Industry 4.0: How to tackle it?
What challenges do trustees have to face in the course of Industry 4.0? In the following article for TREX, author Alessia Baumann explores this question and uses a practical example to show how the analysis of the digital maturity level can form the basis for further digitization 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. Through the existence of the Institute Fiduciary 4.0, founded by TREUHAND|SUISSE, the Swiss Association of Fiduciaries, one recognizes the essentiality of Industry 4.0 in the fiduciary sector.
Fiduciary 4.0 is not just a vision of the future, but a daily reality for many Swiss fiduciaries. 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 the digital transformation and user behavior is inevitably changing. 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The big challenges are the ongoing adjustments to laws and regulations, outdated and high-maintenance systems, and digital interactions / transactions with customers. Especially in the latter area, requirements are increasing rapidly. Examples of this are the connection to the electronic billing platforms of public 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 consulting. Below are some questions that arise as central digitization issues for fiduciaries:
- What impact do frequent legislative and regulatory changes have on your systems?
- Can you comply with all data governance and privacy policies?
- Can you guarantee secure system access for your employees and your customers?
- Are your processes digital throughout?
- How can you improve data sharing?
- What are the requirements of your most demanding customers?
- 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 digitization?
It is important that, in addition to the challenges of digitization, the focus or perspective on the core business of trusteeship is never lost – a combination of both topics must emerge.
Fiduciary 4.0 – How to tackle it?
Digitization, digital transformation, Fiduciary 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 digitization. Too many options, tools and complex buzzwords revolve around the topic of digitization, making it difficult for many companies to maintain an overview, let alone become expertly versed in all these topics and select the right one. Especially for small, owner-managed companies without their own IT department, this opens up major challenges. Due to the aforementioned complexity, wrong decisions are made and high follow-up costs are incurred. The approach is crucial to the success or failure of digitization projects.
The approach is crucial to the success or failure of digitization projects.
Industry 4.0 is not an illusion, but already a reality for many trustees. Digitization opens up new opportunities and approaches to drive your own business forward and develop more efficient ways of working. Digitalization means one thing above all: a huge opportunity for this industry to distinguish itself with state-of-the-art service offerings. Finally, the cooperation between trustee and client is characterized to a high degree by data and information exchange with many routine administrative processes. Such business processes can be simplified, standardized and automated thanks to digitization. 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 digitization and how he can network better with the customer, in other words: drive digitization from the inside out. Internal processes should be digital and should also be exemplified digitally. In this way, a digital DNA is established in the company step by step. In this way, a digital DNA is established in the company step by step.
The right approach to digitization
As part of a study by the University of Applied Sciences Northwestern Switzerland (FHNW) on the current state of digital transformation in Switzerland, Marc K. Peter defined seven fields of action that form the basis of a company’s digital transformation. “Activities, processes and actions that can be defined, implemented and applied in a sub-aspect (or sub-project) of the digital transformation of companies are summarized under a field of action.” They are intended to form the digital framework in the form of a site assessment.
The seven fields of action are shown below.
Field of action 1: Constant customer orientation in Industry 4.0
This field of action focuses on customer experience issues, communication and interaction with customers, and customer loyalty. It is a matter of recognizing, for example, whether you know what your customers’ purchase intentions are or how customer data and information are recorded. “Putting the customer at the center” sounds banal, but it’s not always easy. Many customers want an all-round carefree package and a partner at eye level. This can become a real challenge due to ever-changing trends and requirements in the context of digitalization.
This is both a blessing and a curse: on the one hand, companies will be able to optimize their services and expand their offering to meet needs; on the other hand, the question of “how” and “what exactly” will then arise. Digitalization requires continuous optimization and further development on countless channels. One possible solution: automation. The idea behind this is that employees can spend more time on the needs of customers if standardized processes are automated. This means that each customer can be looked after on a more individual basis. This is achievable through the implementation of a CRM solution. All customer data can thus be recorded in digital systems and is accessible to every employee, regardless of time and location. Interactions become easier and inputs from customers can be analyzed and included.
