Normally, CIOmove participants do not focus on SMEs, because in the vast majority of cases they are responsible for the IT business of large companies. But there are exceptions, for temporary, organisational or just biographical reasons, because careers and organisational structures also change.
This applies, for example, to CIOmover Harald Berger, who as Group CIO was in charge of the Freudenberg Group’s IT business with revenue of more than 12 billion euros. In October 2024, Harald moved to the Business Group “Freudenberg Fluid Technologies”, where he is Vice President IT, Digitalisation & Process Management and CDIO.
Harald would therefore like to discuss at CIOmove why (German) SMEs are still struggling with digitalisation. His points are therefore quite typical for SMEs, but should also be familiar to CIOs at large companies.
Digitalisation is one of the most important transformation and future topics for every industry and every size of company in Germany, especially in the age of generative AI. But there is a lack of implementation.
There are many reasons for this, and not all of them are subject to the creative power of CIOs: companies complain about excessive bureaucracy coupled with stagnating sales. They suffer from problems in the supply chain as well as volatile global conditions caused by numerous crises and centres of war or an increasingly multipolar world order. But the complex also includes internal challenges, among which Harald cites the following in particular:
- The persistent shortage of skilled labour, particularly in IT, remains a key problem because it slows down progress and leads to delays in the implementation of new technologies.
- Heterogeneous and outdated IT landscapes do not meet the technical requirements of digitalisation. However, the overdue modernisation of these systems is cost-intensive and requires careful planning and competent personnel.
- As digitalisation grows, so do concerns about data loss and cyberattacks. Medium-sized companies in particular are often less protected than large ones. However, digitalisation is not possible without protection and IT security.
- Generative AI is now regarded as one of the central key technologies of digital transformation because it is indispensable for process automation, data analyses and the development of new products and business models.
But the use of GenAI in Germany is lagging behind the possibilities. This is jeopardising digitalisation and, in the long term, Germany as a business location – both for SMEs, the backbone of the German economy, and for large companies.
CIOs can – and must – take action here, even if they can do little to change the unfavourable framework conditions. But if they do their homework where they have opportunities and influence, they will bring digitalisation forward and create the basis for the further development of the D location as a whole.
