According to a recent study, the majority of large German companies do not yet consider themselves well prepared for digital transformation. Germany's position as a digital hub also does not fare well among the respondents.
Even the big players seem to have a lot of catching up to do when it comes to digitalization: Every second large company in Germany expects digitalization to have a significant impact on their own industry—but only 42 percent consider themselves well prepared. Fifty-five percent expect to have to digitize their existing business models, and a good quarter want to develop new, genuinely digital business models. These figures come from a survey conducted by GfK among 2,000 companies with annual revenues of more than €250 million, commissioned by the consulting firm Etventure.
Despite the lack of preparation, the companies surveyed are apparently far from experiencing digital panic: every second company expects the effects of digitalization to be felt in three years at the earliest, and 59 percent do not expect any loss of sales until then, even if they do nothing now.
Etventure, the study's client, which advises companies on digital transformation and develops startups, naturally views this with skepticism. Founder and Managing Director Philipp Depiereux says:
"Those who focus solely on their existing business or even just optimize their IT are jeopardizing their own economic future and jobs. It's about developing new digital business models that meet both technological change and evolving customer needs."
Hardly any fear of tech companies and startups
Another result may indicate a misjudgment by established companies: Only 7 percent take startups seriously as competitors, while 22 percent fear competition from tech giants like Google or Amazon. Depiereux points to earlier examples like Netflix, Uber, and Airbnb, which revolutionized entire industries within a relatively short period of time, and predicts:
"What the B2C sector has primarily experienced so far also threatens other, traditional industries. Traditional B2B companies must adopt the digital players' recipes for success—speed, data expertise, and customer-centric methodology—if they don't want to be gradually pushed out of the market and lose their interface with the customer."
External digital unit provides protected space
At least the topic of digitalization has apparently reached the executive suites: In two-thirds of all surveyed companies, the CEO or another member of the board is directly managing its implementation. One in seven companies employs a Chief Digital Officer (CDO). Eight percent of companies maintain an external digital unit. Depiereux says:
"To circumvent the forces of preservation within the company, we recommend establishing a digital unit outside the core organization. There, innovation and digital projects can be developed independently of corporate bureaucracy, compliance concerns, legal issues, and similar obstacles. In this 'protected space,' a new approach—moving away from engineer-driven development toward a rapid and radically user-centric approach—can then be consistently pursued."
Grade 3- for Germany as a digital business location
Respondents are critical of Germany's status as a digital location, giving it an average grade of 3.3. Only one in five companies gives it a grade of 1 or 2, a quarter gives it a grade of 4, and 13 percent even a grade of 5. The companies surveyed see a significant need for improvement, particularly in broadband expansion, digital school education, the digitization of public administration, and the promotion and development of key digital technologies.
