CASE STUDY

THE IMPORTANCE
OF DIGITAL
TRANSFORMATION
FOR SWISS SMES

Author:
Axel Uhl (ZHAW)
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THE IMPORTANCE OF DIGITAL
TRANSFORMATION FOR SWISS
SMES
One speaks of a transformation when there are complex and
fundamental organizational changes. Consequently, digital
transformation stands for complex organizational changes
through the use of digital technologies with the aim of
generating competitive advantages (own definition). Digital
technologies can affect business processes, products, services or
even business models.

Digital transformation is currently a much-discussed term. There

is no lack of relevant publications on this topic. However, there
is a significant difference between the hype about digital
transformation and its actual implementation. Especially among
the SMEs in Switzerland, which are so important for the labor
market, digitalization seems to be progressing much more slowly
than one would have expected.

The reasons given for the sluggish implementation are a lack of

knowledge about the business and technological possibilities,
technical problems, lack of standards, lack of data security, and
high costs. Often the concrete pressure for change is also
missing in companies because sales are currently still stable. [1]

The literature generally prefers to deal with the technological

possibilities rather than the obstacles of digital transformation.
Without doubt, technology is an element of digital
transformation that should not be underestimated.

[1] cf. Saam, M., Viete, S., Schiel, S.: Digitalization in SMEs: status
quo, current developments and challenges. In: ZEW, 8/2016; p. 13. Retrieved on
22.12.2018 https://www.zew.de/publikationen/digitalisierung-im-mittelstand-status-
quo-aktuelleentwicklungen-und-herausforderungen/
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Technology is only the enabler of digital transformation, the tool
with which companies can improve their competitiveness, their
business model, their products or processes.

PEOPLE ARE CRUCIAL IN

DIGITALIZATION
But a "fool with a tool is still a fool". That is why it is crucial for
the success of the digital transformation that people in the
companies know how to make the best use of the technologies.
People and technology must work together competently and
harmoniously.

Many executives have realized that digitalization has changed

the way their customers buy their products and services forever
and they are aware that their organizations would need to do
more to effectively leverage the opportunities digitalization
offers.

Nevertheless, for many companies, digitalization remains more of

a sideshow and not the main event of their activities. Often, they
only do what everyone else seems to be doing: online presence,
social media presence, online marketing.

But to be successful in the future, it takes more than just

creating these online basics. It will not be enough to just put
more ads online or create a website optimized for mobile
devices.

It is much more than that. New core competencies such as

innovation, agility, and transformation capabilities need to be
developed to complement the existing business functions.
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Only with the help of new skills can SMEs develop their business
model in such a way that they can continue to enthuse today's
increasingly networked and well-informed customers in the
future. SMEs must ask themselves numerous questions in this
regard: How to proceed with the digital transformation? What
new skills, tools, processes, business activities, and technologies
do we need? What new business models are emerging? Are new
competitors emerging in the traditional market by applying the
new technologies in a disruptive way? How do we do this when
resources are limited and the operational pressures of business
remain?

One of the major challenges in digital transformation is that

complex changes have to be implemented while the business
continues to run. You could compare this to open-heart surgery.
One serious mistake and the patient is dead.

In addition, digital technologies are developing ever faster and

people in the workplace have great difficulty in keeping up. The
development of human processing capabilities is taking longer
than the creation of ever more powerful silicon chips, whose
computing speed doubles every 12 to 24 months. No, people
cannot keep up with that. But that is not even necessary. What
matters is how people use the new technologies and how they
adapt to the digital trends.

