Digitization: These are the most important trends for 2022
What is the role of concepts such as agility in the face of digital transformation? How is Software as a Service (SaaS) shaping the future of software? And are trends such as remote work and anywhere operations really promising? We have with the KUMAVISION CEO Kay von Wilcken as well as Ralf Riethmüller and Holger Schüler, both division heads Cloud and services at KUMAVISION, talked about the digital trends 2022.
In the past two years, Corona has been a strong catalyst for transformation and has had a significant impact on digital trends. Will that still be the case in 2022?
Ralf Riethmuller: Digital trends will definitely be shaped by Corona in 2022 as well. Most companies have now taken the first steps, for example in the area of mobile working - as well as it was possible under the circumstances at the time. But above all politicians and many smaller companies are only now really realizing how far they are behind on digital issues and that there is an urgent need for action.
Holger Schüler: In the meantime, the vast majority of companies have really understood that they can neither sit idly by the pandemic nor digitization, but have to deal with it constructively. For example, anyone who was previously convinced that home office was not possible has seen in the last two years that it somehow works. The task now is to make mobile working even safer with appropriate security solutions and more pleasant for employees with the right tools.
Kay von Wilcken: "Comfortable" is a good keyword. After the initial spark caused by Corona, all employees across the bank, from field staff to managers, felt a great deal of relief because their travel activities had been reduced to a minimum. And online meetings have now also become socially acceptable. This was an important door opener for the expansion of digital infrastructure in companies. E-learning and virtual meeting and event rooms are also in increasing demand.
Anywhere operations, i.e. working from anywhere, will also be one of the top trends in 2022?
Kay von Wilcken: Certainly. The topic of remote work with decentralized teams has now become established and will continue to accompany us in the future, especially since the demand from employees is constantly increasing. Incidentally, this also brings with it a very decisive advantage for employers: the radius for the search for new employees is much larger than it used to be, because – provided you have a good internet connection – thanks to modern IT solutions you can now work anywhere in the world. Of course, the European data protection regulation must be taken into account.
Ralf Riethmuller: However, the IT infrastructure must also support and promote this. And not only technically, but also with regard to soft factors such as cooperation and communication. Microsoft recognized this trend early on and, with teams, offered the necessary prerequisites for efficient collaboration on one platform. This was also shown by the enormous demand last year when we offered our customers Microsoft Teams for free use for six months.
Kay von Wilcken: And this trend will continue to develop beyond the typical office workplace. If we think a few years into the future, location-independent work will also become an issue for front office workers, for example when operating machines. There are already pioneers in a wide variety of industries who are promoting the topic of remote maintenance. The troubleshooting on a machine or system is no longer carried out by the service technician on site, but is carried out by means of remote diagnosis - also through the use of augmented or virtual reality. Something that is already standard in software today, but is still in its infancy in production.
The corona pandemic has shown how quickly markets can change and how quickly old habits can be questioned. Against this background, is agility becoming increasingly important for companies?
Kay von Wilcken: Yes of course. But the topic of agility cannot be viewed in isolation. Because it is inextricably linked to digitization. The digital transformation brings with it a high pace of innovation and companies must therefore not limit themselves to reacting with a time delay. You must also be able to act quickly and respond proactively to changes.
What does “react proactively” mean in this context?
Ralf Riethmuller: New technologies such as IoT or SaaS solutions and the associated new business models such as renting instead of buying are making customers want to use them. Companies must therefore be able to meet precisely these needs with the appropriate solutions - and of course as quickly as possible and without great effort.
"Digitization is not an end in itself, but should help to improve your own competitive situation."Holger Schüler, Area manager Cloud and Services, KUMAVISION AG
What are the particular challenges in terms of agility?
Holger Schüler: ERP projects are often extensive and have a correspondingly long implementation time. By the time the project is complete, many of the requirements may have changed again. That's why we put such a strong focus on giving our customers faster access to modern technology and state-of-the-art solutions, so that they can increase their own agility and ultimately competitiveness. This requires the right technology on the one hand and agile project implementation methods on the other. Because without agile thinking and a proactive strategy, today's complexity of markets, requirements and technologies can no longer be mastered.
