Who is this article written for?
You are a decision maker in a service company, such as construction or telecommunications, and have been entrusted with implementing a digitization project. And you want to implement your project in the best possible way. This post aims to give you a solid overview of what needs to be done at each stage and what information you need to provide in order to “smooth” through the implementation process.
I will specifically arrange my articles along the various stages of digitization. Practical examples always come from my consulting practice.
This article is also written for practitioners. I’ll mention the theoretical framework, but it always comes down to the correct application, which is why I’ve oriented myself towards the practical use of the framework. One more thing about the tone of the article: I don’t believe in soft-heartedness, but I also don’t believe in arrogant looking-down attitudes. The article is written directly and without embellishment. Nothing is glossed over and nothing is exaggerated. Anyone looking for a pragmatic approach to digital is in the right place!
start to go digital
And here we are already at the starting point of digitization. There are two things to consider here.
- You just need to start digitizing.
- You have to define digital for yourself .
About 1. You just start digitizing.
The beginnings of going digital were unspectacular. It requires one thing: your decision. And your decision is a serious one. Seriously, because of this decision, you consciously help decide something.
- Digitization is entering your company. You want to digitally transform your company. Go from a successful company using simulation tools to an innovative company using the latest tools to offer your customers different or additional products and services in the future. Here, digitization is the first step.
- Point 1 means you provide a space for digitization. Space means that in the future, you give every entrepreneurial idea a small, free space where you place a digital idea. Sound abstract? Maybe. Can you actually do this in practice? If you think, yes! Everywhere you hear or read the buzzword “digital thinking” in the media and professional literature; this is what it means.
- With space, you should provide more resources. I’m talking about money invested in software, hardware and people. I’ll cover how to calculate digital investment in my next blog post.
- People are your most important resource in digital. You can write this on your website or in your brochure. It’s just that now it’s up to you to see if you really mean it. People working on digitization projects need support, not only from superiors, but from all colleagues. For a new world is pouring upon these people. It has been a long time since most of my clients’ employees have experienced or dealt with so many new influences and impressions, information to process, or basic jobs.
- What no one tells you is this: you have to separate yourself from a whole bunch of people and things. After all, digitization separates the wheat from the chaff like a newer remedy. Old software modules, risks, dependencies, wrong master data, poor processes, but also employees who are unwilling to adapt to change. In the case of the latter, however, digitization was never the cause of the exit, but usually the effect. An explanation of this will also follow in an upcoming blog entry.
So far so good. The start is done. A decision has been made, your decision. Let’s move on to the second point.
You have to define digital for yourself
Here are two definitions of digitization that I could find.
“The digitization of a company can be inward-looking, for example, when business processes are digitized to reduce costs, increase efficiency and improve productivity. However, a greater challenge of digitization requires companies to develop products and/or services while Innovate to increase sales and gain long-term market share”. [Kofler, T., Das digitale Unternehmen – systematische Vorgehensweise zur zielgerichteten Digitalisierung, 2018, Springer-Verlag GmbH Germany].
“Digitalization[…] itself is simply the process of compressing analog media into bits and bytes (or other forms of 0s and 1s, such as smoke signals). This is simply the mapping of information into versions of 0s and 1s , which is accordingly called digitization.” [Talin, B., Digitalisation Vs. Digital Transformation – Difference And Definition , 2021].
And, does it help you implement digitization in your company?
I think so too. Therefore, these definitions are not wrong. But: digitization no longer requires explanation, but its implementation does.
This brings us to the question: “How can I digitize my company?
So the first job you need to do is figure out what you mean by digital. Some also talked about developing a digital strategy. Likewise, there are many different definitions in practice. However, the beginning of digital transformation begins with the digitization of business processes.
Why is this?
If a company is in the process of dealing with digital transformation, the starting position must be considered. In many cases that I know from practice, the last large-scale digitization was decades ago. now it’s right. Almost always around the millennium (some people will know it is the millennium or the change of the millennium, that is, around 2000), SAP was introduced as an ERP system. Since then, little has changed in terms of the use of software tools. The company grew rapidly, the numbers of employees and turnover multiplied, but the tools remained the same. Since then, complex Excel files or Access databases have become a feature of everyday work.
Therefore, digitization starts with business processes. There, you don’t just start with any process, but with the ones that are most important to value creation. This leads to the following effect.
- Build a platform within the company as a foundation for future growth
- Improve data quality in the medium term through cleansing and centralization (mostly garbage!)
- Process standardization can finally happen
- Communication with customers, suppliers and subcontractors can be significantly improved
- New data can now be collected
- Possibilities arise to offer new products and services
Digitization of order management for service companies
For service companies, this process is the order management process. Here, industry plays almost no role. An order goes through the same stages repeatedly.
- Creation of orders together with customer orders (fault clearing operations can be an exception, here technical and commercial orders are usually placed by frame agreement, so-called call frame agreement contingents can also occur after fault clearing). – Gather information from customer orders and “join” this information with existing master data, equipment and material data.
- Work Preparation – This is where all measures are taken so that work orders can be scheduled and executed.
- Scheduling – assigning work orders to so-called “field service” employees. These are people who work “out there” for the service company, performing work on the client’s site. In other words, someone who generates turnover for the company and actively creates and maintains value. These employees need certain information: about orders, about customers, about equipment and systems, about lines, networks, and so on. At the end of execution, there is always confirmation and completion of the order.
- Service Records – Services performed are collected in a report. Size and quality, price, piece count and straight meters come into play here. This information is mandatory and optional in the service catalog. This report, called a survey for example, is then sent to the customer together with a report requiring approval.
- Billing – A billing request contains the services posted by the customer.
- Fulfilling the order – this stage sounds rather unobtrusive and is not often done in practice. Here, all the information recorded during the order (such as images, documents, forms, approvals, etc.) must be kept in a legal and secure manner. After all, it’s not usually just the tax office that wants to be able to keep ten years of service records. In the event of a dispute, other authorities, such as the courts, must also be able to trace the work done and the care taken in the work. Construction companies are well aware of this because in the industry builders have a five-year construction warranty obligation.
- Archive – That’s it, the order is now ready to be archived. But how? Here, too, individual decisions on how to carry out digital archiving must be made for each type of document. And in such a way that it cannot be changed afterwards.
With this checklist, I’ve only slightly scratched the surface of the order management process. But enough to give you an idea of the complexity that awaits you if you want to go fully digital.
Individual definition criteria for digitization
So digitization of the most important value creation process is one way you can approach digitization. The definition depends largely on these factors.
- Initial situation and available resources (people, knowledge, budget, time, IT system structure, etc.)
- Monetary leverage or effect (ROI).
- Enterprise/Market Development Strategy
- For organizations, the intensity of change
- Product Lifecycle
- leadership culture
- Supplier Structure and Relationships
- data quality
- stakeholder structure
- Past attempts at digitization
This list may not be complete, please feel free to contact me and leave a comment on this article.
However, it already provides many easily verifiable pointers that you can incorporate directly into your considerations.
This will allow you to understand in a short time which possibilities you should pursue digitally and which ones make sense from the above criteria.
Once these considerations have been made, and the resulting results documented and analyzed, you can now concretely begin your first digitization project. Both the development of a digital strategy and the digitization of business processes are different in every company. Some things can certainly be done in parallel if a) there are sufficient resources and b) all initiatives are geared toward a common strategic goal. If you proceed this way, you are already (as of summer 2021) better than 80% of your competitors in your market.
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