DIGITAL TRENDS ARE CHANGING

ALL INDUSTRIES
The digital trends are valid for all industries, but are affecting
them at different speeds. Some of the trends reinforce each
other and further accelerate the changes.
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Therefore, in the future everything that can be digitalized will be
digitalized and everything that can be automated will be
automated. Online information, online music, online movies,
online services – all this was just the beginning. Even the "self-
check-ins" at airports, self-payment cash registers or self-driving
cars are only the first examples of the advancing automation. In
all companies, this development will take place sooner or later:
Warehouses where goods are automatically loaded or unloaded,
pallets automatically loaded or factories where production is
fully automated. In banks and insurance companies today,
computer programs process documents, file them systematically,
obtain insurance offers, decide on the payment of invoices,
orders, settlement of damages, etc. Stock exchange trading is
carried out largely automatically by software bots, which buy and
sell securities within seconds and calculate new prices. All these
developments are repeatedly described as disruptive. What can
be described negatively as destructive, positively however as
forward-looking and progressive.

Due to the increasing networking and use of computers,

databases, and software programs in the cloud, practically
unlimited computing capacities are being created and the costs
for the use of computing power are constantly falling. This
makes digitalization even more efficient and attractive.

Digitalization has laid the foundations for the increasing

merging of the real and virtual worlds. Whereas IT used to aim to
design simple models of companies and to map some basic
processes digitally to ensure more efficient processing, today a
fusion of the real and virtual worlds is taking place. For example,
the industrial group ABB uses virtual reality (VR) to virtually test
new control rooms of industrial plants, such as the drive of a
gigantic mill in a copper mine. The machines have very
comprehensive manuals. These can be presented to a technician
using data glasses.
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Gone are the days of carrying around heavy and unwieldy
manuals. [2] At the airline Swiss, the pilot training is now almost
completely virtual. The prospective pilots spend a large part of
their flying hours in the flight simulator. There they can learn all
the routine activities, but also practice difficult maneuvers or
situations without danger. A similar technology is augmented
reality (AR), i.e. the overlaying of the real world with digital
information. At first it was simple use cases, such as providing
repair instructions for service staff or information for warehouse
staff about which goods to take off the shelves next. In the
meantime, luxury goods manufacturers such as the watch
industry, fashion labels, etc. have discovered the possibilities of
virtual worlds for themselves. They create new customer
experiences by merging the real and virtual worlds in their
flagship shops, thereby strengthening their brand image.

Disintermediation is another digital trend. This means that

digital technologies are eliminating intermediaries, wholesalers,
and retailers. For a long time, the benefits of physical, location-
bound retail companies were to bring products into the reach
of end consumers, to make an assortment selection, and to
advise end consumers. Due to digital technologies, these tasks
are becoming increasingly unnecessary. Online market places,
search engines, videos for product description, "same-day
delivery" bring the products into the end customer's area of
availability – with a larger selection, lower costs, and often also
better advice. This causes a decline in sales in stationary retail
trade in favor of online trade.

In many cases, however, the trend towards disintermediation is

supported and also complemented by another trend: the sharing
economy.

[2] cf. Höffinghof, T.: What's going on in Switzerland on the subject

of virtual reality. Retrieved on 22.12.2018.
https://www.handelszeitung.ch/blogs/digital-switzerland/was-der-schweizsachen-
virtual-reality-laeuft-1200751
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This development is based on the current change in values in
society, which makes the possession of consumer goods appear
less important in favor of sharing/lending. Sharing means that
costs are shared among many users while at the same time the
use of the consumer goods is increased. The goods are brokered
via online marketplaces. Prominent and well-known examples of
this development are well-known companies like airbnb and
Uber.

Probably the most radical, but at the moment still difficult to

estimate attack on the intermediate trade, however, is coming
through 3D printing. The technology is not new. Companies have
been using 3D printing since the late 1990s to produce
prototypes for design studies. While in the beginning it was
mainly plastics that could be processed in 3D printing, today it is
also possible to process various metals, ceramics, concrete, and
much more.

