Industry 4.0: How to approach it?
What challenges do trustees have to face in the wake of Industry 4.0? This is the question the author addresses Alessia Baumann in the following post for the TREX and uses a practical example to show what the analysis of the digital maturity level can look like as a basis for further digitalization steps.
Industry 4.0 is referred to as the fourth industrial revolution. Big data, machine learning, artificial intelligence and the Internet of Things are among the biggest challenges of digitalization. The existence of the Treuhand 4.0 institute, which was founded by TREUHAND|SUISSE, the Swiss trustee association, recognizes the importance of Industry 4.0 in the trust industry.
Treuhand 4.0 is not just a vision of the future, but a daily reality for many Swiss trustees. The combination of cloud, mobile, social media and big data enables completely new approaches and solutions. The trustee is increasingly becoming an SME coach, as not only his own company but also his customers are subject to digital change and user behavior inevitably changes. But what does this mean in concrete terms and what challenges do they have to overcome?
Challenges for trustees in the area of Industry 4.0
The major challenges of Industry 4.0 are the ongoing adjustments to laws and regulations, outdated and maintenance-intensive systems, and digital interactions/transactions with customers. Requirements are increasing rapidly, especially in the latter area. Examples of this include the connection to the electronic billing platforms of authorities, the exchange of electronic documents, the processing of banking transactions via e-banking or secure system access for employees (keyword: “home office”) and customers. At the same time, customers increasingly expect holistic management advice. Below are some questions that arise as central digitalization questions for trustees:
- What impact do the frequent changes in laws and regulations have on your systems?
- Can you comply with all data governance and privacy policies?
- Can you guarantee your employees and customers secure system access?
- Are your processes completely digital?
- How can you improve data sharing?
- What requirements do your most demanding customers have?
- Are the documents archived in a legally secure manner?
- Are your customers satisfied with the reporting?
- Can you coach your customers into the future?
- How do you attract skilled workers for digitalization?
It is important that, in addition to the challenges of digitalization, the focus or perspective on the core fiduciary business is never lost - a combination of both topics must be created.
Treuhand 4.0 – How to approach it?
Digitalization, digital transformation, Treuhand 4.0, workplace 4.0, Justice 4.0, big data, cloud solutions – too much for a large number of companies. It's difficult to figure out where to even start with digitalization. There are too many options, tools and complex keywords surrounding the topic of digitalization, which makes it difficult for many companies to keep track, let alone to be competent in all of these topics and to choose the right one. This presents major challenges, especially for small, owner-managed companies without their own IT department. Due to the complexity mentioned, wrong decisions are made and high follow-up costs arise. The approach is crucial for the success or failure of digitalization projects.
Digitalization among trustees
Industry 4.0 is not an illusion, but is already a reality for many trustees. Digitalization opens up new opportunities and approaches to advance your own business and develop more efficient ways of working. Digitalization means one thing above all: a huge opportunity for this industry to make a name for itself with state-of-the-art service offerings. Ultimately, the collaboration between trustee and customer is characterized to a high degree by the exchange of data and information with many routine administrative processes. Such business processes can be simplified, standardized and automated thanks to digitalization. This allows the fiduciary to directly access their clients' accounting data and support them in real time, which means positive economies of scale even with a small number of clients. The trustee must therefore ask himself which business processes he can make more efficient with the help of digitalization and how he can better network with the customer, i.e.: drive digitalization from the inside out. Internal processes should be digital and also be demonstrated digitally. As a result, a digital DNA is established step by step in the company. The aim should be for employees to contribute actively and innovatively to the digital strategy.
The right approach to digitalization
As part of a study by the University of Applied Sciences Northwestern Switzerland (FHNW) on the current status of digital transformation in Switzerland, Marc K. Peter defined seven fields of action that form the basis of a company's digital transformation. “A field of action summarizes activities, processes and actions that can be defined, implemented and applied in a sub-aspect (or sub-project) of the digital transformation of companies.” They are intended to form the digital framework in the form of a location determination.
The seven fields of action are shown below.
Area of action 1: Constant customer orientation in Industry 4.0
This field of action focuses on customer experience, communication and interaction with customers and customer loyalty. It's about recognizing whether you know, for example, what purchasing intentions your customers have or how customer data and information is recorded. “Putting the customer at the center” sounds banal, but it’s not always easy. Many customers want an all-round, worry-free package and a partner at eye level. This can become a real challenge due to new trends and requirements as part of digitalization.
This means a blessing and a curse at the same time: on the one hand, companies are able to optimize services and expand their offerings in line with their needs, but on the other hand, the question of “how” and “what exactly” arises. Digitalization requires continuous optimization and further development on countless channels. One possible solution: automation. The idea is that employees can spend more time on customer needs if standardized processes are automated. This means that each customer can be looked after more individually. This can be achieved by introducing a CRM solution. All customer data can be recorded in digital systems and is accessible to every employee regardless of time and location. Interactions become easier and customer input can be analyzed and included.