All these measures are aimed at customer loyalty in the long term. In an age where fast-moving is high on the agenda, long-term partnerships with customers are a rare commodity that must be nurtured.
Field of action 2: Cloud and smart data
Data is the fuel for the digitization engine. The goal: to create added value for the company through data. Business processes are to be optimized and new business models established – based on data evaluation within the company.
Digitized processes simplify the collection and analysis of data. Conversely, this means that companies that already derive added value from existing data are currently further advanced in the digital transformation process. Based on the analysis of the data, decisions can be made faster and more efficiently. Also to be emphasized is the competitive advantage provided by the data obtained. Through the targeted analysis of data, preferences, customer behavior, purchasing patterns and reactions, products and services can be further developed in a targeted and customer-oriented manner.
Another advantage of the obtained and analyzed data is the visualization. This can be used for customer solutions and possible options can be identified as a result. This leads to an easier decision-making process for customers and for the company itself. The solution is the “one size fits all” approach with Microsoft Power BI; redIT as an implementation partner has developed the Power BI toolbox for trustees for this purpose. With a flexible data model, Power BI offers the ability to create a cost-effective template for all clients. With a flexible data model, Power BI offers the ability to create a cost-effective template for all clients. Additional key figures can be easily integrated. The report views can be customized. Client-specific colors (CI) can be quickly exchanged using existing templates. Graphs and charts can be tailored to the needs of clients at any time. The reports can be used on the free Power BI desktop as well as 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 the 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 fast availability. Cloud solutions are also used for backing up data, exchanging information with customers or suppliers, and for analysis purposes. Centralized 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 form the basis for optimizing process flows, customer loyalty as well as strategy development.
Field 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 impact on the infrastructure, the organization, the culture of a company and the skills of its employees.
New technologies increase competitiveness and the company is interesting as a partner as well as an employer. When implementing new technologies, employees should be picked up and their digital skills built up or expanded.
The significant role in this field of action is played by networking. This is made possible by the technology. People, data and processes are connected in a new way to create added value. On the one hand, this reduces the workload for employees, while on the other it improves the quality of products and increases the reliability of processes within the value chain. Likewise, the networking of information enables a new type of collaboration. It is possible to work independent of time and location, access to all data is possible from anywhere. This thus opens up collaboration in interdisciplinary teams.
Technology is enabling new forms of communication and collaboration. 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 workflows.
Field of action 4: Digital marketing
Do you know the behaviour of your customers? The marketing strategy should adapt to the continuous changes in customer behaviour. And the keyword is “needs-driven” because customer-focused online platforms, communication through social media and much more is required these days. The goal of the marketing strategy should be to be different, and thus move away from traditional marketing measures to digital marketing. Online, networked and contemporary should be the marketing of the companies. This requires an adjustment of the marketing strategy, because technical developments influence the buying behavior of customers. Retail is shifting to a large extent to digital marketplaces, where customers inform themselves online and then purchase the products, mostly online as well.
The advantages of online platforms lie in increasing the efficiency of the sales process, specifically in saving time as well as in 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 for customer loyalty, communication as well as market expansion, among other things. Social media are used for external as well as internal communication. Externally, customers are to be served and internally, interaction among employees is to be facilitated. Social media will also be used to attract new customers and employees.
Social media will also be used to attract new customers and employees. This helps SMEs gain more visibility in the market. Nevertheless, it is important to note that there are still target groups that are not digitally oriented, so a multi-channel approach is required, i.e. a combination of analog and online marketing methods.
The trustee today often lives by word-of-mouth. An appealing web presence is therefore not so important to him. However, customers are getting younger and increasingly informing themselves via social media. It is therefore worthwhile to revise the marketing strategy in good time in order to secure a healthy customer base.
Field of action 5: Automated processes
Do you still print out your documents to sign or sign them, only to scan them back in? The aim of this area of action is not only to reduce printing costs, but above all to switch from analog to digital processes and automate repetitive workflows. This saves valuable staff time as well as some space resources.