With 3D printing the stationary trade can be almost completely

replaced. The products are printed directly at the end customer
or in the Amazon Printing Trucks on the way there. The printing
of spare parts for consumer goods is particularly efficient.
Producers are often obliged to supply spare parts even years
after production has ended. This means that production machines
still have to be set up and maintained and – to avoid long
delivery times – large stocks of spare parts have to be retained.
Both of these are not necessary if a spare part can be printed
when needed. In this case we also speak of the "Zero Length
Supply Chain".

Mobility is another digital trend. The smartphone is becoming

the center of life and cockpit of most people. We communicate
with it, obtain information, listen to music, or watch movies, pay,
control our devices in the "connected home" or our self-driven
vehicle. People all over the world spend a large part of
their time with mobile devices.
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They use them to get up in the morning and go to bed with them
in the evening. Companies must prepare themselves for this if
they want to continue to reach their customers in the future.
"Mobile first" means that all communication and interaction with
customers takes place first and foremost via the mobile device.
How big the mobile potential for change is can also be seen in
the fact that Apple is now selling more units of its "smart watch"
than the entire Swiss watch industry combined [3]. The next big
boom will be experienced in mobile all-rounders with
applications in the health sector experience, when heartbeat,
blood pressure, food intake, movement data, etc. can be stored
and transmitted by mobile devices.

But not only will everything become more mobile, but also more
intelligent. Artificial Intelligence (AI) is finding its way into
almost all areas of life and business and is the magic word for
many problems that we would like to solve using this new type
of "artificial" intelligence. From the intelligent processing of
images, language, and characters, through the creation of new
types of expert systems, to the development of neural networks,
countless new digital applications are emerging in parallel. In
combination with Big Data analyses and the inexhaustible
computing capacities in the cloud, a kind of super-intelligence
is emerging.

This is also finding its way into robot technology. Whereas the
robots of the first generation were still "stupid" machines that
could usually only perform a single task using a fixed program
code, the next generation of robots will be able to learn
independently and perform different tasks. These so-called
"multi-purpose" robots will take advantage of AI in the form of
speech recognition and production, image processing, position
assessment, motion execution, and mobility.

[3] cf. Torcasso, D.: Apple is on the heels of the Swiss watch
industry. In: Handelszeitung of 8.2.2018. Retrieved on 22.12.2018
https://www.handelszeitung.ch/unternehmen/apple-ist-der-schweizer-uhrenindustrie-
dichtauf-den-fersen
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They will thus come closer and closer to the human being, which
means that humans will have to (re)remember skills such as
creativity and emotionality, which are not so easy to imitate.

Figure 1: Overview of digital trends

FRAMEWORK CONDITIONS FOR THE

DIGITAL TRANSFORMATION
But despite these unmistakable digital trends, many Swiss
companies are acting far too hesitantly and are leaving the
future to digital giants such as Apple, Uber, Amazon, etc., which
are rapidly transforming these markets into so-called quasi-
monopolies.
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It is not that SMEs would not try out new technologies. However,
they do not adapt the organizational framework to the new tasks,
but leave their employees in the narrow guidelines of outdated
ways of thinking, traditional structures, and outdated legacy
systems.

But the well-trained and motivated employees that are urgently

needed for the digital transformation do not want to spend their
time fighting internal battles against outdated rules or
struggling with outdated technical systems.

Instead, companies are now "always on", which means that

different functional teams must work together on a daily basis to
jointly optimize products and customer experiences. This
requires a large learning curve for all involved and leads to
a higher workload during the transformation.

Major changes due to the new digital business models are often
accompanied by strong resistance from some employees. They
ignore, deny, and fight the new opportunities before they can
finally be accepted and adopted.

Companies must therefore recognize that technology is the

easier part of the job. More difficult is the design of change
processes in the organization and the implementation of new
business models. This requires the creation of new, more flexible
framework conditions in which transformers can develop more
freely.

