Why digitize a company? A study released by ECLAC gives the answer

A study released by ECLAC answers the question: Why digitize a company?

In abstract terms, digital technologies can generate opportunities for improvement in all business areas of companies.

The development of digital solutions has had an exponential trend in recent years with the reduction of costs and the increase of its offer in a myriad of uses and applications.

They are not only about advanced technologies, but about the combination of various solutions capable of being inserted in all business activities.

In a schematic way, the main potential benefits can be redirected to three business areas: organization, productive technology and learning capacity.

To the first, the technologies that contribute to giving can be redirected:

• Greater visibility.
• Better access to information.
• Possibility of mitigating traditional barriers to trade.
• Facilitate financial transactions.
• Improvements in business performance, growth and expansion processes.
• Possibility of developing new products.

Digitize a company

When it comes to improving production processes, digitization allows companies to reconfigure their resources to respond more quickly to crises.

For example, information technologies reduce the cost of coordination within companies and promote the flexible allocation of resources.

A similar effect can be achieved in supplier relationship management.

In this context, the reconfiguration of production processes, products and services greatly reduces the difficulty and costs of changing resources, variations in designs or models or adjustments in the size of production batches.

Finally, digitization is potentially beneficial in that it amplifies the dynamic capabilities of companies.

Advantage

First, digitization helps companies perceive changes in the environment.

The great advantage of digital resources in volume, speed, variety and value makes it possible for companies to collect or retrieve information in the external environment at a low cost.

In addition, the application of big data analysis and artificial intelligence systems helps companies to filter valuable information through high-speed computing, so that they can perceive and predict changes in the environment to some extent.

Another benefit linked to the formation of dynamic capacities refers to the possibilities of reorganizing capacities and innovation strategies to add value to the products and services that SMEs provide.

Digital technologies allow companies to expand their contact networks and extend their information capacity practically infinitely, both towards new cognitive fields and towards areas of specialization already consolidated in the company.

For companies that are already integrated into collaborative networks, digital technologies make it possible to intensify interaction and propose integration experiences for the management of shared resources, such as supplies inventories or specialized services, for example, training programs designed ad hoc for the supply chain.

Challenges about digitizing a company

The elements described in the previous paragraphs configure powerful incentives to digitize a company and there are studies on Industry 4.0 that prove that these processes have indeed generated important impacts.

However, with regard to Latin America and the Caribbean, empirical data indicate that the digitization process has been very uneven.

All these ideas were developed by Marco Dini, Nicolo Gligo and Alejandro Patiño.