All of these measures are aimed at long-term customer loyalty. In a time where fast pace is the order of the day, long-term partnerships with customers are a rare commodity that must be maintained.
Area of action 2: Cloud and intelligent data
Data is the fuel for the digitalization engine. The goal: to create added value for the company through data. Business processes should be optimized and new business models based on data evaluation within the company should be established.
Digitalized processes make collecting and evaluating data easier. Conversely, this means that companies that already derive added value from existing data are currently further advanced in the digital transformation process. By analyzing the data, decisions can be made faster and more efficiently. The competitive advantage provided by the data obtained should also be emphasized. Through the targeted analysis of data, preferences, customer behavior, purchasing behavior and reactions, products and services can be further developed in a targeted and customer-oriented manner.
Another advantage of the data obtained and analyzed is visualization. This can be used for customer solutions and possible options can be shown. This leads to an easier decision-making process for customers and for the company itself. The “one size fits all” approach with Microsoft Power BI is a suitable solution; redIT as an implementation partner has the Power BI construction kit for trustees developed. With a flexible data model, Power BI offers the opportunity to create a cost-effective template for all clients. With simple clicks, client-specific parameters can be adjusted, such as the fiscal year (calendar/fiscal year), sales figures, etc. The most important key figures are programmed once thanks to dynamic formulas and applied across clients. Additional key figures can be easily integrated. The report views can be individually designed. Client-specific colors (CI) can be quickly exchanged using existing templates. Graphics and diagrams can be tailored to the needs of clients at any time. The reports can be used both on the free Power BI desktop and on the cloud-based Power BI service platform.
Shared platforms are also an essential component within this field of action. These are used for data exchange, knowledge transfer and central management of information. To do this, most SMEs need cloud solutions and document management systems (DMS) to process and archive data and documents. The central advantage here is the possibility of location- and time-independent and up-to-date access to customer or company data as well as quick availability. Cloud solutions are also used for backing up data, exchanging information with customers or suppliers and for analysis purposes. The central storage makes the flood of data manageable and thus enables more efficient work.
The bottom line is that awareness must be created that the collected and evaluated data forms the basis for optimizing processes, customer loyalty and strategy development.
Area of action 3: New technologies
Apps, cloud, artificial intelligence, Internet of Things (IoT), 3D printers, etc. ... the digital possibilities of Industry 4.0 are great. The goal of using new technologies is more efficient business processes, reduction of production or operating costs and, last but not least, networking. New technologies lay the foundation for the further development of the existing business model. This has a major influence on the infrastructure, organization, culture of a company and the skills of its employees.
New technologies increase competitiveness and the company is interesting as a partner and as an employer. When implementing new technologies, employees should be involved and their digital skills should be developed or expanded.
Networking plays an important role in this field of action. This is made possible by technology. People, data and processes are connected in new ways to create added value. On the one hand, this reduces the workload for employees and, on the other hand, improves the quality of the products and increases the reliability of the processes within the value chain. The networking of information also enables a new type of collaboration. Work can be done regardless of time and location; all data can be accessed from anywhere. This opens up collaboration in interdisciplinary teams.
Technology makes new forms of communication and collaboration possible. Internally, the new electronic communication channels, such as Microsoft Teams as part of Microsoft 365, lead to a simplified platform for collaboration between employees and to completely new work processes.
Area of action 4: Digital marketing
Do you know your customers’ behavior? The marketing strategy should adapt to the continuous changes in customer behavior. The key word is “needs-oriented”, because customer-oriented online platforms, communication through social media and much more are required these days. The goal of the marketing strategy should be to be different and thus move away from traditional marketing measures towards digital marketing. Companies’ marketing should be online, networked and contemporary. This requires an adjustment of the marketing strategy, because technical developments influence customer purchasing behavior. Trade is largely shifting to digital marketplaces, where customers obtain information online and then purchase the products, usually also online.
The advantages of online platforms lie in increasing the efficiency of the sales process, specifically in saving time and collecting data about the customer. The company can evaluate the data and better adapt to the needs of its customers.
Another central component of the field of action is social media. They serve to better position the products on the market, increase the company's presence and facilitate access to specific target groups. Social media is used by companies, among other things, for customer loyalty, communication and market expansion. Social media is used for external and internal communication. Customers should be served externally and interaction between employees should be made easier internally. Social media is also intended to attract new customers and employees.
A good website is essential in the age of digitalization, primarily in order to remain competitive. This helps SMEs gain more visibility on the market. Nevertheless, it should be noted that there are still target groups that are not digitally oriented, which is why a multi-channel approach is required, i.e. a combination of analog and online marketing methods.