Many organizations have created new roles for the digital

transformation. Those responsible, often called Chief Digital
Officer, are deliberately placed at the interface between IT and
business departments – as so-called bridge builders.
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Once there, they are first watched curiously by the established
top dogs in the organization and ridiculed for their innovative
ideas. But usually it does not take long before the established
managers realize that digitalization could dramatically change
their current ways of working. They then often try to protect
their spheres of influence and power, and digitalization ends up
in unproductive power struggles.

There is no doubt that digitalization requires the cooperation of

both the business departments and IT. In some companies,
therefore, additional change agents are hired to ensure
interdepartmental cooperation. These people must be prepared
to take a high risk because they disrupt the convenient and
proven status in the organization.

But these are only attempts to counter the symptoms of a lack of

acceptance for digitalization. They do not address the actual
causes. These are the insufficient digital skills of management
and employees, hierarchical rather than network-like decision-
making structures, too much management focus on the "here and
now" rather than the future.

The fight against the causes would therefore have to begin much
earlier – namely at school, in the training professions, and at
universities. It is there that the digital basics and skills must be
acquired, so that managers and employees in all sectors and
functions have the skills and motivation to drive the digital
transformation forward. It will not be enough to leave these
skills to individual employees with a degree in computer science.
The topic of digitalization is a key focus of every education –
from medical studies to law.
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THE IMPACT OF DIGITALIZATION ON
EMPLOYMENT: FORECASTS ARE
DIFFICULT
However, a successful digital transformation also requires
intensive consideration of the potentially negative effects. One
such negative impact could be the increasing merging of
people and technology. For the first time in human history, tools
are no longer just used, but seamlessly fused with the human
body. One example is retinal implants, which restore the ability
of blind people to see movements and shapes. Future versions of
these implants could give people the night vision ability of an
owl.

This example, which is still at the beginning of its development,

shows that the merging of humans and technology could create a
new type of "super-humanoid" that would be many times
superior to the humans of today.

Digitalization will also have an impact on employment. However,

it is unclear what kind of impact digitalization will have. Critics
fear that digitalization could possibly set in motion a process of
job destruction that could result in falling purchasing power,
lower consumption, less demand, and an overall shrinking
economy. This cannot be completely ruled out – perhaps our
current economic model, which is geared to permanent economic
growth, has simply overtaken itself.

However, it is difficult to predict the impact of digitalization on

employment and studies on this subject come to very different
conclusions.
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In a recent study, the World Economic Forum (WEF), for example,
draws a far from rosy future and sees jobs threatened by
digitalization. According to the prognosis, by 2020 there will be
a net loss of around 5.1 million jobs worldwide. If this
development were to proceed more quickly, we would already be
facing apocalyptic job losses in 15 years.

ING DIBA sees 18 million jobs in Germany threatened by

digitalization. [4]

The ZEW research report from the same year sees 9% of today's
US jobs in danger and 12% of German jobs. [5]

In its study on the future of work in Switzerland up to the year

2030, the consulting firm McKinsey assumes that digitalization,
automation, and AI can lead to a productivity boost of about 1
percentage point per year. In terms of changes in the number of
jobs, about as many jobs will be displaced as new ones will be
created. [6]

[4] cf. ING DiBa "The robots are coming – consequences of

automation for the German labor market", 2015. Retrieved on 22.12.2018.
https://www.ing-diba.de/pdf/ueberuns/presse/publikationen/ingdiba-economic-
research-die-roboter-kommen.pdf

[5] cf. Bonin, H., Gregory, T., Zierahn A.: Transfer of the study from
Frey/Osborne (2013) to Germany. In: ZEW Research Report 6/2015. Retrieved on
22.1.2018. https://www.bmas.de/SharedDocs/Downloads/DE/PDF-
Publikationen/Forschungsberichte/fb455.pdf?__blob=publicationFile&v=2

[6] cf. McKinsey Global Institute: “The Future of Work: Switzerland’s Digital
Opportunity”, 10/2018, www.mckinsey.com/mgi.
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The WEF assumes a net loss of 5 million jobs worldwide until
2020 [7] and Diginomics also forecasts the loss of 3.4 million
jobs in Germany in an article in the FAZ. [8]

Looking at the effects of digitalization on the various sectors, a

Deloitte study assumes that in the short term, ICT and media,
banks, insurance companies, education, professional services,
and real estate in particular will be strongly affected by the
disruptive forces of digitalization [9]. A little later, but with
similar force, it will hit manufacturing, healthcare, energy
supply, transport, and agriculture.

