In this article:

1. Digitalization: Too many businesses miss the trend
2. Why digitization for businesses is important
3. The advantages of business digitization
4. Advantages for your cients
5. This is how the implementation succeeds
6. Are there any disadvantages and risks of business digitization?
7. Conclusion
   

Digitalization: Too many businesses miss the trend

The digital transformation is advancing, but not all companies are successfully following suit. In a way, that’s understandable, because the switch to digital processes doesn’t happen overnight. Nonetheless, small and medium-sized companies in particular are missing out on opportunities if they sleep through current trends and fail to realign their strategies. 

Before we take a closer look at the benefits of digitization, we examine the current situation and what difficulties exist in the digital restructuring of corporate processes. Finally, we also look at possible disadvantages to give a better overall view of the topic.

First, an important message: Don’t think too complicatedly when it comes to digitization. Every company goes through the journey of expanding digital processes, be it in internal communications or in advertising. It’s not just about the big steps, whereby an analog company suddenly transforms into a tech giant. The following therefore does not resemble a manual in the direction of “How do I use less paper in the company”, but rather relates to the digitization of internal processes (e.g. marketing and recruitment).

Mobility and social media are two main advantages of the digital progress | © NordWood Themes

The advantages of digitization in companies are well known to many. Thanks to technological progress, there are financial savings opportunities, companies generate more sustainably and offer their customers flexible solutions. Difficulties often arise during implementation – that’s why we have prepared the following tips to pave the way for the digitization of your company and to better prepare you for implementation measures.

Why digitization for businesses is important

Even though digitization is making progress in companies, the processes and competences still have room for improvement. A statistic published on February 14, 2022 shows that 35 percent of German companies consider themselves to be digitalization pioneers and, in turn, 44 percent state that they have increased their sales through digital measures.*

Progress is therefore discernible, but there is still a lot of potential to be exploited. Other countries, especially the USA, are much more advanced and are already using digital technologies that are not yet used in the DACH region or are used to a lesser extent.

AI applications are a good example of this, but they are now also becoming more popular in Germany. One example is generative AI applications such as ChatGPT.

Even before the development of AI, German companies recognized the benefits of digitization in the world of work. For example, statistics from May 2022 show that German companies with more than 50 employees have invested approximately €234 billion in service projects for digitization. The willingness to digitize is therefore there, but why does it seem to be progressing so slowly?

The real challenge lies in the lack of a doer mentality. Entrepreneurship already faces various hurdles (e.g., financial or bureaucratic) and processes for digitization do not improve the situation: the first step requires external consultants or the expansion of internal personnel structures. Then comes strategy development, which requires countless consultations within the team. The next step is implementation, which involves a high financial investment.
The thought of this process alone prevents many companies from taking the necessary steps and implementing digital measures.

However, this is no reason to stop or even rethink the change, because digital measures are gradually replacing analog processes. A good example of this is marketing: fewer and fewer companies are relying on print media, but instead on websites, search engine optimization and social media. Online processes are in fact easier to measure and thus enable more efficient use of available resources. However, only a few companies have the ability to implement various online marketing measures at the same time. But there are hardly any disadvantages to this, because even if a company focuses exclusively on search engine optimization, it is already reaping the benefits, even though other measures (e.g., social media) are not yet taking effect.

Therefore, our tip: Digitize your business processes step by step and don’t restructure everything overnight. This minimizes the effort and ensures a proportionate cost structure.

7 underestimated advantages of business digitization

Which advantages do digitized businesses have besides more flexibility, expandation of mobility and a more efficient use of resources? Many businesses ask questions like this and we anticipate it right away: Setting long term goals is the most important factor.

The advantages of digitalization in businesses are the following:

• Digitalization encourages competition and innovative ways of competing with others
• Better service for customers is provided
• Obtaining new employees easier
• Expanding communication structures
• Creating new jobs
• Easy measurement of processes
• Potential of optimizing processes
• Saving money

Digitalization encourages competition and innovative ways of competing with others

Growing competition requires constant rethinking of one’s own offering and customer communication. Right from the start, companies ask themselves to what extent their products or services set them apart from competitors and position them in relation to their target group. And the digital transformation offers additional opportunities to expand internal processes in order to constantly improve the offering and strengthen the company’s own brand.

Here, competition enables some opportunities; after all, competitors are also recognizing the benefits of digitization and optimizing their processes based on the adapting desires of the target group. But what initially appears to be a disadvantage actually promotes your company, because in a constantly growing market with a lot of competition, you are in a position to stay on the ball and offer something new. And because of the competition, there is no standstill, which constantly creates room for more innovation on the market.

