Dr. Monika Bauch -

Management Consulting

News 3/2016 Digitalization and digital platforms

Meanwhile digitalization – in Germany amongst others well-known as industry 4.0 – and its implementation has many fascinating facets. And data is t h e important part within digitalization. Data is gathered and interpreted to make it available for use (in a commercial way). This is the basis for a lot of potentials for companies, e.g. the optimization of processes, but above all for the development of new business models, that lead to an increase of the competitiveness of these companies.

There are companies that offer a platform and make big business like facebook, google, Amazon and Uber. But also in established companies of different sectors many changes can be seen with a rising importance of digital applications and platforms.

The transformation of a carrier to a logistics service provider

Many years ago a lot of carriers began to change their portfolio. The margins for the transport services decreased, there has been a big competition in the market and in these times many carriers started to develop new business fields. Besides the offer of various transport routes, like sea freight, transport by road and air freight, sector-specific services have been developed to meet the specific requirements of the goods that have to be delivered. Besides the internet presence of the logistics service providers, there are e.g. online platforms for freight exchanges, where the customer meets the logistics companies. In nowadays the logistics service providers also take over parts within the supply chain of the customer. As an example some logistics service providers not only do the warehousing, but also the assembly of parts, that have to be delivered just in time or just in sequence directly to the production line. Information technology is in most cases the enabler for these value added services. Digital applications make the processes within the value chains more transparent and improve in this way the coordination between the market participants. The intelligent use of available data on the platforms allows to reduce time and costs and to improve quality and flexibility. Simple examples are the substantial reduction of inventories and the reduction of transportation costs based on the use of lower-cost alternatives like ship instead of aircraft. In this way the digitalization and the use of digital applications are the enabler for various improved and new services.

The utility company on the way to become an energy service provider

Since some few years it is just the same in the energy sector. The pure power supply is not a sustainable business for the future. Besides the grid operation and renewable energies, customer-specific solutions play a more and more important role.The utility companies use their know-how to offer additional services, e.g. energy consulting. Furthermore digital applications are developed and offered on platforms, e.g. to enable the customer to monitor the energy consumption. In this way not only the portfolio of the utility companies changes but also the markets, the competitors and possible cooperation partners. Meanwhile there is a lot of cooperation between start-ups and established companies. Thus digital competences, the innovative capacity and the open mind culture of start-ups can be combined with established services and lead to new business models and services.

The automotive industry in the role of a provider of (urban) mobility services

Also in the automotive sector there are many progresses. Various alternative fuels have been developed. In nowadays we try to increase the number of electric cars on the streets. And since years the percentage of software in cars has increased. Various driver assistance systems are offered as well as entertainment functions. And in recent years a change of the portfolio of the carmakers can be seen. Besides the pure production of the cars, e.g. financial services, the service to configure a car in the internet are offered. In addition there are further services like car sharing offered by the automobile manufacturer, until now mainly in urban areas. Within the framework of a smart city especially these mobility concepts to rent a car not only at a car station, but everywhere, will become an essential factor. German examples are DriveNow, car2go. Besides also many companies of other sectors improve their portfolio of mobility solutions, e.g. the railway, the urban transport companies. In Munich there are mobility solutions e.g. to rent a bicycle at stations all over the city by the use of a smartphone app. Thus digital platforms are the enabler for comfortable services that make the life easier.

Digital platforms

Digital platforms offer the possibility to bring together two or more users for business or social reasons. On digital platforms data is gathered and interpreted to make it available for use (in a social or commercial way). In this way there are network effects, i.e. with the growth of a network the added value for the single user increases. Or on purchasing platforms the added value increases for one side, in this case for the customer, in case the number of the other side, the suppliers and therefore the quality of the portfolio, increases.    

Possible positive and negative effects and the necessity to change regulations or to develop new regulations regarding aspects like to ensure fair competition, labor laws, consumer protection are currently discussed.

An adequate future-oriented digital infrastructure that meets certain criteria is the precondition for the success of the digitalization and digital platforms.

In summary it can be stated: Since many years in many sectors the original business is not sufficient any longer to be successful. Companies in the logistics sector, in the energy sector and in the automotive industry increasingly change and improve their portfolio with additional services and new business models. Digital platforms are the enabler for these changes. The challenge is on the one hand to ensure growth, innovation and investments and the development of new business models and on the other hand to ensure a fair competition and a level playing field, to consider labor laws, consumer protection, data security and data sovereignty. These questions are currently discussed.

Digitalization offers a lot of potentials for the companies to improve and optimize processes, to develop new business models and to offer new services. Dr. Monika Bauch – Management Consulting offers to give companies a support to make successful changes and to improve the competitiveness. Please contact This email address is being protected from spambots. You need JavaScript enabled to view it. .

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