A Davenport model is used as a basis for assessing which

jobs/tasks are particularly at risk. [10]

The model distinguishes between the degree of dependency in

cooperation (individual work vs. team work) and the complexity
of the work (routine vs. interpretation/evaluation).

With the help of this model four fields can be identified.

[7] cf. WEF: Digitalization costs 5 million jobs. In: Tagesanzeiger

from 18.1.2016. Retrieved on 22.12.2018.
https://www.tagesanzeiger.ch/wirtschaft/konjunktur/digitalisierung-kostet-fuenf-
millionenjobs/story/30453367

[8] cf. Löhr, J.: Digitalization destroys 3.4 million jobs. In: Frankfurter Allgemeine
Zeitung of 2.2.2018. Retrieved on 22.12.2018.
http://www.faz.net/aktuell/wirtschaft/diginomics/digitalisierung-wird-jeden-zehnten-
diearbeit-kosten-15428341.html

[9] cf. Deloitte: Survival Strategy Digital Leadership, 2015. Retrieved on December 22,
2018.
https://www2.deloitte.com/content/dam/Deloitte/at/Documents/strategy/ueberlebenss
trategiedigital-leadership_final.pdf)

[10] cf. Davenport, T. 2010: Process Management for Knowledge Work. In J. vom
Brocke; M. Rosemann; (Ed.), Handbook on Business Process Management, Springer,
Berlin/Heidelberg
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Figure 2: Following Davenport, T. 2010:

Process Management for Knowledge Work loc. cit.

The first field is the transactional model. Occupations that

conform to the transactional model are characterized by routine
work, clear rules, procedures, and training, and will be most
affected by digitalization and automation.

Professions that fall within the field of the integration model are
characterized by systematic repetitive work, are based on formal
processes, methods or standards, and are characterized by close
cooperation between several participants. These occupations are
also at high risk from digitalization because the formalized
processes provide a good basis for e.g. digital workflows.

Professions in the expert model field are characterized by

analysis activities, evaluations, expertise, and experience, as
well as the presence of top performers. However, these
professions are also threatened by digitalization because
networked computers learn faster, can evaluate an infinite
amount of information and are completely objective in their
analyses/evaluations.
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The collaboration model describes professions that have a lot to
do with improvisation, that require a high level of expertise in
various subject areas, and that are characterized by working in
flexible teams. These activities are least endangered by
digitalization because of the lack of clear rules or procedures.
However, it must be noted that the latter professions could tend
to increase, but do not yet account for the majority of jobs today.

However, it can be stated with great certainty that certain jobs

will disappear in the near future, because technologies are
already able to perform these jobs better than humans. All
types of drivers, many cashiers, production workers, accountants,
administrative staff, telephone operators, and translators will be
replaced by modern information and communication systems as
well as language and translation systems.

When assessing which activities will be eliminated by

technology, it also makes sense to analyze what specific
strengths of software or robots are in comparison to humans.

The technology is better at processing data obtained by sensors,

IT systems or by networking with other computers. This includes
the processing of huge amounts of data (Big Data), the
objectivity and impartiality with which the analysis is performed,
the measurement of physical quantities, and the fatigue-free
execution of clear reaction patterns for precisely defined tasks.
In addition, computer programs and robots, unlike humans, are
capable of "multitasking". In all these activities, technology is
superior to humans. Companies must therefore consider how they
need to design their work in order to use technology to
complement human capabilities in the best possible way.

