Published 08. Sep. 2016

Good is the Enemy of Great in Digitalization

IT Management


Digitalization is now a determining operational factor for industries and not anymore just an enabling tool, according to Stefan Hofmann, Deputy Country Manager at Interoute Austria/Germany. Nowadays, entirely new business segments and even whole new companies seem to spring up from out of nowhere, creating a name for themselves and taking industry leadership, in just three to ten years.

Imagine the Possibilities

“Everyone is talking about omnichannel retailing, Industry 4.0, and the Internet of things, hailing each as the ‘next big thing,’” replies Hofmann when asked for his thoughts on trends. “These buzzwords do not merely refer to new technologies, but effective combination of existing technologies and optimizing this fusion for various business segments.” The greatest challenge that CIOs face then is no longer thinking in terms of technology and IT, but in understanding customer requirements and using the knowledge to control sales figures and turnover.

Picking out the retail sector as an example, Hofman shared a four-part illustration on just what can be done with digitalization:

  1. Learn More About Customer Behavior – Using technologies that involve Wi-Fi, RFID, digital signage, and big data, shop operators are provided with valuable information that greatly supports their production, logistics and HR planning.
  2. Predict Developments – With data, shop operators can keep track of developments such as which shops can expect more or fewer customers under certain weather conditions and then adjust their HR planning accordingly.
  3. Take Stock of Products Real Time – Shop operators can also integrate their RFID or beacon data into their ERP system and then use the knowledge obtained to manage logistics and production – for instance, choose to warehouse more or fewer goods to correspond to their customers’ purchasing behavior.
  4. Proactive Offering – Because of real time knowledge of their warehouse stock, shop operators can actually immediately find out if the customer is interested in purchasing a product, and then stretch the service a bit further by telling them they can buy now and receive it by post the following day.

Fix What’s Not Broken

The future looks bright and promising with digitalization, but not all buys into the idea even after so many sectors have already been disrupted. Hofman believes that it’s due to many companies still doing very well with their tried-and-true business models to appreciate the dangers of failing to digitalize, “These companies often resist digitalization because they are still doing reasonably well with a non-digital approach.” Another reason for resisting digitalization is the fear of the efforts required for the radical shift being greater than the reality of becoming obsolete. What organizations must realize is that, ultimately, their massive effort will be more than worth their while, and that there’s really nothing to fear in the presence of proven best practices, and available digitalization consultants and partners.

Interoute Austria/Germany will be attending our 600Minutes Executive IT event in Austria on the 10th of May 2017 as a solution provider. For more on our upcoming events, visit the Event Calendar »