Industry 4.0 Jun 18, 2015

Digitization and trades – opposites attract

Shaped by tradition, anchored in the region, and now digital? The world of trades is changing rapidly in the face of digitization, with the sector still at the start of this development. This throws up opportunities for IT consultants and service providers.

Google ranking, online shops, digital order management systems and 3D-supported component production – the opportunities digitization can offer trade businesses are endless. In addition, the growing demands on digital solutions in trades also present exciting opportunities for companies in the field of digitization.

Trade businesses have very individual expectations here, as the sector has a very varied and disparate character. In Bavaria alone, where trades have traditionally been strong, there are more than 202,000 trade companies, generating annual turnover of more than EUR 98 billion. But almost all these businesses have very different structures. One thing is clear: given the large number of disciplines and activities, there can be no one-size-fits-all answer to how a trade business can benefit from digitization. This means that providers of digital solutions for trade have to deal with a very wide range of requirements and develop very individual solutions.

Many businesses have already taken the leap into the unknown by setting up their own website or Facebook page. But that is just the start of a profound change in the sector. The state of Bavaria is playing an active role in driving digitization in trades forward with its “Digitalbonus” – the only programme of its kind in Germany – and the e-business pilots. The benefits and necessity of digitizing business models and processes is undisputed – but many companies simply do not have the time or expertise to concentrate on the issue. After all, it is not always immediately clear what the concept of digitization means for individual trade businesses. This is where the experts – companies from the digitization sector – come in with their individual solution approaches.

Trade facing pervasive changes

For example, it may be a good idea to set up a digital archive for all documents, business correspondence, invoices etc., instead of collecting everything in paper folders as has been done up to now. The issue of IT security also plays a key role for trade businesses, as does marketing their services actively and confidently online.

Looking at pioneers such as the USA and the UK, “building information modelling” (BIM) will soon become indispensable in the construction trade. With BIM, all disciplines involved in construction, such as bricklayers, electricians and roofers, can work on a project together, supported by the software. Instead of drawings and tables on paper, the construction sector can now use building information models in which the architecture, materials, quantities and properties can be called up via the computer at any time. This saves time and money, as the software calculates how dependencies or changes in the construction process will impact on the schedule and the materials needed.

Best practice from Upper Franconia

Although BIM is yet to be introduced across the board in Germany, other disciplines already have pioneers who demonstrate how digitization can be put to effective use. The rural butcher Daniel Lindner from Zochenreuth in Upper Franconia, for example, has gained customers from all over Germany online. The junior partner realised early on that the Internet was the only way to achieve further growth for the butcher. The idea was to gain additional customers by specialising in gourmet meat such as dry aged and wagyu beef, without losing sight of the regular customers at home. And it has been a success: the butcher's now sells its premium beef all over Germany and Austria via a new online shop.

Bittner Werkzeugbau und Stanzerei GmbH, based near Coburg, has also used digitization to pave the way for a new approach. Employing 30 staff, the company produces sheet metal, aluminium and copper parts in large and small series for industrial use, such as in the automotive sector. In future, the company plans to read customer orders directly into the company's IT system via electronic data exchange. The system adaptations are a big challenge for small trade businesses without their own IT department, but it will certainly be worth it. Bittner expects the conversion to save a significant amount of time and money.

These examples show not only that digitization has enormous benefits to offer trades, but also that traditional work in Bavaria can go hand in hand with modern technology. In addition, the two pioneers clearly demonstrate the opportunities this throws up for service providers in the digitization sector.

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