Nearly all companies seem to be convinced of the opportunities of digital transformation, only very few are more concerned about the risks. This is shown by a large number of studies on the subject of “digital transformation.” For example, 97 percent of companies surveyed from the pharmaceutical industry (according to Bitkom) and 91 percent of industrial production companies (according to McKinsey) see digitalization “more as an opportunity.” A study by Deloitte even shows that 88 percent of the decision-makers surveyed recognize a connection between digitalization and corporate success.

Digital maturity check

The studies also draw attention to the deficits of digital transformation, especially with regard to digital maturity. Many companies are only now beginning to look specifically at the topic of Industry 4.0, although an overwhelming majority is convinced of the opportunities that the digital transformation can offer. “The benefits of new technologies, such as 3D printing, Big Data, and the Internet of Things, are too often seen as a risk and not an opportunity to increase competitiveness,” says McKinsey consultant Detlef Kayser. Roland Berger’s study confirms this view: many companies seem to be setting the wrong priorities when it comes to their efforts towards digital transformation. They focus on increasing efficiency and reducing costs instead of developing new products and customer interfaces.

Opportunities…

Is that not too short-sighted? In addition to new business models and new products, digital transformation also enables differentiation from the competition, better time-to-market, more resource efficiency, better integration of product development and production, optimized use of customer data, and the list goes on. The possibilities vary from industry to industry. Companies should deal with the questions of making their products “smarter” and what benefits this should bring. A mechanical engineer who equips his products with sensors (IoT) can remotely monitor operations and improve the product (e.g. make it more failsafe). Using technologies from the “Precision farming” area means that farming operations can cultivate fields more efficiently: combine harvesters systematically check the soil condition, transmit and evaluate the data, and determine the optimum time for sowing.

… and barriers

The companies surveyed for the McKinsey study see employees’ knowledge, data security, and the lack of consistent data standards as their biggest obstacle to Industry 4.0. In a recent study Hays and PAC looked at the most common hurdles when it comes to implementing digital strategies. The result: first and foremost, companies are blocked by the silo and competitive thinking of their individual specialist areas, which prevents networked action. The daily business also takes up too much time. The low acceptance of change measures among employees also hinders transformation. Hays executive Christoph Niewerth said the following: “Many companies are discussing digital change, but in reality the old world still dominates with its conventional perspectives, methods, and processes.”

Go for it!

So the objective is clear. Prof. Arnold Weissman, Professor of Strategy at Zurich International Business School, among others things, believes that German companies are well positioned, but “are no longer in the lead”. Companies that want to remain fit for the future must catch up. “What is revolutionary today will become standard tomorrow: the extensive digitalization and automation of the entire value chain, from the product idea and implementation to the supply chain. Champions such as Trumpf, Kärcher, and Schäfer are already fully committed to this approach. But the majority are still watching in astonishment,” says Weissmann. German Chancellor Angela Merkel already urged companies in 2013 to help shape the digital transformation: “Germany traditionally has special strengths in traditional industries. Combining these strengths with the opportunities of IT developments means translating familiar standards into the 21st century, into the age of digitalization. This means new growth paths.” (Opening speech at the IAA opening 2013).