On the other hand, people have abilities where they are superior
to technology. Humans have feelings, emotions, sensations. They
have experience and have a behavioral memory, as well as a high
competence in solving new tasks.
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People are able to assess complex issues and make decisions in
difficult situations. People have imagination and are flexible.
They can adapt to new situations or environmental influences,
have willpower, and can communicate in different ways.
Technology can support these abilities, but cannot replace them.
It is the task of companies to design people's work in such a way
that these skills are challenged and encouraged.

IS THE DIGITAL TRANSFORMATION

A STRATEGIC TASK?
After discussing the trends, the developments, but also the
effects on employment and people in this article, we would like
to conclude by asking whether digitalization is of strategic
importance from the point of view of SMEs.

The proponents of this thesis argue that digitalization also

means innovation, and this in turn, would be a prerequisite for
progress and therefore of strategic importance. This is justified
by the many examples of innovations in business models,
processes, and products resulting from digitalization.

However, opponents of the thesis argue that while innovation

and progress are essential for any business, they wonder what to
do as an SME unless you have a world-class innovator like Steve
Jobs, Jeff Bezos or Elon Musk? Innovation can sometimes be very
simple and analog, like the shower head that allows you to
shower comfortably without getting your hair wet.

But on the other hand, innovation can also be complex and then
innovation is usually very difficult to implement. Sometimes it
can even mean completely reinventing a business.
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Of course, there are many expert tips on how to become more
innovative. Some experts say that you simply have to be more
like "Google", or like a "startup". But there are also
recommendations: "You have to be more innovative, more
creative, unique. You have to take advantage of digitalization,
have great ideas, and put them into practice mercilessly. Look at
it – that's how everyone else does it".

There is no doubt that innovation plays a particularly important

role for SMEs. But, according to the critics, SMEs are often not
lacking in innovative ideas at all. A major problem is the
successful implementation of innovations. On average, only 12
out of 100 development projects become commercially
successful. [11]

Often the innovations would fail due to the lack of willingness in

the organizations to change. This is because change is seen as a
risk to the status quo.

SMEs therefore need to focus more on how they can improve the
organization's willingness to change and not just on the issue of
digitalization.

Another hypothesis of the advocates of strategic importance is

that only those companies that digitalize their business model
will survive. Instead of "always on", the threat of "out of
business" would otherwise arise.

They argue that the companies' most dangerous competitors

today are no longer from their own industry, but from the
digital world. In fact, digital companies have brought about
dramatic changes for some industries and even created "quasi-
monopolies". 

[11] cf. TCW: Selection of innovation projects. Retrieved on 22.12.2018

https://www.tcw.de/news/auswahl-von-innovationsprojekten-350
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Can one deduce from this that this means that all other market
participants are "out of business" if they do not become like
Uber, Airbnb, or Google? Hardly, according to opponents of the
strategic importance of digitalization. Rather, companies must
consider how to work with these monopolies or they must find
new niches to create competitive advantages.

The proponents of digitalization try to prove its strategic

importance through statistics. To this end, they show the
empirical correlation between IT investments and the economic
success of companies. The more companies invest in
digitalization, the more successful they are.

The opponents of strategic importance explain the connection

quite differently, however. Many successful companies are
successful users of digitalization – but these companies would
have long been based on robust business models that they
already had before they invested heavily in IT. It is more likely
that they can afford to invest in digitalization because of their
market strength.

