Digital technologies (smartphones and apps as examples or maybe in factory-like curtain makers) have become an indispensable part of everyday life: But what advantages and disadvantages of digitization do entrepreneurs actually have to have on the screen? To what extent can digital opportunities be used to place a sustainably profitable business model on the market? Which dangers of digitization are relevant for the self-employed? This article provides a compact overview.
Since when has digitization been around?
It is not easy or not very expedient to want to commit to a specific date. Ultimately, it is a process that has accelerated rapidly in recent years. Many experts see the invention of the microchip as the beginning of digitization. Suddenly, enormous amounts of data could be processed quickly. In this respect, Moore’s Law provides that the usable computing power is doubled for approx. One to two years. Who can still remember PCs today that was equipped with a meager 128 megabytes of RAM?
What does digitization mean for founders?
Anyone looking for an answer to the question of what digitization means for founders must first find out which part of digitization is meant here. On the one hand, digitization can describe the conversion of data and, on the other hand, it can also describe an age in which analog and manual working methods are increasingly being displaced. This article is intended to provide information about the opportunities and risks of digitization for founders.
How is digitization noticeable?
Before it comes to the advantages and disadvantages of digitization, we should take a brief look at the effects in the private sector as well as in the world of work. Both areas have a direct impact on founders: In this way, digitization can be in focus as added value for the targeted target group and make your own operational processes significantly more efficient and thus cost-saving.
Digitization has revolutionized shopping habits
Online trade (e-commerce) has been booming for years. More and more customers are buying online, with the vast majority using the Internet anyway to make a purchase decision or to secure it with additional information. In this respect, even a small start-up can no longer afford to forego the growth opportunities offered by digitization. These have to be created in the business plan and used consistently in the operational business.
These are the advantages of digitization
- Newly founded companies are bursting with energy and flexibility. The developments of digitization take exactly this entrepreneurship into account. An example: The technical support – for example for the graphic development of the corporate design – no longer has to sit in the same office or work in the same city. Documents can be exchanged quickly via the data highway. Videotelephony helps if there is a need to talk.
- If you want to build up a regional business, you need local news in order to know the market situation. This industry news can be searched for using smartphones and tablets. Or even better: Those who subscribe to thematically relevant newsletters will receive the most important information directly in digital form.
- Those who once invested a lot of money in international telephone calls now rely on Internet telephony and the time spent on the Internet is conveniently debited via the flat rate. Ultimately, this also makes the day-to-day running of the founders more predictable – and cheaper at some points.
These are the disadvantages of digitization
- Hiring a freelancer to take care of data protection and data security is certainly a good approach. However, you cannot protect yourself against shitstorms, cyberbullying, and other Internet dangers.
- The chances of many internet-based channels are contrasted above all with the risks of the internet. Anyone who is too open-hearted with their own data runs the risk of being robbed of them. Determining security measures and using them in a targeted manner is more important than ever today.
- Cyber risks cannot be dismissed through targeted attacks, after all, some prominent examples have become known over and over again in recent years. So you need a certain competence and targeted protective measures to consistently protect your own company or network from virtual threats. At this point, a significant disadvantage of digitization, especially for small companies, becomes apparent: it generates costs. These turn out to be higher, the less internal know-how is available and the more complex the business model is structured in digital terms.