What are the disadvantages of modern communication

Advantages and disadvantages of digitization

Digital technologies (smartphones and apps as examples) have become an integral part of everyday life: But what advantages and disadvantages of digitization do entrepreneurs actually need 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 the beginning of digitization. Suddenly, enormous amounts of data could be processed quickly. The Moore's Law provides in this regard that the usable computing power is doubled for approx. one to two years. Who can still remember PCs today that were 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 and 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 more cost-saving.

In production, digital technologies are primarily associated with increasing automation. The term 'Industry 4.0' has become a very well-known catchphrase in this context. In everyday life, it is above all smart technologies that make digitization and technical progress tangible in the truest sense of the word. In addition to the omnipresent smartphone, one should also think of solutions with a view to that Smart home or the pioneering one Smart driving. A profitable business model can be developed in all of these fields of action with high-selling innovations.

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

  1. Digitization makes everyday life easier. Data are sent at the push of a button. This sometimes also revolutionizes the company's personnel philosophy. Thanks to fast data connections, it is no longer necessary to have all of themEmployee work together in a city and in one place.

    Advantage: Newly founded companies are bursting with energy and flexibility. The developments in 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. Video telephony helps if there is a need to talk.

  2. Digitization enables a rapid flow of data - and offers the possibility of reacting quickly. An example: Of course there are still some who do not want to go without their newspaper at the breakfast table early in the morning. However, there is also a switch to the digital format, the so-called ePaper, in print media.

    Advantage: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.

  3. The digital world comes with great cost savings, because various communication channels and forums enable cost-effective exchange - across continents. In addition, there is a fundamentally very transparent form in terms of pricing. Anyone who compares can save money here.

    Advantage: 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.

  4. The marketing budget can be used much more effectively through digitization. The point is not that it is cheaper to place an advertisement in the social network than in the print edition of the newspaper - it is more about sustainability and controlling. An advertisement played online has a significantly higher frequency of use. In addition, it can be evaluated which user the ad is addressing.

    Advantage: Most founders operate online. Hardly anyone thinks about spending money on an advertisement in the offline world and classic advertising media such as flyers or the like are also on the decline. Founders can also use online marketing because it gives them information about theirtarget group supplies.

  5. Digital media such as e-books, podcasts, blogs, websites and various social media channels make it possible to ensure a very high reach with maximum cost efficiency. With a little luck, a post can become a viral hit through network effects such as likes or shares and appeal to many thousands of potential customers. Digital media are not only always available, they can also be used on many channels at the same time. This also increases the visibility and ultimately the awareness of companies significantly.

  6. Another benefit is that digitization has produced new working time models. Physical presence in the workplace is no longer a criterion for successfully supporting the company. In their (soon) function as boss, entrepreneurs have enough digital solutions at hand to offer employees an appealing work-life balance. This of course also applies to founders themselves!

  7. The opportunities offered by the World Wide Web give business start-ups the opportunity to become to network globally and to set the growth path as broad as possible from the start. Depending on the product and target group, there is nothing to be said against a Internationalization strategy to drive that can be implemented promptly and cost-effectively. Thanks to digital communication technology, meetings with partners on other continents can be held flexibly and promptly. The time and cost of travel will continue to decrease in the future. Thanks to a strong network, founders can bring marketing into the virtual fast lane and offer customers tangible added value for long-term loyalty through excellent services.

  8. In the future it is also to be expected that start-ups unpopular visits to the authorities can be done digitally more and more oftenso that bureaucratic acts should turn out to be less time-consuming and nerve-consuming.

These are the disadvantages of digitization

  1. The first point of contact in times of digitization is the smartphone or tablet. However, this development often destroys personal communication. Replacement strategies must be found here. Demographic change and the peculiarities of some business models can make it necessary that personal exchange should not be neglected in the future. After all, quite a few digital product innovations are in great need of explanation.
    Of course, digital processes initially save a founder time, because communication is also very time-consuming. To withdraw completely, however, is not expedient. Regular (video) conferences with employees or customers are a way of communicating in a controlled manner. Participation in network meetings is also good and important in order to keep up the conversation in the industry.

  2. The chances of many internet-based channels also stand above all elseRisks of the Internet across from. Anyone who is too open-hearted with their own data runs the risk of being robbed of them. Determining security measures and deploying them in a targeted manner is more important than ever today.

    Disadvantage: 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.

  3. 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 creates 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.

In this context the privacy also play a role, especially since it has been tightened significantly in recent years (keyword GDPR). It is also in your own interest to treat data in accordance with the law, which is becoming more and more difficult in view of the many digital pitfalls. Data leaks can become an existential problem, as such incidents have a direct impact on the company's image and perceived trustworthiness. Because that is also part of it: the Internet forgets nothing and news can spread like wildfire.

Everything without paper: dreams of the future or soon reality?

Even if digitization is now well advanced, documents still play an important role in the German bureaucracy. Admittedly, meanwhile More and more services are also being offered online by authorities and the tax return is partly electronic submit. However, paper and documents will also play a role for business start-ups in the years to come. If important documents are to be stored in digital form, maximum security must be considered (for example with regard to modern cloud solutions, which will play a major role for companies now and in the future for the secure handling of large amounts of data).

Conclusion: digitization plays into the cards of many founders

This comparison of the advantages and disadvantages of digitization shows that the advantages clearly outweigh the disadvantages. Overall, it becomes clear that digitization plays into the cards of many founders' working methods. It appliesTo take a holistic view of opportunities and risks and to have all relevant aspects with a view to the peculiarities of the business model on the screen. In view of the changing procurement of information and increasingly virtual shopping behavior, no business start-up will be able to do without it by 2020 at the latest, to integrate digital growth strategies into the business idea.

Flexibility and mobilitybecoming more and more important. If not saved, costs are at least reallocated: lower costs for infrastructure (office, warehouse, etc.) are offset by higher costs for equipment and security. Experts advise not to completely forget the analog world, because in the event of a total failure it can be quite helpful to be able to work without digital aids.

Outlook: what will digitization bring in the future?

As early as 2015, the Federal Employment Agency predicted in a study that 15% of jobs could be lost as a result of digitization. Thus are in the coming years enormous leaps in productivity expected. On the other hand, there are still approx. 30% of all companies claim that they have not yet adequately dealt with new digital technologies. The spread of digital technologies in the private sector is advancing in terms of energy management and entertainment, as is mobile Internet use, which will set the tone in a few years. Thanks to lower production costs and the more efficient consideration of customer requirements, entrepreneurs with digital growth strategies have the opportunity to focus on sustainable success right from the start.

Summary at a glance: The most important advantages and disadvantages of digitization

+ Significant productivity gains and cost savings potential.

+ New, more flexible forms of work are emerging.

+ Global networking and unlimited communication through digital technologies.

+ Digital media open up a high degree of reach in order to make the company and its products better known in a short time and without immense resources.

+ Large amounts of data can be securely managed and evaluated in a targeted manner, which means that marketing strategies and the development of products / services can be much more targeted.

- Higher costs of implementing digital technologies (especially in small businesses where there is a lack of specialist knowledge).

- Increasing dangers from cyber crime.

- Increased requirements for data protection, especially with a view to new regulations (GDPR).