For this reason, opponents of the strategic importance also

believe that only a few companies will succeed in generating a
strategic advantage through digitalization. Only companies that
would establish a quasi-monopoly can expect long-term
differentiation from IT. In the far more frequent cases,
investments in IT cannot bring about long-term differentiation.
Rather, more digitalization leads to more standardization, i.e. to
an alignment of previously different processes. In this way, the
customer-effective differences and possibilities for
differentiation disappear too. With the introduction of standard
software solutions such as SAP, Oracle, etc., the processes at
many companies would already have been largely harmonized
throughout the industry.
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With the further spread of cloud solutions, standardization, and
the corrosion of competitive advantages will continue to
increase and the typical company benefits will increasingly
disappear. The innovation offering will increasingly shift from IT
users to providers through cloud-based solutions. This can be
illustrated using the example of online commerce. Not only in
Europe could an increase in online trade be observed for years.
In the meantime, approx. 10% of the total trading volume would
be handled online. Of the total online trade, approx. 45% is
again attributable to the Amazon marketplace. Further
significant market shares are shared by the other large online
marketplaces such as ebay and Alibaba.

From this, it is also possible to estimate how small the online

sales of all other market participants with their own online shops
are. Companies that want to sell their goods online have no
choice but to use the large marketplaces. This results in a far-
reaching standardization of product placement, product
presentation, ordering, delivery, and services. The large
marketplaces dictate the conditions to companies. There
are virtually no alternatives in online business, and innovative
ideas of one's own would have little chance of success because
they hardly reach the customers on the net.

According to the advocates of the strategic importance,

information is the oil of the 21st century. With the internet,
almost everyone has access to more and more information. As a
result, people and companies should be better and more
objectively informed than ever before. But is that so? Indeed,
according to opponents of the strategic importance, human
information intake is highly selective; filtered by motives,
existing knowledge, and the communication channels. That is
why we all have a selective intake of information, which leads us
to give preference to information that corresponds to our
opinions and to discard other information.
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If we now consider that approximately 2 million people on
Facebook are provided with information by means of algorithms
in such a way that they correspond to their areas of interest and
opinions, it becomes clear that this cannot lead to more
objective information processing and better decisions in
companies.

With the term Industry 4.0, the advocates of digitalization

promise nothing less than the complete decentralization and
networking of supply chain processes. And the big companies are
rushing into the subject. Wallmart has asked its suppliers to
equip their goods with RFID in order to optimize inventory
management along the supply chain. According to the advocates
of the strategic importance of digitalization, this will give
Wallmart a strategic advantage.

In fact, opponents say, Wallmart's market dominance will enable

it to convince its suppliers to replace existing barcodes with
RFID in the medium term. This will enable Wallmart to further
optimize its costs and supply chain processes. However, the
benefits generated in this way are rather marginal compared to
other production factors such as the store network, volume and
purchasing advantages, brand awareness, etc. This means: Yes,
you can generate efficiency advantages in the supply chain with
technology. No, these are not revolutionary and cannot be
defended in the long term – the competition will soon follow
suit.

Nevertheless, according to the proponents, digitalization is

strategically important in order to remain competitive. If all
other companies are optimizing their efficiency through
automation and data availability, the other companies must do
the same, otherwise they will lose out.
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According to the opponents, many companies have long since
done this "homework" through the costly introduction of ERP and
SCM solutions. Future efficiency gains through IT are therefore
likely to be lower. At the same time, increasing digitalization has
also led to an ever greater dependence on IT. In times of
growing cyber crime and extensive helplessness of politics,
police, justice, and the companies themselves, a risk that should
not be underestimated has emerged. The more digitalization, the
greater the dependence on IT and the greater the potential
damage of a cyber attack. Therefore, one can only conclude: Yes
– IT investments are a competitive factor – but many companies
have already done the essential homework. Future investments
in IT would therefore have to be examined all the more carefully
if SMEs do not want to burn the available capital pointlessly.

The last argument of the proponents concerns the thesis that the
digital revolution will far outdo previous industrial revolutions,
such as the steam engine or electricity, in its importance and
effect. The opponents counter and say that they would rather do
without the internet than electricity.

Figure 4: Overview discussion on the

strategic importance of digitalization
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SUMMARY
In summary, the following can be stated: In the opinion of many
experts we are at the tipping point of digitalization. The
previously linear course of digitalization could now develop
exponentially. The reason for this is the merging of different
technologies, such as the Internet of Things, artificial
intelligence, big data, robotics, 3D printing, and the cloud.