Ralf Riethmuller: Incidentally, this is a very important point: the technology must always follow the strategy.
Ralf Riethmuller: That said, reading about the latest technological trends is good for educating yourself. Because if you know about the current trends, you can be well prepared for coordination talks. This is important, because you also have to critically question the recommendations of consultants and examine them from different angles. But trends alone should not be the basis for how a company positions itself digitally. Because there is no point in simply chasing trends and imposing them on the company. Otherwise you can throw everything over the heap every two years. In order for the digital transformation to be successful in the long term, companies must pursue their own strategy. As a digitization partner, we therefore work with our customers to develop a suitable strategy that works from the inside out.
Holger Schüler: Ultimately, technologies are “only” tools for digitization. Companies should therefore not only look at digitization from a technological point of view, but always think from the business case as well. Digitization is not an end in itself, but should help to improve your own competitiveness.
"Decisions must be made on the basis of facts and reliable forecasts, not just gut feelings."Kay von Wilcken, CEO, KUMAVISION AG
Where do you currently see a lot of potential for improvement in SMEs?
Kay von Wilcken: For example, when it comes to reliable supply chains. This is still a huge problem for medium-sized companies. We support our customers with the right software to optimally design their supply chains, to identify impending risks at an early stage and to identify and use hidden opportunities. With the help of business intelligence solutions, we enable customers to gain better insights into their own company and to leverage potential by analyzing the current key figures for the flow of goods and values. The use of artificial intelligence also helps with analysis and planning. More accurate forecasts are possible on the basis of AI-supported models, which also include data sources such as market developments or material prices. And that's exactly what you need in times of highly dynamic developments in order to react correctly. Decisions must be made on the basis of facts and reliable forecasts, not just gut feelings. In this way, optimal procurement can be ensured. That extends to the efficient loading of containers.
That sounds technologically complex...
Holger Schüler: Luckily it isn't. Because with the technology platform Microsoft Dynamics 365 companies have access to all the technologies they need and can use them without any interfaces. Of course, our customers also benefit from this, because our industry solutions are all based on Microsoft Dynamics.
Now that everything seems to be happening online, cybersecurity is certainly one of the trends for 2022, or a relevant pain point, isn't it?
Ralf Riethmuller: In any case. Because data is worth its weight in gold. Accordingly, the threat of hacker attacks, phishing mails, Trojans and other spyware is increasing enormously. A successful attack can paralyze a company for several weeks, which can also be life-threatening. The greatest risk is a poorly set up IT infrastructure. However, security is often not classified as a top issue, for example because there is a lack of qualified employees. Building up knowledge is therefore just as important as providing employees with the best possible support. For example, artificial intelligence can help identify and eliminate threats so that phishing emails don't even make it to the inbox. The risk of not having access to your data due to a hacker attack is far greater than the risk of water and fire, against which data centers are usually protected.
Keyword "AI". Another trend is hyperautomation. How do you assess the development here?
Kay von Wilcken: The trend is clearly towards hyper-automation, i.e. away from task-oriented towards process-oriented automation. For us, however, this is not a new trend, but has long been part of our strategic orientation. With solutions from the Microsoft platform, such as Microsoft Power Automate, we can now offer our customers additional options with which even complex routine processes can be easily automated.
“In the meantime, medium-sized companies can catch up technologically with corporations.”Ralf Riethmüller, Head of Division Cloud and Services, KUMAVISION AG
What about digitization in medium-sized companies in 2022?
Kay von Wilcken: When it comes to digitization, there is still a great deal of uncertainty among German SMEs. Many entrepreneurs shy away from the complexity and the expected high costs. Compared to the European average, German SMEs are more reserved, which will lead to competitive disadvantages in the medium term. But with the current Microsoft technology, these concerns are quickly dispelled, because different solutions can be flexibly combined as building blocks as required. This saves development time and reduces project costs. The development of a future-oriented strategy is and will of course remain complex, no question about it, but the difficulty is often located in the area of implementation - and that is absolutely no longer the case.
