Costs down, growth up: how you can benefit from digitisation

American computer scientist Alan Curtis Kay once said, ‘the best way to predict the future is to invent it.’ As technology is subject to rapid change even in planning, engineering and construction, you should get involved in the digitisation of your ‘made in Germany’ products. Read on to find out how you can use digital innovations to generate value and decrease your production and administration costs.

28 billion euros lost between Kiel and Garmisch

According to a study on behalf of Sage, one of Britain’s leading providers of cloud-based bookkeeping and payroll accounting systems, there is plenty of scope for digitisation in small and medium-sized enterprises (SMEs) in Germany and ten other countries, especially in production and administration. Apparently, the SMEs in the eleven countries* studied spend on average almost 120 working days on administrative tasks each year. And around five percent of all working days are required for bookkeeping. At 3.7 percent, Germany is slightly under the study’s average. But this still amounts to an extrapolated productivity loss of 28 billion euros per year.

No go without investment!

One of the reasons for this improvable level of digitisation in SMEs here: many medium-sized companies don’t invest in software solutions for their administration because they feel the initial costs seem too high (28 percent). And another 22 percent worries that maintaining these digital platforms will take up too much time. For you as a businessperson, this knowledge is worth its weight in gold for two reasons. Firstly, it shows that flexible attitudes and behaviour, paired with an openness to new things, will give you a head-start compared to your lagging competitors. And secondly, you guessed it, you can’t achieve anything without investment. So, make a few changes and harvest the fruits of your investment later on: cost savings in administration and additional profit in production.

Digitisation and SMEs: best friends forever

The ad hoc equipping of your company’s internal IT infrastructure is not enough in order to identify and enhance cost potentials. You need a strategic digital approach that is carried across all areas of the company - from executive management to staff. All staff must internalise that digitisation has to become part of the company’s DNA. Hain GmbH from Offenbach, Hesse, shows that it’s not witchcraft. For a few years now, the company has been marketing digital office management solutions to their customers as well as printers and fax machines. It was Maurizio Pittello’s management team’s response to reductions in appliance prices. A strategically wise decision, as digital solutions now account for 50 percent of the company’s total turnover.

But digitisation can also pay off for companies with offline-based business models, such as developers, construction companies and engineers. The key term is building information modelling (BIM). This is the thorough digitisation of all construction data in a virtual building model. All relevant building data is digitally collected, combined and linked: from the diameter of the supports in the underground car park to the capacity of the fourth floor ceilings to the wattage of the basement lights. BIM creates a unified database in order to realise more efficient planning and implementation of comprehensive construction measures.

Very good, you’re digitising! What now?

The competition is set to increase further in the digital age. For you, this means you have a lot to do. You have to ban outdated paradigms and the ‘anything not from us is rubbish’ reaction, as well as disrupt any stubborn silo thinking. Often, you as the CEO make the decisive breakthrough at executive level. You always think of the new without questioning the tried and tested ways in which you make money now. But your staff also have to get involved. Digital training sessions and IT workshops aren’t just empty start-up phrases, rather necessary tools to keep up with the rapid speed of digitisation and use your potential.

*Market research firm Plum Consulting carried out the study on behalf of Sage in Germany, France, the UK, Ireland, Spain, South Africa, the USA, Canada, Brazil, Australia and Singapore in 2017 and surveyed more than 3,000 companies.