Written by We have interviewed Dominik Lindner, a partner at ADISON. His company specialises in the development of digital business models.
Marie, a sales agent in the year 2025, orders a car for a meeting across town via her smartphone. She feels adventurous today and decides to switch the car into active rather than selfdriving mode. The chosen route is shared with Marie’s insurance platform. Immediately she receives a calculated premi um for an insurance based on the likelihood of accidents as well as her insurance rating considering her vital signs, age, tiredness, and emotional stress level.
This scenario for a digitised insurance solution may seem far-fetched, but in fact all the required technologies already exist. Technologies such as these allow us to streamline our work processes and be more efficient in the way we work.
Digitisation has already taken over many aspects of public and private life. Let’s take the email as a perfect example: While hand-written letters still dominated day-to-day work in the late 1990s, in 2021 approximately 4 billion email users worldwide send some 300 billion emails and receive an average of 200 emails every day.1 Email sym- bolises digitisation at its best: It is cheap, fast, convenient and environmentally friendly.
Computerisation and networks are constantly expanding to areas of production, transportation, science, administration, and the home.
This creates great opportunities. Processes become infinitely reproducible, more accurate, safer and, in general cost-effective. This gives us more time for the things we cannot digitise, such as creativity or human relationship management. Besides that, it accelerates innovation.
The digitisation project
In light of the above-described opportunities, most C-level executives are faced with a big task – the digitisation strategy for business transformation. It is a top priority, yet efforts are stalling.
We have interviewed Dominik Lindner, a partner at ADISON. His company specialises in the development of digital business models.
Eberlain: Which business areas of an industrial company are most affected by digitisation?
Lindner: We experience a tremendous impact on each and every business field of our clients. Either direct or indirect. It is therefore difficult to name particular areas. Since it is such a broad term, we tend to use the term “digital trans- formation” rather than digitisation, which is quite often related to a technical approach only.
Eberlain: Where are the stumbling blocks when it comes to digitisation projects?
Lindner: First, we consider it imperative to define clear objectives for a digital transformation. Whether it is about managing customer experience, developing new business models or simply optimising business processes – a clearly defined goal guarantees a useful outcome. At the same time, we recommend that all those areas that should not necessarily be digitised be defined as well. This helps to eliminate unnecessary technological gimmicks.
Second, we focus on the needs of our clients’ customers. At the beginning of a project, we want to understand the expectations, desires, concerns and fears of those customers. That is where we tap in to create added value and a guideline for the next steps. This applies to both external and internal clients.
Third, we remind our clients that there is no such thing as a Swiss army knife that solves all issues with only one fully integrated software solution. Rather than wasting time and money on such an impossible all-in-one solution, we take small steps, test prototypes, get feedback from potential customers and focus on a fast implementation of smaller applications that have the potential to create real customer value. For example: It is easy to implement an automatic short text message about a delivery status at the right time. Dozens of interviews have shown that this is what customers really appreciate.
Eberlain: How important is digital transformation for industrial companies and how might this change by 2030?
Lindner: In our opinion, measures for the digital transformation are among the top priorities of every company in the manufacturing industry. At the same time, we are quite sure that this development will be further accelerated. The digital momentum seems to be unstoppable. By 2030 we will surely see more online sales and digital services, more inter- connected supply chains with advanced interfaces, more automation and prefabrication even in industries that today rely on manpower. The pandemic caused a dramatic shift towards remote working. This may stay, at least in part. And yes, there will be applications and business models we
cannot imagine today. But what we know from our many interviews with customers is that personal services will have their comeback. The digital solution is not always the best and might threaten established customer relationships.
Eberlain: What do you consider digital transformation risks in project implementation?
Lindner: When we investigate the expectations of our clients’ customers we concentrate on their needs and emotions. That means we are interested in desires and concerns in general, and partly at a subconscious level. Personal tastes, opinions or technical preferences are left aside methodically since they are short-term and related to the present situation. In addition, we play the devil`s advocate by also considering direct person-to-person services or an analogue solution.
Therefore, we must have good reasons for going digital. The IT experts in our project team help us reduce potential technical risks. They continue to keep an eye on the IT landscape and the IT infrastructure of our clients.
Consider the risks
Like any paradigm shift, intensified networking and digitisation naturally also harbours risks that companies should take into account when planning and implementing their projects:
- Cost risks: As outlined in the interview with Dominik Lindner, one of the biggest risks is to approach the digital transformation instinctively without a plan or concept and to want to seize opportunities without considering investments and challenges.
- Cyber risks: More online services and digital interconnection means also more exposure to cyber-attacks. Smart devices, computers and networked household appliances are increasingly becoming targets for cyber criminals. There is probably no bigger threat to manufacturing companies than a breakdown in production. Investing in cyber protection systems is a top priority.
- Data risks: Extensive digital net- works of machines, customers, suppliers, production and distribution processes generate huge data volumes. This data is needed for intelligent software that is based on algorithms. At the same time, this data carries a higher risk for
companies. Potentially, every device in a digital network can cause a data leak which hackers can use to attack the company or which competitors can use for industrial espionage. - Working atmosphere: Scientists have shown that the lack of human contact due to an excessive use of social media has caused people to become mentally ill or depressed. Digital transformation also affects personnel. It requires transparency and a heightened awareness of taking responsibility for the workforce.
Conclusion
The Corona crisis as a boost for digitisation has shown us how quickly hybrid and remote working have become possible. As these possibilities have turned into permanent options for employees, company managers are taking their employees’ changing expectations into account as they develop new remote working models. In the war for talents, this opens up great opportunities. However, various studies show that working remotely and alone not only massively increases the risk of malicious ransomware cyber-attacks, it also impacts negatively on the team spirit.
Digital transformation is a development process that can no longer be stopped. Companies and managers must therefore face the challenges that come with this development. Those who take advantage of the opportunities offered by digitisation, while being aware of the possible dangers, can successfully lead their company into the future.
The article is written by Dominik Lindner, Stephan Eberlain and Maksym Shylov.
Dominik Lindner
Partner ADISON OG
Anita Molitor
Operation Executive
T +43 664 962 40 08
Maksym Shylov
Group Practice Leader
Food & Agriculture
T +48 22 39 33 211
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