Better service for customers is provided

The centralization of work processes ensures that companies can provide their customers with better service. A good example of this is the area of digital signage – thanks to the centralized, cloud-based solution approach, maintenance work is carried out holistically and not every customer is looked after individually, at least in the case of cloud hosting. This saves personnel and financial resources, and the centralized service guarantees long-term functionality. The latter also has a positive effect on customer satisfaction.

Obtaining new employees easier

Posting a vacancy, waiting for applications, and going through a long selection process – that’s what recruitment looked like for a long time, and it’s still common practice at many companies in 2022. In the course of digitalization, however, this changed and companies are finding it easier to obtain personnel, especially through social media channels such as LinkedIn or Xing.
Especially smaller start-ups and founding teams take advantage of this, because freelancer portals enable uncomplicated as well as flexible placement of orders without permanent personnel commitment. Due to the remote work (home office) of the freelancers, no additional office space is required and this saves costs.

Home Office: Remote work is one of the biggest advantages of digitalization | © Austin Poon

Creating new jobs

With digitization, many companies are pursuing the goal of expanding analog work steps as best they can through the use of modern technologies in order to preserve existing jobs. Since then, however, the digital transformation has also seen the emergence of many new occupational fields, especially in the areas of IT and digital marketing. Existing jobs are gaining additional relevance (e.g., web design) and more analog fields are undergoing a digital transformation (e.g., designers for print who now design digital media)

Easy measurement of processes

This advantage is particularly evident in digital marketing. Key figures such as reach and click-through rate can be easily accessed and provide precise insights into the success of the measures taken. Tools such as Google Analytics or the insights on social media channels such as Facebook or Instagram are particularly helpful here. But it is not only in marketing that companies benefit from better measurability, because every digital process is based on evaluable key figures.
In our blog article “What is monitoring?” we explain the advantages of process monitoring in companies and which software is available to you for this purpose.

Potential of optimizing processes

Every process goes through a test phase and it is initially uncertain whether something works or not. But it is precisely the measurability of digital processes that offers optimization potential, because it is immediately apparent from the figures whether an established measure promises the desired success.

Here again, digital advertising is a suitable example. Facebook ads or Google Ads not only promise a lot of reach and more leads, the evaluation of the data also provides information about which approaches or which type of ads perform best. This in turn enables efficient and targeted use of available resources, resulting in exponential growth.

Saving money

Let’s stay with the example of digital advertising: Optimizing digital advertising, be it in terms of content or strategy, saves resources in the long run and for the future you know which advertising measures to consider and which not. This permanent optimization process provides immense financial savings over the years and also gives you the opportunity to learn more about the interests as well as needs of your target group – a win-in situation, because you save money and at the same time you target your marketing more specifically to potential customers, which increases sales in your company.

Note: Our examples mainly considered marketing, but other business areas also benefit from the advantages mentioned so far. Whether it’s human resources, logistics, marketing or production, the benefits of digitization for companies exist across divisions and industries.

Summary of advantages

The greatest advantage comes from the long-term optimization of internal company processes. Initially, digitization in the company requires financial investments and targeted planning, but this process is worthwhile because you gain better insights into the result structure and recognize potential that is denied you with analog methods.

Advantages for your clients

• Shorter delivery times
• Faster communication
• Better information exchange (e.g. through a FAQ section)
• Lower product costs
• Targeted interaction (e.g. through gamification)
• Improved user experience

This is how the implementation succeeds

The good news is that establishing digital work processes does not require any serious structural changes in the company. Instead, you analyze existing processes and define measures for digitization. We recommend selecting individual areas and developing a strategy for each subarea.
Example: As a team, you decide to optimize your company’s website for search engines and, at the same time, you commission the development of an app. Here, it is less important which step you focus on first, but rather which strategy you define for the individual steps, i.e. search engine optimization and app development.

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Are there any disadvantages and risks of business digitization?

Digital transformation promises a wide range of benefits, but some are still skeptical. Many criticize, for example, that jobs are at risk as a result of digitization. Others, in turn, see the financial outlay as a major hurdle.

It is a misconception to claim that digitized work processes will lead to job losses, because some professions downright require retraining to learn new skills. A good example is the profession of architect – ten to 20 years ago, houses were created on paper, now they are created with digital programs. And thanks to continuing education, even architects trained in the 1990s know how to use modern software.