Holger Schüler: This is also confirmed by the user numbers from Microsoft. Software as a service is no longer a niche product. Within two years, the number of customers who Cloudsolutions based on Microsoft Dynamics 365 use, from 2.000 to 20.000. This shows very clearly how mass-compatible the technology has become. It also has many decisive advantages: SaaS solutions relieve the IT in your own company because it no longer has to wait for the installation. In addition, the system is always technologically up-to-date because updates are automatically installed in the background. In addition, SaaS solutions are flexibly scalable and strengthen IT security because the data centers are operated according to the highest security standards. It goes with the Cloud but not just about the technology. It also supports agility, enables the implementation of location-independent work and forms the basis for closer networking of the various departments through the seamless interaction of different solutions such as ERP, CRM, collaboration tools such as teams and mobile apps, for example for the field service.
Ralf Riethmuller: That's the way it is. Thanks to these opportunities, medium-sized companies can now catch up with corporations in terms of technology. This is a real opportunity to assert yourself in the market. However, by no means all medium-sized companies take advantage of this opportunity. Due to the increasing pressure from all sides and the associated lack of time, many managers have not yet dealt with the topic of digitization or have dealt too little with it.
Holger Schüler: It's like the lumberjack in the forest: he prefers to work with a blunt saw instead of taking the time to sharpen the blade - even though he can go faster afterwards. Translated into the business context, this means: Urgent tasks are almost always prioritized higher than important tasks, although in the long term this is the wrong approach. In the short term but of course simply necessary. Our experience also shows this: The contact persons on the customer side know that there is a need for action. Because of the strategic complexity of the topic, however, they usually prefer to deal with operational issues. That's what they should do. But that's why it's all the more important to get support. In addition to well-founded digitization advice, we also relieve our customers in the implementation of the digitization strategy. Our experts temporarily join the company as CDO (Chief Digital Officer, ed.) and take on strategic and managerial tasks in the project.
Surely some companies are still waiting because they have not yet received any signals from their own customers that digitization is necessary?
Holger Schüler: Waiting is not an option, otherwise others will gain a lead that you cannot quickly catch up with. Due to increasing internationalization and digitization, the competitive edge is increasing at an ever-increasing rate. If you want to keep up in the future, you really have to step on the gas now. Approaching slowly is no longer enough. The effort required to stay connected increases the longer you wait. And then it actually becomes more expensive and takes longer. On the other hand, whoever gains a small head start now can hope for exponential development.
What are the chances of success, especially for medium-sized companies?
Ralf Riethmuller: Apart from significantly reduced resource requirements for process handling, especially routine tasks, the development of new digital contact options with customers is very promising. On the one hand, these make companies less susceptible to external regulations such as the closure of branches due to the pandemic. On the other hand, they can react quickly to changing customer behavior. The following applies: What customers use privately, they now also expect in the B2B area. In other words, simple and direct access to information, for example through digital services such as virtual assistants. And web shops can also be integrated relatively easily into the ERP system. In this way, companies can open up new sales markets through e-commerce and inspire customers with a consistent shopping experience. Querying the availability of products, inquiries about technical details and their reservation and order are then carried out via automated processes. This means that a large part of the time-consuming maintenance of the web shop, which was standard until a few years ago, is no longer necessary for companies.
Last but not least: trend topics are not only relevant for corporations, but also for medium-sized companies?
Kay von Wilcken: Of course. However, the trend topics identified must also be translated into everyday reality and every company must clarify for itself what the abstract terms actually mean in practice. Because the digital transformation is absolutely necessary for medium-sized companies. But a trending topic like AI is not really tangible for most people. And this is where we come in: We break down the relevant topics into practical solutions that are easy to implement. In this way, we can accompany our customers step by step in the digital transformation. An important building block in this context is our newly created offer in the area of digitization consulting. Because without experienced experts who show why the respective topic is relevant for companies, which fields of action open up through their use and how the solution can be implemented concretely and, above all, securely and promptly, digitization will always remain piecemeal in the end. Frequent questions that our experts always answer are: How can processes be accelerated across departments? Which solutions can be used to reduce the costs for the necessary IT infrastructure? Or: How do we ensure that all legal and regulatory provisions are complied with? The goal of our consulting is always the development of a holistic digitization strategy together with the customer. We are particularly looking forward to this in 2022. Strengthening SMEs with foresight by accompanying companies into their own digital future.