The big buzzword is therefore automation. The manual processes are to be converted with the help of digital processes – an essential part of Industry 4.0. Technologies can be used to automate internal and external work processes – again with the goal of optimized, more efficient processes, reduced error rates, and easier access to information. Especially for repetitive operations, processes can be standardized and automated workflows can lead to lower personnel expenses and lower error rates. Examples of this are the accounts payable workflow or a digital inbox.
The conversion from analog to digital processes means that the physical filing of documents is replaced by electronic filing. The central advantage is the considerable reduction of internal, administrative effort, which is accompanied by large time savings due to the one-time recording of data, which is then stored centrally and can be easily retrieved 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 independence of data access in terms of time and location. As a result, new forms of work are emerging, such as home offices, online meetings and teamwork. It also creates increased transparency because employees can access all the information they are authorized to at any time. This can also reduce dependency on individual employees, as the information is retained even after they leave the company.
Field of action 6: Leadership and culture
The time is ripe for new approaches. The implementation of new technologies and strategies as part of the digital transformation entails major changes for employees. New approaches to leadership, collaboration, and ways of working are needed. The company must develop a new culture, managers act as role models and the employee is placed at the center. This is because new technologies have an impact on the infrastructure, applications, tools and skills of employees. This causes an enormous change. It is therefore crucial how the company deals with this change.
In terms of process change, this means that existing tasks are replaced by automation or eliminated altogether. But new tasks are also emerging, which changes the demands on employees. But new tasks are also emerging, which changes the demands on employees.
In terms of corporate culture, it is predominantly the organizational structure that is changing, and collaboration is becoming different: people, technology and processes are merging. Employees must be introduced to the new digital working world. What is important here is the willingness of the employee 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 in favor of digital transformation must be lived and exemplified.
Leaders must communicate visions, individually support employees and transparently communicate the common path to achieving goals. These attributes define digital leadership. This includes raising awareness among employees; you have to be able to inspire them to embrace change. It is important to address fears and eliminate them by highlighting the opportunities offered by digitization.
Field of action 7: Digital strategies
One of the goals of digitalisation is to use it as an innovative force for new business models. Opportunities arise to differentiate oneself in the market. Be it through a new technology, a new offering or even the development of a new business area.
In the “Digital Business Development” field of action, one of the driving forces is corporate innovation. They allow business potential to be better developed and, as a result, market share to be increased. The technology itself serves as the basis for this. Digitization enables companies to develop new services such as apps or smart services.
The new, digitized business models must be mapped in a digital strategy. The holistic approach leads to the fact that all potentials can be developed and exhausted. To achieve this, the entire corporate structure and culture must be analyzed and repositioned in all functions, areas and processes, both internally and externally.
Digitization or digital transformation pursues the overriding goal of acting in an agile and customer-oriented manner, achieving optimal value creation, and differentiated positioning on the market. The company’s management must not delegate the digital transformation, but must deal with it directly itself and at every meeting.
The conclusion is clear: digitization is a change process, and change begins in the mind. If the company is not ready for change, the first step is to create the right change culture. And if this is successful, then nothing stands in the way of a successful, step-by-step implementation.
Within the framework of the seven fields of action, it is important to set an “anchor,” for example, to place the customer at the center. What sounds banal is actually very helpful, especially when it comes to focusing individual digitization projects. Because this not only allows the digitization strategy to be mapped, but – even more importantly – communicated internally and externally. The analysis of the seven fields of action and the associated initial digital site assessment is important because it develops a common understanding of the status of digitization, the objectives, and the weak points. At the same time, it is possible to determine which steps should be implemented first.
A site survey as an essential basis for Industry 4.0
A digital maturity level, i.e., an assessment of the current status in the seven fields of action, shows the possible weaknesses and the resulting potential.
The analysis of the digital maturity level is a good opportunity to have a fiduciary company’s own assessment reviewed from a different, professional point of view, so that it can subsequently 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 lever of digitization can be applied.
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