The objection that digitization requires high investments is also not entirely correct. It is true that in marketing, for example, many test phases are required to assess the success of an advertising measure, and content marketing in particular is known to involve a high investment of time as well as money. However, it should not go unmentioned that such investments are worthwhile in most cases and the average return on investment in content marketing is four percent*. This means that the supposed disadvantage turns into an advantage in the long term.

Conclusion: Advantages of business digitization outdo the disadvantages

Digital business processes will be indispensable in 2023. The advantages of digitization range from increased flexibility to expansion of competition. Many see the digital transformation as a threat to jobs, but it is precisely the basic innovative idea that will create further opportunities in the future to combine analog workforce with modern technology. Business areas such as marketing are already showing the added value that the implementation of digital strategies offers companies, not to mention the opportunities to use resources more efficiently and evaluate results more accurately.

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In this article:

1. Definition: What is data management?
2. Data management tasks
3. Three steps to successfully execute a data management strategy
4. These are the challenges
5. Advantages of data management
6. Advice for your data management strategy
7. Conclusion

The most important in a summary

• Data management provides many advantages such as safety, cost savings and efficiency
• Innovative solutions don’t cause any problems regarding GDPR
• Many businesses complain about the missing transparency in data management

Definition: What is data management?

Data management belongs to the digital competencies and combines all elements of information transfer within a company. The goal is to establish methods and processes to save, to minimize and to archive data.

Many businesses have already established data management to automate working processes and to relieve staff. Furthermore, they pursue the goal to minimize mistakes and to ensure more transparency. Last is especially important because only when businesses consider current data they have the possibility to optimize processes sustainably.

In this article we will talk further about data management and its tasks. We will show you all pros and cons as well as common challenges. Other than that we will answer questions regarding data security and strategy.

Tasks of data management

Basically, the main task of data management is to save business related data transparently. Through that, stakeholders get insights into data and structure to make solution oriented decisions. Furthermore, businesses minimize their error rates and use their budget efficiently.

Data management is not limited to essential operation areas. Many might think of financial stuff and bookkeeping when they hear the word data management, but evaluating marketing KPIs and factors to improve quality management is also considered in the process.

Data management is a holistic process which takes over the following tasks:

• Easy access to business data
• More transparency
• Establish automated and efficient working processes
• Ensure safety and prevent data loss
• Comply with retention obligation
• Eliminate old or not needed data

Three steps to successfully execute a data management strategy

To successfully execute a data management strategy, businesses need to consider questions regarding data sets, data structure and data saving. The following three steps help you with that.

Know and understand your data sets

The first step of a successful data management strategy requires knowledge about data itself. Without understanding data sets of your business you can’t create a goal oriented strategy. A systematic analysis considers three types of data, namely personal-related, “High-value”-business data and public data.

Personal-related data includes all data sets regarding your target group and other natural persons. This includes name, address and email. For these data sets the requirements of GDPR are to consider.

“High-value”-business data is sensitive business data. This includes bookkeeping data, tax documents and financial data. The encryption of this data is highly important.

Public data is accessible for everyone and concerns the area of marketing. Through transparency regarding marketing KPIs (social follows, website visitors etc.) businesses have easy access to relevant data but they have to consider to avoid intellectual property damages.

Structure data properly

Data-lake and data-warehouse belong to the most known methods of data saving. The data lake is a large store of raw data whose use has not been determined. In contrast, the data warehouse is a central collection of business data that is tied to a purpose.

Data lakes are easily accessible and do not require specialized knowledge to modify new data. However, data can only be accessed with specialized tools or by experts (e.g., data scientists). Data access via a warehouse is much less complicated, but data modification requires more effort.

Many businesses use both methods to have more advantages. Data warehouse requires less expertise for data retrieval and is more secure. On the other hand, data lake has advantages in terms of flexibility and data storage.

Storage environment

The best-known model of data storage is the cloud. This offers a variety of benefits to businesses, including secure data storage, greater flexibility and resilience. As an alternative, many companies are turning to server-based computing in the form of an internal storage environment. Hard to beat in terms of security, but not accessible to third parties without a cloud service.

To form better interfaces, there are so-called “data fabrics” on the market as storage environments. This concept combines the strengths of cloud services with those of internal storage environments and equips them with additional functions to ensure greater security as well as flexibility.

