“Digitization is not an option, it is an obligation”

The pandemic has forced the digitization of all types of businesses to accelerate. But digitization is not a current process that emerged from nowhere, it has been happening for decades but at a slow and safe pace. 44% of Spanish entrepreneurs recognize that the pandemic has accelerated the processes and investments of this digital transformation in their businesses.

WHAT IS DIGITALIZATION?

It is the process in which digital technology begins to be implemented in the economy by modifying production, consumption and even the structure, organization and management of companies.

It is important to distinguish between digitization and electronic commerce. The latter is only one piece of the enormous composition that is the process of digital transformation. It ranges from trivial aspects such as the corporate website and email to digital corporate communication, specific software or structural reorganization to adapt to this process. This allows each organization or company to adapt the process to their business as there is no single formula.

DIGITALIZATION HAS BECOME AN OBLIGATION

In recent years, governments have assumed that digitization is important and various digitization programs for businesses have been launched and supported. Specifically, in 2020 the government of Spain launched the Plan for the Digitization of SMEs, Digital Competences and Digitization of the Public Administration, indicating that “digitization is not an option, it is an obligation” in said act.

There are many business sectors that have been entering the digital world for years. Actions as everyday as shopping, buying a plane ticket, managing goods or requesting an invoice have already become processes within the reach of a couple of clicks. The ability to productively digitize a business or service is not exclusive to certain types of organizations. The digital field has served to develop projects such as SOS Telemedicina, a Latin American online platform to collaboratively connect doctors and offer training content in less inhabited and inaccessible areas, or totally online universities, such as the UOC.

Noelle Cajigas, partner responsible for Markets at KPMG, told EFE that “There is no company that does not need to promote digitization and that cannot benefit from it.”

Although the profitability of this process is not fully calculated, it is stipulated that by 2025 it could mean an increase of 120,000 million euros on the gross added value of Spain. In addition, the economic profitability of the companies is also highlighted. Estimates point to a cost reduction of up to 20% in almost all operational functions: logistics, quality, maintenance, inventory and production.

The opportunities are endless. The best option in the face of this challenge, which involves proposing a process that in many cases takes years, is to create possible scenarios and connect supply with demand.

MONEY IS NOT HEAVEN-SENT

Like any other business process, digitization has a significant investment cost that many companies a priori cannot afford. For this reason, different government agencies have created different grants and subsidies to support this transition, such as:

Galicia Exporta Dixital 2021: Its purpose is to support the implementation and development of a digital plan for Galician companies, with which they improve their access to customers, reduce advertising costs and enhance their economic activity internationally. Covers consulting expenses, custom software, SEM campaigns among other actions.

Galicia Emprende 2021: oriented to newly created companies. Its purpose is to promote business recovery in Galicia and promote job creation through new entrepreneurs.

Cámara de Comercio de España: This entity has several grants for the digital transformation of SMEs and the self-employed throughout the Spanish territory. Among the grants are the TICCámaras, Cybersecurity, and Industry 4.0 programs aimed at purely digital development.

These are three of the many grants and subsidies offered by public bodies. There are many more at the regional level such as DIGITALIZA-CV in the Valencian Community. In addition, new subsidies will soon arrive from the aforementioned Pymes Digitization Plan (2021-2025) of the central government.

And you? Do you already have your transformation plan or have you digitized your company?