Workforce fluctuations, cost pressures and increasing workload cannot be overlooked. These are all areas where robotic automation is increasingly important. In addition, it unifies processes in all aspects together with flexible adjustments to changing conditions via using elements of artificial intelligence & machine learning.

Our main goal, however, is to help other companies with their digital transformation. Over the past few years, SAP led hundreds or maybe thousands of transformation projects in all lines of businesses across all industries. During this time period, a great number of new business models were born. In general, a business model is how a company defines its value proposition and monetizes its offerings using essentials building blocks from the business model canvas. The era of digitalization has transformed the way traditionally businesses operate. Today, the largest retailer has no inventory, the largest taxi company has no vehicles and the largest accommodation provider owns no hotels. While such digital disrupters have thrived, companies such as Blockbuster or Kodak that could not adapt to the digital progress became obsolete. The rules of the game have changed and hence the traditional business models must be reimagined. Value creation is the way a company creates or rather co-creates long-term, sustainable value for itself, its employees, customers, shareholders and even society in general (think amazon product reviews, OpenAI and openSAP/openHPI of course!). Competition, strategic partnerships, co-innovation, diversification and transparency are the key ingredients of a successful value creation model. We would like to gently take this opportunity and share some of the insights from our customers referring to their digital transformation journey.

Hilti: Making Innovations Available Globally – Fast

Hilti Group, renowned providers of technology for the professional construction industry chose SAP solutions for its digital transformation. As Dr. Johannes Reichert, head of DRIVE, Hilti’s digitization project, remarked, the company already opted for SAP Business Suite back in 2001. Today, the entire Hilti Group runs SAP, which plays its part in generating annual sales of around 5 billion Swiss francs. Around 60 new products require a rapid global rollout every year, and they need a suitable integrated IT infrastructure. Reichert is particularly enthusiastic about the speed at which proofs of concept can be created based on SAP solutions: “We have the management on board and the customers are delighted.” It was possible to introduce innovations that were very simple but very useful for customers at a reasonable price. It’s often a problem to know precisely which Hilti tools are being used on a construction site, because dirt or scratches can make serial numbers illegible. Thanks to an NFC chip in the tool and an app based on SAP software, customers can now scan the tool with their smartphone to identify it uniquely and access all the tool-specific data. Reichert says an interdisciplinary team comprising members from Hilti and SAP has proven to be highly constructive. They meet every week and regularly hold design thinking workshops to discuss the latest developments.

What’s more, the mounds of paperwork required for inventory control on construction sites are becoming a thing of the past. A Hilti app that draws on IoT technology makes it possible to record all the equipment required on a particular site and then ascertain whether tools are missing and where any missing tools are located. In addition, thanks to the cloud platform, information about tools that are switched off can be updated as soon as they are switched on again.

An integrated approach on the journey to digitization enables companies to reap the biggest business benefits. In particular, it’s important to rethink existing IT landscapes and to always follow a “cloud first” principle. Collaboration among SAP, the company’s IT departments, and the business units can bring people with a wide range of skills together and thus foster a sustainably innovative environment.

GEA: From Products to Modular Service Offerings

GEA Group, one of the biggest system providers for the food industry and many other process industries, told a similar story. Anselm Schoenmakers, senior director and head of Service Product Management for Extended Life Services at GEA, reported how new service offerings had arisen for the company from predictive maintenance and condition monitoring for special equipment such as separators and decanters. “We can offer customers benchmarking to measure their equipment’s efficiency and productivity,” Schoenmakers said. He added that this would make modular service level agreements possible, depending on customers’ desired level of engagement. Customers will then be able to choose among various options: from the simple provision of machines with regular reporting to comprehensive customer care by GEA for entire facilities and processes. Schoenmakers also praised the new SAP user-friendly interface, saying, “Convenience is a factor that shouldn’t be underestimated.” Anselm Schoenmakers explains GEA Group’s digitization strategy. As an internationally operating company, GEA used dozens of different IT systems. However, the initiative quickly became a success, Schoenmakers explained. The technical side was not the only decisive element. A cultural transformation within the organization was crucial to realize all the benefits of digitization. In particular, networks for cooperation across company borders and customer-focused methodologies such as design thinking came into their own here. Going forward, GEA plans to produce more smart equipment and wants to reduce the necessity of local expertise through improved remote maintenance.
"Thanks to our solutions and digital transformation, our management is able to run business different than before – on any device, with embedded analytics for simulation, prediction and insight to action and of course also for automated processing and decision support."

