What type of software is best for getting started with digitalization?
Posted: Wed Feb 12, 2025 9:59 am
Large companies are ahead of the game when it comes to digitization and have already implemented cloud systems into their processes and everyday work. They are planning further spending in both areas in the coming years. These trends are also affecting small and medium-sized companies, although they are still lagging far behind when it comes to implementing cloud software. In the following, we will examine what is stopping SMEs from taking the step to cloud 7 and how they can make the digital transformation of their company a success.
Reservations about cloud systems or fear of bad investments?
In September 2017, the Berlin School of Economics and Law and forcont business technology GmbH conducted a survey on the use of cloud services in medium-sized companies and uncovered the objections, challenges and reasons for reluctance:
Study on Digitalization of SMEs
Source: Survey by the Berlin School of Economics and Law and forcont business technology GmbH
If you compare the results from 2017 with the survey results from the same study from 2015, you can see an extreme increase in security concerns - from 60 to 91 percent of non-users. When asked what the main reasons are for reluctance to use SaaS solutions, a large proportion of participants (almost 88%) cited concerns about data security.
Data security concerns in particular represent a major barrier for non-users. But there are still some software search and selection issues that small and medium-sized businesses face and that can lead to their failure in cloud implementation:
Difficulties in defining requirements for a software and determining required functions
Lack of competence and skilled personnel
Lack of change management skills at manager level
Software costs/acquisition costs are often overestimated
For these reasons, a company's first software investment is often a bad investment. This is also confirmed by the Fujitsu study " The Digital Transformation PACT " . A third of all companies have already abandoned a digitization project in the last two years. The average cost of failed projects is over €500,000. In Germany, the (admitted) failure rate is 20%, which resulted in costs of €1.1 million.
Digital transformation is not just a passing trend, but a necessity to keep your company in a competitive position in the market. How can the barriers described be overcome and companies successfully master the first step towards transformation without risking a bad investment?
Cloud technologies as a driving force of digital transformation
The Berlin School of Economics and Law, forcont business technology GmbH and Gartner emphasize that cloud technologies are driving digital transformation in companies. Outsourcing software to the cloud creates numerous advantages for companies:
Cloud solutions are scalable according to the needs of the company.
Tasks that require expertise, specialist personnel and time can be outsourced: installation, configuration, data backup, software updates, etc.
No hardware needs to be purchased.
Company data is available from anywhere and mobile working is supported.
SMEs have a relative cost advantage by using cloud software.
The relative cost advantage for small and medium-sized companies comes from the fact that the costs for cloud software are incurred on a monthly basis. For large companies, a one-time (large) investment in software acquisition is often cheaper in the long run. Large companies also usually have the necessary resources and specialist staff to install, configure and customize the software.
A one-off, large investment in software, on the other hand, is a major burden, especially for south africa telegram data small companies, and always carries the risk of making a bad investment. Cloud solutions are more dynamic and flexible and can be adapted to the growth and needs of the company. Companies can concentrate more on their core business and build a competitive advantage. The money that is "saved" on the software investment can be invested in the company itself.
In which areas are cloud systems most frequently used? The Berlin School of Economics and Law and forcont business technology GmbH come to the following conclusions:
German Cloud Services - Study on Digitalization of SMEs
Source: Survey by the Berlin School of Economics and Law and forcont business technology GmbH
This graphic raises the question of whether the frequency of use of these software categories also reflects their importance for companies. It is particularly striking that the types of software used differ greatly from the top investment areas according to Gartner and IFS. At this point, it is important to examine these two perspectives separately: Which software areas are best suited for getting started with digitization and which categories offer the greatest added value for companies? We asked Prof. Dr. Schmietendorf, the author of the study, about this.
Quote on digitization of medium-sized businesses
Source: Expert interview
The cloud technologies currently used by SMEs are an easy way to get started with digitalization. Data security concerns are less with software for business collaboration or document management than with categories such as CRM or ERP , which involve handling sensitive company data. In addition, the selection and implementation of these systems in the company is less complicated.
Reservations about cloud systems or fear of bad investments?
In September 2017, the Berlin School of Economics and Law and forcont business technology GmbH conducted a survey on the use of cloud services in medium-sized companies and uncovered the objections, challenges and reasons for reluctance:
Study on Digitalization of SMEs
Source: Survey by the Berlin School of Economics and Law and forcont business technology GmbH
If you compare the results from 2017 with the survey results from the same study from 2015, you can see an extreme increase in security concerns - from 60 to 91 percent of non-users. When asked what the main reasons are for reluctance to use SaaS solutions, a large proportion of participants (almost 88%) cited concerns about data security.
Data security concerns in particular represent a major barrier for non-users. But there are still some software search and selection issues that small and medium-sized businesses face and that can lead to their failure in cloud implementation:
Difficulties in defining requirements for a software and determining required functions
Lack of competence and skilled personnel
Lack of change management skills at manager level
Software costs/acquisition costs are often overestimated
For these reasons, a company's first software investment is often a bad investment. This is also confirmed by the Fujitsu study " The Digital Transformation PACT " . A third of all companies have already abandoned a digitization project in the last two years. The average cost of failed projects is over €500,000. In Germany, the (admitted) failure rate is 20%, which resulted in costs of €1.1 million.
Digital transformation is not just a passing trend, but a necessity to keep your company in a competitive position in the market. How can the barriers described be overcome and companies successfully master the first step towards transformation without risking a bad investment?
Cloud technologies as a driving force of digital transformation
The Berlin School of Economics and Law, forcont business technology GmbH and Gartner emphasize that cloud technologies are driving digital transformation in companies. Outsourcing software to the cloud creates numerous advantages for companies:
Cloud solutions are scalable according to the needs of the company.
Tasks that require expertise, specialist personnel and time can be outsourced: installation, configuration, data backup, software updates, etc.
No hardware needs to be purchased.
Company data is available from anywhere and mobile working is supported.
SMEs have a relative cost advantage by using cloud software.
The relative cost advantage for small and medium-sized companies comes from the fact that the costs for cloud software are incurred on a monthly basis. For large companies, a one-time (large) investment in software acquisition is often cheaper in the long run. Large companies also usually have the necessary resources and specialist staff to install, configure and customize the software.
A one-off, large investment in software, on the other hand, is a major burden, especially for south africa telegram data small companies, and always carries the risk of making a bad investment. Cloud solutions are more dynamic and flexible and can be adapted to the growth and needs of the company. Companies can concentrate more on their core business and build a competitive advantage. The money that is "saved" on the software investment can be invested in the company itself.
In which areas are cloud systems most frequently used? The Berlin School of Economics and Law and forcont business technology GmbH come to the following conclusions:
German Cloud Services - Study on Digitalization of SMEs
Source: Survey by the Berlin School of Economics and Law and forcont business technology GmbH
This graphic raises the question of whether the frequency of use of these software categories also reflects their importance for companies. It is particularly striking that the types of software used differ greatly from the top investment areas according to Gartner and IFS. At this point, it is important to examine these two perspectives separately: Which software areas are best suited for getting started with digitization and which categories offer the greatest added value for companies? We asked Prof. Dr. Schmietendorf, the author of the study, about this.
Quote on digitization of medium-sized businesses
Source: Expert interview
The cloud technologies currently used by SMEs are an easy way to get started with digitalization. Data security concerns are less with software for business collaboration or document management than with categories such as CRM or ERP , which involve handling sensitive company data. In addition, the selection and implementation of these systems in the company is less complicated.