no business is too small to go digital

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AI, smart machines, digitalisation – not a day goes by without an abundance of articles or news items about these latest tech developments. If the threats about robots stealing jobs were not enough, now the fear about data and its farming may have caused further alarm in citizens and businesses all over Europe. How can companies keep up with the rapid shifts in technology?

Small vs. large companies

Small and medium sized companies are still very hesitant when it comes to jumping on the digitalisation bandwagon. A recent study by WSI found, that while 80% of large companies have planned a digital transformation process in the next two years, not even 30% of small companies have done so, or feel ready to tackle this issue. In particular, they find it difficult to adapt the organisation of work to the realities of 21st century – even though digitalisation is affecting all sectors. Paradoxically, it is especially small and medium sized companies that are most at risk by the disruptive effects of technologies. Small businesses that are able to embrace one or other form of digitalisation become instantly more competitive. Hairdressers with a website, online booking system, and even a Google maps small business account collecting customer reviews are much easier to find and they reduce significantly the “effort” customers and potential clients must put in to be served by them.

The main difference between small and large companies is the capacity to absorb these new technologies, overcome skills shortages in applying them, and also to maintain “business as usual” while the company, or one of its business units is transforming. Large companies can select units or departments to test certain tools, and once it has been successful, and also adapted to the actual needs and requirements of the company, they can roll it out across the entire organisation. Smaller businesses don’t have this luxury, because the productivity loss from experimentation, mistakes, restarts may be a too heavy burden for many to bare.

Small businesses that are able to embrace one or other form of digitalisation become instantly more competitive. Click To Tweet

No one-size fits all solution

The tricky thing about digital is: there is no one-size fits all solution. AI and smart machines can do only so much, whatever they are instructed to do, all the tasks that are repetitive, which don’t require a lot of decision making or choosing between alternatives. Whatever part of the process a company chooses to tackle first, be it design, production, customer service, cost reduction, HR, marketing, communication – management will be confronted by a number of offers on the market, and they have to select one, and then adapt it to suit their company.

The human factor

One of the most important aspects however of the digitalisation journey is the human factor. How will employees work alongside and in concert with the new tools, be it AI, bots, automation, platforms. Most of the people that responded to surveys in the past years about digitalisation are open to innovation and welcome the many positive aspects these new tools and processes will bring, new channels of communication, new ways and opportunities to acquire new skills and tap into the knowledge of colleagues, as well as its potential for work-life balance, by enabling more flexible working patterns. However, studies also have found, that the increasing digitalisation of a number of areas has also brought with it an increase in work pressures and a decrease in employee engagement and work satisfaction. Even though many countries have introduced legislation to protect workers from work-related pressures and psycho-social risks, employees report that there is very little done in practice at the companies.

Situation in Germany

Especially in the German, and more broadly speaking in the EU context, for any organisation to be ready to embrace work 4.0 or digital processes, the working conditions must be given top priority. As tasks are becoming more complex and interaction between the non-digital and the digital work increases, the motivation and autonomy, the personal responsibility of employees are paramount. And if you also consider the demographic challenges, the shrinking supply of skilled workers, then a healthy workforce becomes twice as important.

The German Federal Ministry for Labour has recognised these limitations for small and medium sized companies, and has introduced a new programme to support them with the digitalisation journey. Once SME owners, management and even employees are informed about the different tools tech may offer to them, new fields of business opportunities can arise. Think of a small accountancy company, that in addition to bookkeeping may launch a new online training competence to inform and train other small businesses about changes to legislation affecting their finances and accountancy.

To be ready to embrace work 4.0 or digital processes, the working conditions must be given top priority. Click To Tweet

The Arbeiten 4.0. Initiative

The positive attitude and gentle push by the Ministry and the Arbeiten 4.0 Initiative is much needed and welcome. Following their lengthy consultation process, during which they effectively crowdsourced the Future of Work for Germany, they are continuing with a practical application of what they have learnt, and included in the White paper. Each year, Zukunft Personal has kept the visitors up-dated about the latest milestones in this process, inviting key-note speakers from the government, and also a very large information stand, together with smaller panel discussions and workshops have kept the interested stakeholders up-dated about the latest findings and recommendations.

Future of work

During the 2017 Zukunft Personal I had the opportunity to interview Dr. Max Neufeind, Policy Advisor at German Federal Ministry of Labour and Social Affairs, who has been an integral member of the team of the entire Arbeiten 4.0 process, about his take on the future of work. One very interesting remark by Max was, that Germany has to look at its own context for the change of the labour market, and not chase the next Google or tech unicorn at all costs. This process is about understanding what people working in Germany feel as important, what are the strengths and specificities of the German industry and build on that.

 

The latest initiative of the Ministry are the so-called experimentation rooms, which bring in companies into a “lab”-like system, where they can learn about the digitalisation and in structured workshops explore in a safe environment, which aspects of the business are ready to be digitalised, what tools could be adopted and used, and perhaps which areas need more upskilling to be ready.
What is a very important aspect of this process, that it involves both management and employees, with the deliberate objective to build trust and cooperation. Unless there is trust and all actors are on the same page, any digitalisation initiative may be compromised from the start.

Blueprint for the future?

As Max confirms in the interview, there is no blueprint for the future. And this may be a very new situation or experience for small businesses, who have gotten used to operating under a relatively fixed and regulated blueprint in their respective sectors. Bakeries, car mechanics, accountants, lawyers, cleaning companies didn’t have to up-date processes for many years in such a dramatic way, as now with the penetration of new technologies in our everyday lives. But there are early successes everywhere. Just as an example, predictive technologies can help small businesses plan much better for the future demand. If there is a period for high demand, they can plan their resources, and if there comes a slower period, employees can rest, participate in learning and development activities, build up capabilities.

No business is too small to go digital!

The message is clear: no business is too small to go digital. And there is now support and expert advice available on how to take the leap up to the next level. To figure out where to start on this journey, the Zukunft Personal Europe 2018 is a really great place to start:
– Because you will have access to the major policy players of the Arbeiten 4.0 initiative, who can share lots of insight into how others have done it, and what public support is available
– Because you will be able to walk through an incredible number of service providers and offers during the 3 days, take your time to speak with the companies and figure out which suits your needs best – so huge cost savings there already
– Because you cannot help but be inspired by the speakers in German and English – who will share their own journey with you, and not letting you leave without resolving to take the first step
– Because the very notion of “permanent beta” will reassure you, that the others haven’t totally figured this out yet either.

The @ZPEurope is a great place to start the #digitalisation journey! Click To Tweet
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