These are the challenges

Data management has many advantages (more about this in a moment!) but businesses face many challenges during the process of implementation. Some of them are:

• Costs
• Data volume
• Requirements of stakeholders

Costs

Data administration causes costs. Although data management ensures cost savings, it’s still recommended to carry out a cost-benefit-analysis to invest available budget efficiently. Therefore, it’s less about if a data management strategy is financially worth it, but rather to which extent the budget is invested.

Data volume

With too much data volume, transparency might get lost. The usage of data management software reduces this risk but the danger of loss still exists. Without a goal oriented organization and planning, there are also no advantages regarding transparency and efficiency because your business might evaluate the wrong data.

Requirements of stakeholders

Data management pursues the goal to establish solution oriented as well as efficient working- and business processes. Hereby the requirements of stakeholders are to consider to evaluate collected data purposefully.

The bigger the company, the more complex are probably the requirements of stakeholders. That possibly aggravates goal oriented data management because wishes and expectations of single persons might go too far apart through which no clear goals can be determined based on the evaluated data.

This is how businesses master these challenges

Clarify requirements, knowing goals, planning resources purposefully and choosing high quality software. These four steps build the base for goal oriented data management. Especially stakeholder requirements and data saving are no hurdles with a detailed plan. In terms of costs, there are advantages with a data management strategy anyway, but insufficient calculation of personnel deployment may waste financial resources.

→ Simply explained: Planning is everything!

This is how you ensure a GDPR compliant realization

In May 2018, the European Union adopted the General Data Protection Regulation (GDPR), creating a legal framework for data processing. This legal framework is based on principles such as fair processing, lawfulness, adequacy of data processing, integrity, purpose limitation and accuracy.

Companies have a responsibility to ensure these principles in their data management. But in practice, this is not so easy. Even one incorrect setting in the website cookie banner may already lead to unlawful data processing. Good compliance prevents such difficulties.

Declarations of consent form the basis for DSGVO-compliant data processing. In addition, companies must comply with their administrative obligations and delete data upon request. A regularly changing legal situation complicates this process, so staff and involved stakeholders must be trained regularly.

The advantages of data management

Regardless of the mentioned hurdles and challenges, a goal oriented data management has many advantages for businesses. Some of them are:

• Transparency
• Problem identification
• Eliminating disruptive factors
• Targeted working processes
• Process automation
• Better user experience
• Recognizing customer needs

Transparency

The accumulation of big amounts of data are barely overlooked by businesses which is why they often oversee important sets of data. Through a targeted administration, businesses ensure more transparency and can evaluate as well as organize data purposefully.

Problem identification

Transparent processes result in better problem identification. Organizations have a lot of interactions going on, whether between software applications or protocols – and good data management helps identify the problems created by processes.

Eliminating disruptive factors

Problem identification ensures an uncomplicated solving process of disruptive factors. Besides that, it’s easier for businesses to execute prevention methods to avoid difficulties in the future.

Targeted working processes

The main goal of data administration is to optimize working processes. Through transparent data evaluations, businesses recognize their potential and use it. No matter if it’s for marketing, human resources, bookkeeping or quality management. Businesses recognize, for instance, which marketing methods generate the most leads or which benefits motivate employees the most and then can improve existing processes based on that.

Process automation

Through performance and process monitoring, business can stop processes and methods which require too many resources. That, on the other hand, ensures possibilities and process automation.

Example: If companies try to implement too many marketing measures, the test phase takes longer and requires many resources. With more transparency regarding the target-oriented marketing measures, it is possible, for example, to optimize and automate lead generation. This is because companies can see what their marketing team is investing time in and thus shift the focus to the processes that lead to the goals.

Cost savings

The elimination of non-targeted processes results in financial advantages. Businesses are less focused on such tasks and approaches which don’t promise any success. Furthermore, they reduce the effort for testing phases.

Better user experience

The advantages of data management are not only internal to the company. Data administration reveals important information about customer wishes and which advertising works best. It’s also easier for businesses to react to trends. Hereby, there are advantages in the area of user experience and target group approach.

Recognizing customer needs

Feedback and ratings are among the most important sources for businesses to get to know their target group better and to identify customer needs. Structured data management helps to evaluate all collected sets of data better and to recognize customer wishes accordingly.

Advice for your data management strategy

Develop a holistic and waterproof strategy

A good and goal oriented strategy should be your number one priority. Without knowing the requirements and goals of stakeholders, your business will collect too much irrelevant data. Also, deal in advance with questions regarding storage locations, file formats, monitoring of KPIs and which data protection regulations have to be observed.

