Cloudogu Glossary

Digital Transformation

The term “Digital Transformation” (also known as the “digital transition” or “digitalization”) describes the process of expanding a portfolio of analog products to include digital offerings. This process is initiated as a result of new possibilities and customers’ expectations in the digital age. This can be seen throughout all sectors and areas of our lives:

  • For years now, publishing houses and magazines have been trying to adapt to the new digital reading habits of their readerships and to develop new, viable business models.
  • The Digital Transformation is already well underway in the automotive industry. In the future, digital components and products are likely to become more important than the car itself. Even today, the compatibility of vehicles with mobile ecosystems is already of relevance, as is the effectiveness of a navigation device. In the future, self-driving vehicles will completely revolutionize customers’ needs.
  • Even now, your preferred settings can be applied to your toothbrush via an app, which can also deliver information about how well you are brushing your teeth.
These are but a few examples of how digital services can be used to enhance classic “analog” products in a way that can or could soon change your day-to-day life.

The Digital Transformation is not limited exclusively to products. It also affects distribution channels. The COVID-19 pandemic has clearly shown that digital sales and online shops can be of great importance.

Challenges of the Digital Transformation

The challenge faced by many companies is that, although they manufacture excellent products, they may have little to no experience in the creation and integration of digital offerings. This means that they may have to create an entirely new product line within a very short time.

Opportunities of the Digital Transformation

In order to ensure long-term success, it is important to exploit all of the opportunities that the Digital Transformation presents. At first glance, it is about making sure that a company’s existing products will continue to be attractive and stand out from the competition in future. Moreover, it also involves exploring the potential of entirely new products or business areas. In doing so, it is important to recognize exactly where a company’s own core competencies lie and to strategically highlight them by way of the products or services offered.

One good example of this is the German mail order company OTTO. As early as in the mid-’90s, the company turned to online retail and discontinued its printed catalog from 2018 onwards, as only 3% of customers were still using it. A contrasting example is that of another German mail order company, Quelle, who neglected the online sector for a long time and was forced to declare insolvency in 2009. In the end, OTTO acquired the “Quelle” brand name.

Flexible, efficient and future-proof

When it comes to developing specific products or additional services, it is crucial to keep the customer in mind. It is all too easy to focus on the technology when it comes to the topic of Digital Transformation. However, the technology should only ever be a means to an end in the pursuit of satisfying the customers’ needs. The question that should be asked is not “What can we do with AI (artificial intelligence), IoT (Internet of Things) or AR (augmented reality)?”. Instead, we should ask “How can we use AI, IoT or AR in order to make our products more individual and in line with the needs of our customers? What have we failed to consider so far?”

The fact that many companies would have to build their infrastructure from the ground up for the Digital Transformation is both a blessing and a curse. On the one hand, planning can be done with no consideration to existing systems. On the other hand, the tasks ahead can seem rather overwhelming. This is why it is important to focus on simple, efficient and scalable processes. Furthermore, in many cases, it is not necessary to reinvent the wheel in the process of establishing the underlying infrastructure. Offerings like our Cloudogu EcoSystem make it very simple to establish the professional infrastructure needed for modern software development.

Cloudogu EcoSystem and the Digital Transformation

Platforms like our Cloudogu EcoSystem offer exactly what is needed, including key properties such as future viability, scalability, and efficiency. As they are very easy to operate, they are well-suited for DevOps teams. The Cloudogu EcoSystem offers a carefully designed infrastructure that can easily be adapted to suit the needs of your work and offers great potential for automation.

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