Approaching Digitalization With A Cool Head
Blog Digital Transformation

Approaching Digitalization With A Cool Head

Digitalization, digital transformation, Industry 4.0, IoT – these days no-one in the world of business can afford to ignore these terms. We are currently experiencing a structural change, affecting all areas and changing procedures, working methods and customer behaviour. Anyone not managing to seize these opportunities in good time will lose out.

It’s not a case of companies not wanting to tackle the new challenges. According to a study undertaken by KfW in 2017, 42 percent of the companies surveyed have firm plans to implement digitalization projects in the next two years. It’s just that lots of companies have simply no idea which approach is the right one to pave their way into the digital age.

The fact that there are a multitude of applications on the market, which are intended to simplify the shift to digital but the benefits of which remain unclear, is also not very helpful. The only thing that is clear is the fact that – surprise, surprise – there are tangible, economic interests behind these offers.

There are no clever formulas for the right way to approach digital transformation. Uber, Airbnb etc. are great examples of the new possibilities, but cannot be transferred like for like to other companies. It is also not always a good idea to break new ground as a first follower of a new technology and thereby expose oneself to high levels of risk. At the most, the example of digitalization pioneers is often the initiative for some companies to take the first tentative steps.

Small, straightforward changes are often enough to tap into new business potential through digitalization. For example, a manufacturer of switch boxes can use the information from switch modules to offer its customers new services to improve their energy efficiency.

The term digitalization means optimisation of processes using new technological opportunities. The aim is to link independent systems with one another such that processes can run automatically without any human interaction.

Where to start?

One pragmatic approach with direct results is the automatic processing of e-mail- and paper-based processes. Business information can be accessed with ease and no modal fragmentation. The following processes can be fully automated and therefore made considerably more efficient. This applies to all document-dependent procedures in the company, for purchasing and procurement just as much as for sales processes.

The example of the procurement process shows the optimisation effects which can be gained in this way: software systems can handle a large number of routine tasks. The system automatically recognises all relevant document contents. Accompanying internal control and approval processes are thereby processed electronically. Manual intervention is only needed if there are variances.

Even requisitions are entered digitally at the work centre. All approval and review steps can run completely electronically afterwards – still before the ordering process. This applies to the checking and approval of the material requisition as well as the review of account questions. All important facts are clarified and the order can be placed automatically.

The subsequent procedures are also simplified. As all key information relating to the procurement transaction is available, incoming order confirmations and delivery notes can also be processed at speed. There is no need for anything to be typed in by hand or checked visually: the important contents are recognised automatically by the software. The system compares the contents with the existing purchase order. The lion’s share of goods receipts can thereby be sped up considerably.

In invoice processing, the amount of manual work is vastly reduced as all the important questions have already been clarified in advance. Again here, the comparison with the existing purchase order is undertaken automatically. Multi-level release workflows are rendered obsolete. An administrator only has to intervene if something needs clarifying. If the system finds no variances, the invoice can be posted directly in the background if desired.

The same applies to electronic invoices or using a mail system for example. These are forwarded directly and also posted without any intermediate stages.

Automatically processing documents in this way and in real time directly in the SAP system is the first step towards digital transformation.

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