A goal oriented strategy considered the following aspects:

• Clarify roles and responsibilities in the team
• Consider legal aspects and compliance
• Determine measures and methods
• Set up criteria for external business partners

Find the right data management software

Only use software which suits your business goals. The offer on the market is growing and there are suppliers for different goals. Clear the following questions to find the right data management software:

• What are our business goals?
• What is our budget?
• Which requirements must a software fulfill?
• Does the software fulfill legal requirements?

Consider changes

In the area of data management a lot of things have happened in the past years. There are different software providers on the market, the goals of stakeholders change regularly and customer needs are in an everlasting change. Data management doesn’t only mean to establish purposeful structures once. Instead, targeted processes require regular optimization to ensure long-term results. 

10 best practices for data management

• Weighing costs and benefits
• Know your business goals
• Use databases which fulfill the requirements of your business
• Centralize communication of involved parties
• Teach your staff
• Inform stakeholders and work transparently
• Use data discovery to track processes and ensure good compliance
• Act purposefully but thoughtfully when optimizing processes
• Don’t only think of business processes but also about the effect on your customers
• Don’t get lost in numbers but orient yourself on the wishes and desires of your target audience

Conclusion: Data are digital gold

Targeted data management ensures transparency, process optimization and cost savings. First, you need to clarify questions regarding software suppliers and responsibilities. Data management is a business process, a good strategy is therefore the fundament for a successful implementation.

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In this article:

1. Hardware and software: Differences and connections
2. What is software?
3. The different types of software
4. What is hardware?
5. What is the difference between hardware and software?
6. The difference between hardware and software through the example of digital signage solutions
7. What are the challenges of hardware and software?
8. Conclusion

Hardware and software: Differences and connections

The advance of digital techniques establishes new terms. To be honest, “software” and “hardware” aren’t really new and have already been established in the language use about two decades ago but these terms come with several questions to answer. In the following article we will answer questions regarding hardware, software and their differences as well as future challenges.

What is software?

Most people associate the term “software” with computers and this isn’t particularly wrong. But actually, software is a general term for all executable programs and their associated data. In many cases, software describes a script which on the other hand describes the functions and usage of a software controlled device.

The different types of software

The question regarding the definition also comes with the question if there are different types of software. Short answer: Yes, there is, many actually. Following, we will take a closer look at the different types of software.

Open Source

Open source is a free to use software. The source of this type of software is freely accessible and can easily be changed or adjusted. Known examples of open source software is LibreOffice.

Embedded software

Embedded software is a software which is recorded into hardware. The actual danger here is that once software is embedded it is not possible to change it afterwards. Therefore, the software must be flawless. Good example for this type of software are central heating systems – the software is installed within the hardware and functions are predefined. Updates or individual changes aren’t possible afterwards.

Cloud based solutions

The biggest advantage of cloud based software solutions is the independence. Only a few years ago updates and maintenance needed to be done by the business the software was provided for but that has changed thanks to cloud based solutions. Central administration gives businesses the opportunity to be provided with regular updates without having to do them by themselves.

A good example for cloud based software solutions is digital signage – most digital screens are provided with cloud based software. Solutions such as FRAMR make working processes more flexible, individual and centralized. Centralized business processes save a lot of money in the long term and businesses can be sure that processes run reliably in the background and that performance will improve.

Packaged software

It’s probably the most known type of software. Packaged software provides the same solutions for every customer and for every business with only a few changes possible. Good examples are Microsoft Word and Microsoft excel. The actual challenge of these programs is to be compatible with many different systems. Everyone knows the regularly required updates of windows which mostly serve the purpose to fix errors or similar problems – the actual goal is to improve performance but also to make adjustments regarding the compatibility of different operating systems.

The separation of the different types of software can be specified further – often the different types of software are categorized into standardized software, industry software and individual software. Standardized software is often used by many different businesses (bookkeeping software for example), industry software mostly provides solutions for niche businesses (commercial sector for example) and individual software is specifically developed for one or only a few companies.

What is hardware?

Hardware describes the physical components of a computer system and serves as a “tool” for functionality of software. One distinguishes between internal and external hardware. Internal hardware are the invisible components (the inside of a computer for example), external hardware on the other hand are all devices which are outside of a computer.

Examples for internal hardware:

• Processor
• Power Adapter
• Random access memory
• Hard disk
• Drives
• Graphic card

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