Time for new beginnings
For a long time, German small and medium-sized businesses were in danger of missing the boat on digitalization. The shutdown is now proving to be a driver of technological change.
In mid-March, researchers at the Berlin-based company Pharmact had an idea: What if every patient who has antibodies against the coronavirus could carry proof of this, issued by a doctor, on their smartphone? This proof could be shown at concerts, in restaurants, or at national borders. No sooner said than done. The medium-sized company developed a rapid test that, after analyzing two drops of blood, provides certainty within 20 minutes as to whether antibodies are present. Along with the test result, the patient receives a QR code that they scan into an app programmed by a consortium of companies. The smartphone owner’s secure personal identification is handled by a process from the Berlin-based company WebID Solutions: The user holds their ID card in front of the smartphone camera; the ID data is read and verified for authenticity. Then the user takes a photo of themselves, which is compared to the ID photo. Frank Jorga, CEO of WebID: “Without the COVID-19 pandemic, this idea would never have come about.”
Necessity is the mother of invention—and often serves as a catalyst for breaking with old traditions and embracing the new. In times of crisis, “maybe someday” becomes “right now.” The COVID-19 pandemic has demonstrated this once again. Many small and medium-sized businesses, which had previously been hesitant to drive digital transformation forward, are now taking decisive action and developing technologically innovative solutions. “They have begun to build digital infrastructure, comprehensively digitize business processes, and develop new, digital business models,” observes Bitkom President Achim Berg. The crisis is “a wake-up call.”
As recently as late 2019, the industry association had warned that only 10 percent of companies had fully digitized their office work. The pandemic changed that overnight: virtually overnight, customer orders via WhatsApp and shareholder meetings via Skype became possible. Internal company communications now run through the instant messaging service Slack, and webinars are held via Zoom. “What we’ve been seeing in small and medium-sized businesses since March is a massive field test,” says Dirk Pfitzer, senior partner at management consulting firm Porsche Consulting. New ideas are being tested everywhere, and developments that were approached hesitantly before the crisis are being accelerated. “COVID-19 is acting as a catalyst,” says Pfitzer. “The digital transformation is being massively accelerated.” It is encouraging, he notes, that companies are focusing on solutions “that actually bring them added value.”
Just sign digitally
Kapsch TrafficCom took this into account as well. When the lockdown sent the majority of employees at the intelligent traffic systems provider to work from home, company leadership decided to implement a digital signature system. Management didn’t have to start from scratch—even before the pandemic, the company had been testing internal options to replace handwritten signatures. The medium-sized company acquired the cloud-based e-signature tool Adobe Sign. “This allows our colleagues authorized to sign documents in Austria and Germany to send, sign, track, and manage documents from home via a browser or mobile device,” explains Kapsch TrafficCom executive Peter Schuchlenz. This made it possible to exchange signatures quickly and easily. “As digital signatures gain greater acceptance among government agencies and courts, the scope of application will expand,” Schuchlenz is certain.
However, small and medium-sized businesses between the North Sea and the Alps are not currently digitizing out of necessity. When the German economy was shut down in mid-March, Stefan Flohr, managing director of Flohr Industrietechnik—a company specializing in drive technology near Koblenz—put into action a digitalization idea he had been mulling over for some time: He replaced the screw jack used, for example, to move lifting platforms for aircraft maintenance and repair with a new, smart version. The new development comes from the Lower Saxony-based company Bornemann Gewindetechnik. The highlight of the new gear: Integrated mini-sensors measure all motion data of the threaded spindle, which is linked, stored, and transmitted to a smartphone via Bluetooth. “This way, we can see the condition of our product at any time,” explains Flohr. The lifting systems no longer need to be shut down every two months for maintenance inspections. This saves time and money. “With this project, we made perfect use of the COVID-19 downtime,” concludes Flohr.
The Crisis as a Game-Changer
Consultant Pfitzer expects that in the coming months, more and more solutions implemented during the crisis will become established and scaled up: “Many of these will remain in place and be refined.” For example, numerous companies now want to sell their products online on a permanent basis and expand through their new web shops. The Eberswalde-based private bakery Wiese, for instance, has found that customers generate three to four times more revenue in the online store compared to the physical store. During the crisis, the company also introduced a custom-programmed ordering app that simplifies production planning. For Jenny Bechly-Günzel of the Mittelstand 4.0 Competence Center in Cottbus, this is the right move: “Digitalization isn’t just a nice-to-have—it makes all the difference.”
The construction industry has also been increasingly digitizing its operations since the crisis began. Take Karl Ditandy, for example. The Rhineland-Palatinate-based specialist in natural stone construction has not held on-site meetings with architects, clients, and suppliers since mid-March, but instead brings teams together virtually. The site manager films at the construction site, while everyone else sits at their screens at home or in the office and exchanges information. No more driving to the site—instead, high efficiency.
The coronavirus pandemic has really played into the hands of a young industry: digital health. Since March, dozens of related apps have hit the market. One project that has been accelerated by COVID-19 is the electronic prescription. Healthcare provider Noventi, in collaboration with Techniker Krankenkasse, implemented the “Germany’s e-Prescription” project within four weeks: The patient calls their doctor, who, following an audio or video diagnosis, sends the prescription to the patient’s smartphone. The patient forwards this to their local pharmacy. The pharmacy’s delivery person brings the order to the patient’s home. The project went live in early May. 700 pharmacies are already participating. “The entire process takes place without any direct physical contact,” emphasizes Noventi CEO Hermann Sommer. Flexibility is a strength of small and medium-sized businesses. “We moved like a speedboat,” says Sommer, and he is certain: “The demand for digital solutions in the healthcare sector will remain high even after the pandemic.”
The same applies to machine specialist and developer Bornemann. “Digitalized components that detect wear and material overloads and monitor processes will shape the future of machine and plant engineering,” predicts company CEO Moritz von Soden. He counts among the application areas for his smart threads all systems in which threaded spindles or screw conveyors are used—such as machine tools, extruders, or pallet trucks and lifting jacks. Von Soden has noticed a renewed enthusiasm for innovation projects among many medium-sized companies. For him, one thing is certain: “The COVID-19 pandemic is fueling the digital transformation in many places.”
Incidentally, according to current plans, the coronavirus app developed by Pharmact and WebID will be available to the general public later this month. The price has not yet been determined. “But with this app, we have a solution that can also be used during future waves of infection,” says WebID CEO Jorga, outlining the business potential. He calls it “a huge market.”