Today, the trustee often lives from word of mouth. An attractive website is therefore not that important to him. But customers are getting younger and are increasingly getting information via social media. It is therefore worth revising your marketing strategy in good time to ensure a healthy customer base.
Area of action 5: Automated processes
Are you still printing out your documents to sign or sign and then scan them back? The goal of this field of action not only includes reducing printing costs, but above all the conversion from analog to digital processes and the automation of repetitive work processes. This saves employees' valuable working time and a lot of space resources.
The big catchphrase is: Automation. The manual processes should be converted using digital processes - an essential part of Industry 4.0. Technologies can be used to automate internal and external work processes - again with the aim of optimized, more efficient processes, reduced error rates and easier access to information. Especially for repetitive processes, processes can be standardized and automated workflows can lead to lower personnel costs and a lower error rate. Examples of this are the accounts payable workflow or a digital inbox.
The switch from analogue to digital processes means that the physical storage of documents is replaced by electronic storage. The central advantage is the significant reduction in internal, administrative effort, resulting in significant time savings through the one-time collection of data, which is then stored centrally and can be easily accessed at any time. Electronic filing reduces the amount of paper and saves a lot of time and space for physical filing. The switch from analog to digital also requires the expansion of the digital infrastructure and the filing system. The use of a document management system or a cloud solution is suitable for implementation
Another advantage of digital storage is the time and location independence of data access. This creates new forms of work such as home offices, online meetings or forms of team work. There is also increased transparency because employees can have access to all information for which they are authorized at any time. This can also reduce the dependency on individual employees because the information is retained even after they leave the company.
Area of action 6: Leadership and culture
The time is ripe for new approaches. The implementation of new technologies and strategies as part of digital transformation brings with it major changes for employees. New approaches to leadership, collaboration and working methods are required. The company must develop a new culture, managers act as role models and the employee is placed at the center. Because new technologies have an impact on the infrastructure, applications, tools and skills of employees. This causes enormous change. How the company deals with this change is therefore crucial.
When it comes to changing processes, this means that existing tasks are replaced by automation or eliminated entirely. But new tasks also arise, which changes the demands on employees. Therefore, the digital transformation process must be accompanied and promoted with the help of a change management strategy.
The main thing that changes in corporate culture is the organizational structure and collaboration becomes different: people, technology and processes merge. Employees must be introduced to the new digital working world. What is important is the employee's willingness to acquire new skills so as not to get lost in the process of digital transformation. A corporate culture that is open to new technologies and supports digital change must be lived and exemplified.
Managers must convey visions, support individual employees and transparently communicate the common path to achieving goals. These attributes make up digital leadership. This includes raising awareness among employees; you have to be able to get them excited about change. It is important to address fears and eliminate them by pointing out the opportunities offered by digitalization.
Area of action 7: Digital strategies
One of the goals of digitalization is to use it as an innovative force for new business models. There are opportunities to differentiate yourself in the market. Be it through a new technology, a new offer or even through the development of a new business area.
In the “Digital Business Development” field of action, one of the driving forces is company innovation. Through them, business potential can be better expanded and, as a result, market share can be increased. The technology itself serves as the basis for this. Digitalization makes it possible for companies to develop new services such as apps or smart services.
The new, digitized business models must be reflected in a digital strategy. The holistic approach means that all potential can be tapped and exploited. To do this, the entire corporate structure and culture must be analyzed and reorganized in all functions, areas and processes, internally and externally.
Digitalization or digital transformation pursues the overarching goal of acting in an agile and customer-oriented manner, achieving optimal value creation and differentiated placement on the market. Company management must not delegate digital transformation, but must deal with it directly at every meeting.
The conclusion is clear: digitalization is a process of change, and change begins in the mind. If the company is not ready for change, the right change culture must first be created. And if this succeeds, then nothing stands in the way of successful, step-by-step implementation.
Within the seven fields of action, it is important to set an “anchor”, for example to put the customer at the center. What sounds banal is actually very helpful, especially when focusing on individual digitization projects. This not only allows the digitalization strategy to be mapped, but – more importantly – communicated internally and externally. The analysis of the seven fields of action and the associated initial digital assessment is important because it develops a common understanding of the status of digitalization, the objectives and the weak points. At the same time, it can be determined which steps should be implemented first.
A position determination as an essential basis for Industry 4.0
A digital maturity level, ie a determination of the current status in the seven fields of action, shows the possible weak points and the resulting potential.
Analyzing the digital maturity level is a good opportunity to have your own assessment of a trust company checked from a different, professional perspective in order to then be able to take the right further steps and minimize the risk of bad investments. The evaluation and the resulting recommendations for action can show in great detail where the leverage of digitalization can be applied.
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