Is the German SME sector sleeping through digitalisation?
11 Jan

Are German SMEs missing out on digitalisation?

Digitalisation has become the all-encompassing buzzword by which the transformation of our society in relation to information technology can be understood. Only the German SME sector is still hesitant.

Tools that (can) drive this digitalisation include ERP solutions such as SAP Business One. Of course, it would be too short-sighted to focus only on individual software solutions. The digital transformation is more far-reaching than even buzzwords like Industry 4.0 can express. It encompasses new technologies as well as machines, organisations and business models. Last but not least, it affects individuals and their skills.


SAP away from the old ERP ways

The solutions and new approaches that SAP, for example, is researching and working on today often have little to do with the origins of pure enterprise resource planning. Rather, behind the mastery of BIG DATA is the idea of all-encompassing information processing from all areas of a person's life. As far as Germany is concerned, it does not seem to be in a bad position to begin with. After all, we have quite a bit of intellectual and technical infrastructure to cope with the digital challenge. At the same time, one of the main pillars of the German economy is small and medium-sized enterprises. These are considered to be extremely efficient and sometimes even innovative worldwide. But when it comes to digitalisation, it seems that a gap has already opened up between them and industry, and that gap is widening all the time.

Studies see a need for SMEs to catch up

That Institute for SME Research in Bonn has now published a study in which SMEs were surveyed. The aim was to ascertain how much progress has been made with digitalisation in SMEs. The results suggest that there is still a lot to be done, or to put it positively, there is still plenty of "digital potential" for German SMEs to tap.
For example, in the study "Importance of Digitalisation
in SMEs", companies with a turnover of between one and ten million euros stated that they had comparatively high deficits in controlling.

The ubiquity of sensors in medium-sized manufacturing companies still seems to be a 4.0 pipe dream. While the workflows of the organisations surveyed are already supported in 26%, logistics is already digitally controlled in 35% of the companies.

74 % of all companies surveyed even stated that Internet-based information and communication technologies had either no or no decisive influence on their business model.

Fear of digitalisation

In some cases, fears of digitalisation are even expressed. Perhaps not without reason, one or two small entrepreneurs fear becoming more uniform and comparable in the digital mainstream.
There is definitely alienation on the part of small and medium-sized entrepreneurs.


"Every third entrepreneur states that they are no longer able to follow the numerous trends in information and communication technology. As a result, the entrepreneurs concerned are hardly in a position to even identify important trends for the company, let alone make a proper weighing of the benefits and costs of an investment in digitalisation."

End quote

The ongoing discussion about the Data security in companies that take advantage of global data networks has not exactly encouraged openness to all-encompassing digitalisation.

Since the IFM study is not the only one to come to these conclusions - there is a survey by Deloitte that comes to similar conclusions - voices of warning are being raised. Thus it was already 2014 in the Handelsblatt to read:


"You have to let that sink in first. With Industry 4.0, a massive wave is rolling towards German SMEs, production processes are changing globally due to the progress of automation, it is estimated that more than 50 billion devices will be connected to the network by 2020, i.e. in a mere six years, and SMEs do not find this relevant. Is that still chutzpah or just ignorance?"

End quote

Don't panic about the digital refuseniks

But perhaps we shouldn't be too alarmist about the digitalisation of German SMEs. The bottom line is that it's about tools. Tools that must serve the business purpose of a medium-sized company. The consideration of when and which tools should be used has always been a reason for thorough reflection on the part of an entrepreneur - at least in the SME sector. It cannot be the role of IT experts, consultants and service providers to lash out at supposed "digitalisation impeders". We should help them to act after all.



Leave a Reply

Your email address will not be published. Required fields are marked *
You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>