“Digitization is not a value in itself”

Workshop: “From connectivity to (digital) revenue”, August 29, 2019

The late summer heat does not prevent the participants from attending the workshop of the Data Mining and Value Creation project at the Städtisches Kaufhaus in Leipzig. Representatives of seven companies from areas as diverse as heating and cooling technology, wire drawing equipment, tableting technology, compressed air systems, open pit mining equipment and pumping systems came together to discuss how connectivity and the resulting data can be turned into revenue.

As different as the industries are – the main challenges are very similar. What they all have in common is the desire to exchange ideas with other companies. They want to compare where they stand in comparison to others and how they solve similar problems. Again and again, they ask for concrete practical examples and procedures in order to identify and prioritize relevant and worthwhile fields of action for their own companies. After all, it is not just a matter of digitizing processes. Barbara Mesow of Projektträger Karlsruhe, a supervisor of publicly funded research and innovation projects, sums it up as follows: “Digitization is not a value in itself”.

To introduce the topic, Prof. Dr. Heiko Gebauer, Project Manager Data Mining and Value Creation, gave a lecture entitled “From digital busyness to digital business”. His thesis is that services are the main way to monetize digital offerings. This raises further questions: Do customers allow connectivity? Who are the competitors, do they come from the same industry or do internet giants like Amazon and Google have to be considered? Ultimately, it's about convincing customers of the added value of digital services and inspiring them with it. Without enthusiasm, they will hardly understand how to pay money for new data-based services. Mutual trust and long-term benefits for both customers and companies contribute to success.

In the active part of the workshop, the aim is to describe the benefits of the digital offerings that the present companies want to achieve for their customers. Different levels of benefits (productivity, savings, simplicity, image, risks, sustainability) are used. The participants become active immediately. They discuss with each other, there is laughter to be heard. The pinboards in the seminar room are filled with diagrams and notes.

Both the company perspective and the customer perspective become the focus of the second round of discussions. On the one hand, there are thoughts on changing competency requirements for employees. A clear vision is needed to inspire the workforce to embrace digital transformation. One company has established a mentoring program on this topic, another has appointed a Digital Transformation Officer. What all these approaches have in common is that they recognize the urgency of the topic of connectivity.

On the other hand, there is a lack of understanding of the benefits of data-driven services, especially on the part of customers. Here, a clear cost-benefit analysis can be convincing. Long-term strategies are important both in the company itself and in customer relations. A focus on products will no longer suffice. Those who want to remain fit for the future must invest in product extensions and changes to business models through digital services.

Heiko Gebauer points out that it is not enough to just address the people who are concerned and thus perhaps overlook open-minded people in one's own company and on the customer side. He advises the participants: “Give your digital pioneers a stage. Let them fail, too. But make your connectivity efforts visible.”