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Digitalisation of internal processes and collaborative sharing in a SME

Company background

NAVISYS is a small company established in 1997 by three consultants and developers. The main goal was delivering complex implementations of the famous NAVISION information system supplied by a Danish company Navision Software. In 1998 NAVISION did not include manufacturing modules and the founders used their previous experience and developed own module of production planning and control. In 2000 NAVISYS became the first certified manufacturing partner of Navision Software Company and implemented the first manufacturing modules in the Czech Republic. A breaking moment in the history of NAVISION came in 2001 when Microsoft announced its interest in buying 100% share in Navision Software and in 2002 successfully realized its intention. New possibilities opened up in the area of advancing new knowledge and technologies. NAVISYS, who until that time acted solely as an ERP supplier, broaden its services into other areas such as SQL Server, BizTalk, SharePoint, or .NET platform development. The company became soon a renowned supplier of not only general-purpose information systems but also expert solutions for specific industries. In 2004 NAVISYS entered the transport logistics market with BIZ4Logistics solution, in 2005 launched a solution for logistics in warehousing and distribution (BIZ4Warehousing) and two years later (2007) an integrated building industry project management solution (BIZ4BuildIn).

NAVISYS team consists recently of more than thirty experts specializing solely in implementations of Microsoft Dynamics ERP systems in a number of industries with particular focus on manufacturing and logistics.

Need for digital transformation

In NAVISYS it is believed that every company needs constant progress and in nowadays circumstances, digital transformation seems to be crucial for further efficient company growth. Competition in this industrial area getting stronger and stronger and in NAVISYS were realised that it is necessary to optimize processes. Although NAVISYS delivers IT solutions, on the first place remain customers with their needs. To have the relevant data in the right time is vital for efficient meeting of clients’ requirements. In previous time employees spent a lot of time searching information about company customers in paper files. Furthermore, new employees were neglected by more experienced colleagues because they were too busy with paper work. Non-existing training plan, organization chart and tedious learning were not just reason for delivery delays and dissatisfaction of client, in some cases lead to quitting of the job in the company. The NAVISYS realised the risk of losing customers and as well qualified staff.

Digital transformation process

NAVISYS company implemented Microsoft SharePoint - platform that facilitates collaboration among employees, manages documents, searches relevant information and make workflow more efficient. The head of the company (CEO) designed this platform. He discussed desired requirements with TOP management (CFO, CIO, CSO), and in the second step the solution was tested internally before final implementation. In-house training for employees were designed and they were included on the process of implementation of SharePoint.

The main obstacles they faced were time and reluctance of employees. At the beginning, employees were sceptical and unwilling to undergo the change. Fortunately they overcame the initial difficulties and discomfort caused by more workload, and after completing the implementation their attitude changed because they noticed that digitalization saves their time, it is easy to understand and intuitive.

Benefits/losses of digital transformation proces

NAVISYS sells Microsoft SharePoint and as benefit is perceived every notice for improvement suggested by employees. It makes the platform more reliable and allows providing high quality service for customers.

As main benefit after its implementation is seen document management. Employees can share all data electronically, thereby creating an important information base for the entire team. Everybody can easily find out who the author of the document is, who edited it, approved it and when it was issued.

Another benefit, which was mentioned, is intranet portal working as a social network. It enables to follow the employee work in real time and as well afterwards, to summarize tasks and control at what stage of development their project is. In the case of need for necessary support by dealing with working tasks, employees can immediately connect external experts via SharePoint and ask for cooperation. This system prevents misuse of personal data as well, set rights for all users and allows login access for data sharing.

All documents that need to be registered are scanned and inserted into the system. Whoever can open the document without the need of physical contact. For example, invoice is scanned, provided with a code and notice about the responsible person who then approves it. After approval, it is forwarded to accounting department. Searching in SharePoint using specific filters speed up finding of required scanned document and connected details.

Other important function of MS SharePoint is project portal. It organizes projects and tasks. It allows sharing of all emails and team member time schedules as well as documents related to the project.

Digitalization led to big changes in company processes, many of them are automatized nowadays. NAVISYS assigned new competencies to many employees and set up in-house training system for new colleagues.
"Employees can share all data electronically, thereby creating an important information base for the entire team. Everybody can easily find out who the author of the document is, who edited it, approved it and when it was issued."