This creates a fine-meshed nervous system of total networking of

production, energy, household, entertainment, medicine,
mobility, etc. Machines can now learn from other machines, they
can recognize patterns and pass on knowledge because
networking, computing power and software solutions make this
possible. This results in a high innovation potential for new
business models, products, services, and processes.

SMEs in Switzerland are still not making enough use of these

opportunities. The reasons for this are complex. There is a lack
of knowledge, a lack of organizational framework conditions, a
lack of willingness to change, but also a lack of conviction that
the topic is actually of strategic importance. In addition, many
SMEs have already invested massively in IT in recent years.
Digitalization is therefore perhaps not a disruptive
transformation process at all, but rather an evolutionary process.
But evolution also means innovation, and it is often only
afterwards that we know what has become established and why.
This book is therefore intended to encourage readers to take a
close look at the topic of digitalization and innovation, to learn
from other companies, and to try out new things, using
real case studies.

The possibilities of digital "key" technologies are presented in a

particularly impressive way in the case study Dorma Kaba. Here,
digital services will be used to create new customer- or industry-
specific business models in the field of access management, e.g.
for the hotel or fitness studio industry.
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In the case studies of FC Bayern Munich and Villeroy and Boch,
the digital solutions are primarily intended to facilitate further
internationalization, satisfy the changed purchasing behavior of
customers, and create new revenue models. The underwear
manufacturer Zimmerli also uses the digital communication
channels for internationalization, to open up new customer
segments such as the "millenials" and to modernize its brand
image. The Saloodo! marketplace solution addresses in particular
the transparency problems, but also the process inefficiencies of
the transport industry through digital solutions. The same
applies to Sobrano's marketplace solution, which is expected to
improve the process efficiency of insurance brokers by up to
90%. The case study on digital patient allocation, in turn, is
intended to show how the gap left by the introduction of the
digital patient file can be closed for physicians in private
practice. At Züricher Kantonalbank, digital solutions are
successfully used in customer advisory services and digital and
human services are combined to meet customer needs. Another
example from the financial industry shows how Alibaba and
Alipay are improving lending to private and business customers
by providing a wide range of data on customer behavior through
a digital process: The application can be filled out in just three
minutes, and within another minute the decision is made – and
without any human intervention. Walter Meier AG creates
customer benefits through digital monitoring of heating systems.
Many problems can be solved remotely or with a first-time-right
repair service. Even completely new technologies are already
being used. The case study of Modum shows how SMEs can
gain access to the blockchain. In the case study of virtual and
mixed reality it is again impressively demonstrated how premium
and luxury goods manufacturers can and must differentiate
themselves in the digital world.
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Methodological notes on the implementation of digitalization
initiatives are also included in the case studies. In addition to
the Digital Capability Framework (e.g. FC Bayern, Villeroy&Boch),
the Contovista case study shows how the start-up was able to
become the market leader for personal finance management
solutions in Switzerland through agile methods such as Build,
Measure, Learn. In addition, there are case studies on agile
strategy development in Retailtec or Holacracy management
models, which largely dispense with hierarchies.   

The case study "Bring your own device" is again a very good
example of how digital change projects can be successfully
implemented even in hierarchically managed organizations such
as a hospital. Increasing digitalization also presents new
challenges for employees and requires additional skills and rules
for dealing with the diverse media. The Evernote case study
explains how to deal constructively with the digital workplace in
an international context.

Finally, the article "Agile higher education for an agile working

world" shows that universities in particular play an important
role in the training of workers, which is much less oriented
towards long-term learning goals and content than towards the
current, rapidly changing requirements of the economy.

We hope that you enjoy reading this book and that you will find
helpful hints, models, and examples for your working
environment and your company to help you succeed in the digital
transformation.
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