Digital transformation for SMEs – an insight into industry practice
Digital solutions offer a wide array of opportunities to small and medium-sized companies, but unfortunately it is precisely these kinds of firms that fail to exploit the full potential of such modern technology. One of the reasons for this is that they lack the right kind of software to digitalize the value chains within their businesses. The Steinbeis Consulting Center Agile Development of Information Systems has developed a system called Immediate Designer to offer SMEs a financially viable solution to this problem.
In March 2016, the industry association Bitkom issued a report called the Digital Office Index. Its synopsis of the current state of affairs was upbeat: “Four out of ten businesses across all sectors of industry (40%) have developed their own strategy for digitalizing their business processes.” The fact that this number is no higher is mainly because of “the scale of required investment” (80%) and the “lack of qualified staff” (78%). The survey mainly revolved around standard tasks, however, such as accounting and document management. Also, only companies with 20 or more employees were questioned. So in actuality, the survey left out the lion’s share of businesses in Germany.
It is small companies in particular (with fewer than 20 employees) that have so much to gain from digital transformation. Often at such companies, all employees and the business itself are actively involved in value creation, even if they also have administrative tasks and organizational issues to deal with. When companies are experiencing growth, this frequently places an extra burden on staff and can result in bottlenecks. Typically, such companies have no access to the right software solutions. Their processes and internal procedures are less formalized, even if they are tightly interlaced with the specific value-adding activities of the business. This makes procedures all the more difficult to capture digitally with standard software. Alternatively, doing so will involve major outlays on consulting, adaptations, and training. In most cases, the conventional approach of specially matching customized software to the company makes little sense from a financial standpoint.
The Steinbeis expert Dr. Holger Gast has been working at his Steinbeis Consulting Center, Agile Development of Information Systems, to develop customized software for existing and established processes. Thanks to a special development tool called Immediate Designer, he is in a position to offer attractive cost scenarios. Immediate Designer works along similar lines to tool kits, offering standard components found in a variety of applications so they can be combined flexibly as required. This makes it possible to quickly create templates and databases for specific tasks with special graphical elements. Immediate Designer uses these engineered graphical components to produce finished software, and this can be used as web applications on most end devices. As a result, the overall development effort for creating individual software to optimize a particular process can be accelerated by a factor of between 5 and 10. One key requirement in this field of work is flexibility. On the hand, the field of application that the center is involved in is broad: Projects worked on by the Steinbeis Enterprise range from classic administrative tasks encountered in business to project management and the application of robot simulations. Furthermore, it must be possible to edit new software without major outlays, especially if a firm intends to shift its business focus, or its internal processes need to be adapted to new requirements or customer needs. Deciding to construct software based on building blocks offers flexibility on both of these fronts.
Gast places emphasis on methodically formalizing existing business processes and making these uniform. If a project involves the specific know-how of particular employees or individual decisions, the new software can structure information and optimize team communication. As repeated processes arise over time and experience is gathered with the tool, automating calculations offers plenty of potential to make improvements.
As a result, it’s important that a solution addresses long-term planning and sustainability. Should users require new functions – whether it’s two months or two years after introduction – any extensions to functionality must be just as flexible and efficient to introduce as they were when programming the original software. It is especially here that the advantages of the tool kit approach are clear, especially compared to using standard software. It can be extremely expensive changing or expanding standard solutions, whereas building blocks are based on the principles of “combination and collaboration,” so new functions can be inserted into existing software structures.
The Steinbeis expert finds it important to share tasks during development for every project. His role as a software architect is to suggest technically feasible solutions and draw on his experience gathered on previous projects. Ultimately, however, the users make all key decisions regarding appearance and functionality. This is because only they can really understand how such factors will impact their actual work. During this coordination phase, it is important to listen carefully at the beginning and think creatively – the optimum solution will only be possible if people are willing to switch between technical factors and user issues. This also unveils new insights into working processes. Immediate Designer makes it possible to rapidly introduce new functions and evaluate them by drawing on practical examples, and this quickly takes everyone to their destination – without major detours.
One big challenge with such projects lies in existing data relating to current business transactions. Mostly this is held in Excel files or Access databases and for the software introduction to run without hitch, it will need to be migrated automatically. The way such data is formatted is typically good for the human eye, but it is not a good fit with professional databases. With Excel lists, logically separate information is often entered into one line to provide users with a quick overview. For example, lists of data on current client projects will also show core customer data and details on the current status or cost calculations. This is unlike databases, which will store such information in different tables that are linked to other data. “Normalizing” data is crucial for developments further down the line and this will be essential if the new software is to remain sustainable. To transfer human-readable data into machineoptimized formats, Gast has developed his own special tool, which supports the complex process of normalization. The software developer uses sample data to mark sections within lines that can be linked to database tables. The Steinbeis expert’s tool then reads data and saves it with corresponding links, in keeping with the mark-ups in the database. His tool also makes it possible to re-read edited files, assuming the records can be identified according to clear criteria such as customer or order numbers. In such cases, the tool simply enters the changed values into the corresponding fields in the database. This approach has made it possible to provide project functions such as mailing lists. Users simply download email addresses and names into an Excel file, send out emails using their usual software and then enter responses or error messages into the spreadsheet. These additional entries can subsequently be transferred back directly into the database.
Digital transformation at SMEs thus makes it important to deal with some extremely specific challenges. The existing standard software usually addresses value-adding processes that are specific to the individual business, but it’s precisely such processes that need the right supporting software in order not to threaten business growth. But at the same time, any transition to new systems must happen step by step, shifting away from previously formalized business processes to new ones that involve a series of individual decisions. To keep the business running smoothly, any information that was previously entered manually has to be transferred into a central database. Ultimately, projects only succeed if the software development process itself is flexible and can adapt to changing requirements within the company. It is this blend of challenges (and the opportunities these present) that drives Gast as he works with customers on finding the right solution. His aim is for each solution to be implemented expediently in the short term and at the same time deliver viable solutions in the long term.
PD Dr. Holger Gast is director of the Steinbeis Consulting Center for Agile Development of Information Systems, which offers its customers the agile, model-based development of information systems, the development of datacentric Web applications, and the prototyping of information and administration systems.