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Digitalisation of customer service and administration processes in a bank

Československá obchodní banka, a. s., /ČSOB/ is a universal bank in the Czech Republic. ČSOB was established by the State in 1964 as a bank for providing services in the field of foreign trade financing and convertible currency operations in the then Czechoslovak market. It was privatised in 1999 – KBC Bank, which is a 100% subsidiary of an integrated bank-insurance group KBC Group, became the majority shareholder (since 2007 the sole shareholder). In June 2000, ČSOB took over the bank Investiční a poštovní banka (IPB). Until the end of 2007, ČSOB was active in the Czech and Slovak markets; the Slovak branch of ČSOB was transformed into an independent legal entity on 1 January 2008. ČSOB provides its services to all groups of clients, i.e. retail (individuals) as well as SME, corporate and institutional clients. In retail banking in the Czech Republic, ČSOB is operating under main recognized brands – ČSOB (branches) and Poštovní spořitelna (Postal Savings Bank; financial centers and outlets of the Czech Post network). The product portfolio of the ČSOB group (the Business Unit Czech Republic) includes standard banking services - financing housing needs (mortgages and building savings loans), insurance products, pension funds, collective investment products and asset management, specialized services (leasing and factoring), services related to trading equities on financial markets.

More and more clients want to communicate electronically with the bank. New technologies offer opportunities for new forms of financial services and streamline existing processes.

Digitisation has been a continuous process in the bank for several years and has been accelerating in recent years. The number of transactions entered through electronic channels is increasing, client´s documentations are no longer printed, but signed electronically using biometric features. Branches are becoming paperless and communication within the ČSOB Group is already predominantly electronic.

In the framework of digitization it was necessary to deal with:
  • preparation of new electronic channels for communication with clients and their security,
  • a growing number of clients communicating with the bank exclusively electronically and the related efficient use of the branch network,
  • the need for other staff competencies,
  • commoditisation of some services.
One of significant result of digital transformation process in the bank is seen in optimization of branch network. Further changes are connected with job positions in the bank e.g. administrative staff decreased and on the other hand experts´ and consultancy positions offer is growing. Important consequence of digitization is increasing need of security requirements. Security is perceived as one of the main values that corporate electronic banking must fulfil. ČSOB does its best for its clients – ensures proper identification, offers highly secure tools for login and signatures and transactions are checked for fraud and abuse.

ČSOB received a prize in the CFI.co 2018 AWARDS PROGRAMME for the best online bank in the Czech Republic in 2018. The finance magazine appreciated the bank’s excellent digital banking and sophisticated care for its clients.

“CFI particularly appreciates how simple international payments are; they can be managed online, saving clients time they would otherwise have to spend at a physical branch. The jury was also impressed by the ČSOB Smartbanking app, which brings the simplicity of online transactions to mobile devices and enables clients to manage their everyday transactions, from credit cards to purchasing insurance. Another award-winning application is the ČSOB Smart Key, which provides a simple addition to online banking thanks to the use of a one-time code or fingerprint access instead of a numeric text message code. According to CFI, ČSOB is trying to meet and exceed client expectations by providing constant security and easy access to online payment applications”. (Patrik Madle, ČSOB Press Officer, 2018)

Digital technology changes clients' behaviour and expectations. Through digital channels, we offer 24/7 service to our clients regardless of their current location. Contact with clients is faster, and also the subsequent processes in the bank are faster.
"One of significant result of digital transformation process in the bank is seen in optimization of branch network. Further changes are connected with job positions in the bank e.g. administrative staff decreased and on the other hand experts´ and consultancy positions offer is growing."

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References

Arnese (2013). Alitalia Digital Strategy - presentation. B.Com. Event. Turin, 18th April. Presentation available here: [https://www.slideshare.net/nicolaarnese1/alitalia-digital-strategy-23609409]

BBVA (2015). Reinventing the Company in the Digital Age. BBVA 2015. Available here: [https://www.bbvaopenmind.com/wp-content/uploads/2015/02/BBVA-OpenMind-book-Reinventing-the-Company-in-the-Digital-Age-business-innovation1.pdf]

Buvat, J. and Khadikar, A. (2016). BBVA: Rebooting Banking for a Digital Economy. Digital Transofrmation Institute, Capgemini Consulting, March.

Bonnesen, B., Lovén, L., (2014). Swedbank – our digitalization journey. Swedbank, December Available here: [https://www.swedbank.com/idc/groups/public/@i/@sbg/@gs/@ir/documents/financial/cid_1721752.pdf]

Bonnesen, B., Karlsson, L. and Karamouzis, G. (2018a). Digitalisation of our lending process and digital payment solutions. Swedbank, September. Available here: [https://online.swedbank.se/ConditionsEarchive/download?bankid=1111&id=WEBDOC-PPE1341699]

Bonnesen, B., Karamouzis, G., Trägårdh. C., Elsnitz, C. and Lovén, L. (2018b). Channel transformation. Swedbank, December. Available here: [https://online.swedbank.se/ConditionsEarchive/download?bankid=1111&id=WEBDOC-PRODE24420022]

Catlin, T., Scanlan, J. and Willmott P. (2015). Raising your Digital Quotient. McKinsey Quarterly. June 2015.

De Falck, E., (2018). The Digital Transformation of the Banking Industry and how Lawyers work is affected. Swedbank, October. Available here: [https://www.vqab.se/wp-content/uploads/2018/10/Eva-de-Falck-The-digital-transformation-of-the-banking-industry.pdf]

Friedrich, R., Le Merle M., Gröne, F. and  Koster A. (2011). Measuring industry digitization: Leaders and laggards in the digital economy. Strategy& (formerly Booz & Company).

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IBM (2017). Alitalia. IBM case study, February. Available here: [https://www.ibm.com/case-studies/alitalia]

Kuan, Kevin K.Y.; Chau, Patrick Y.K. (2001): A perception-based model for EDI adoption in small businesses using a technology–organization–environment framework. In Information & Management 38 (8), pp. 507–521. DOI: 10.1016/S0378-7206(01)00073-8.

Lufthansa Consulting (2018). Digital Transformation in the airline industry, March.  Available here: [https://www.lhconsulting.com/company/news/article/digital-transformation-in-the-airline-industry/]

Manyika, J., Pinkus, G. and Ramaswamy S. (2016). The Most Digital Companies Are Leaving All the Rest Behind. Harvard Business Review, January.

PROS (2018). Video presentation from Dr. Stefan Trilling, Director, Implementation Management for Group Business, Lufthansa. Outperform 2018. Available here: [https://resources.pros.com/outperform-2018-presentations/digital-transformation-of-group-business-the-lufthansa-story]

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Survey list used in Benefits and obstacles section

Nr.

Author

Title

Number Participants

Origin of Participants

Year

Additional Information

Link

1

CCL and Corporate Leaders

Digital Transformation Readiness Survey Summary

100 VPs and directors in HR, L&D, Leadership Development and Talent Management

 

11/2017 – 01/2018

 

Click here

2

Corporate Leaders

Digital Transformation Survey: Creating Products and Services in a Digital World

128 executives in product development, engineering, production, corporate management, IT and marketing

Europe, North America, Middle East and Asia

2018

Sponsored by ptc

Click here

3

IDC Info Brief

The Next Steps in Digital Transformation

3904 SME decision makers, companies with 10 – 99 employees

Worldwide

2016

Sponsored by SAP

Click here

4

JDA & KPMG

Digital Supply Chain in Retail & Manufacturing: A State of the Industry Benchmark

 

 

 

Conducted by Incisiv

Click here

5

Ping Identity

The State of Digital Transformation Report

200 IT decision makers

US (companies >500 employees); UK, France and Germany (companies >200 employees) 

26/08/2016 – 08/09/2016

Online conducted by Regina Corso Consulting

Click here

6

Riverbed Technology

Riverbed Retail Digital Transformation Survey

Retail IT decision makers

US, Australia, Germany

01/2018

 

Click here

7

PWC

Global Digital IQ Survey: 10th anniversary edition

2216 participants evenly divided between IT and business leaders

From 53 countries

09/2016 – 11/2016

Conducted by Oxford Economics

Click here

8

Fujitsu Future Insights

Real Digital: Success Factors for Digital Transformation

1535 CxOs and decision makers from large and mid-sized companies

From 16 countries

2018

 

Click here

9

OECD Directorate for Science, Technology

and Innovation

Key Issues for Digital Transformation in the G20

 

 

2017

Document based text

Click here

10

EVRY Survey

Digital Transformation Challenges and Opportunities

200 interviews of managers in administration, accounting/finance, marketing, IT and IT specialists

Norway and Sweden (evenly distributed)

12/2015

All participants from companies with > 100 employees with 59% > 1000 employees

Click here

11

Siemens

Digitalisation Survey Ireland

135 companies of all sizes and across all industrial sectors

Ireland

2017

Participants were technological and strategy-oriented decision makers

Click here

About

This project shared by the three partner universities Bielefeld University of Applied Sciences/D, Brno University of Technology/CZ and University of Tartu/EST aims to provide the framework for a future joint master's degree on Digital Transformation of Corporate Business.

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