Digitizing KMUS: Why it's so important

by Meike Müller

Digitization, or digital transformation or revolution, is bringing about changes in many areas of society. New technologies are being used in business, politics, education, and also in the area of culture. For small and medium-sized enterprises, it is a challenge to keep up with the developments and not to be left behind and suffer the consequences. In this article, we will briefly explain why digitization is so important for SMEs, how individual software can be used there and what support the state offers. For further questions and support in your digitization process and the application for government funding for your we are happy to help!

Reading time 6 min

This article provides you with the following information
  1. We explain what SMEs actually are and what exactly is meant by digitization.
  2. We also give you reasons why digitization is important for you and your company.
    1. We highlight the advantages of digitization
  3. What can happen if you don't want to digitize?
  4. We'll show you how to start the digital transformation in your company very easily
    1. We have a four-step guide for you on how to do this
  5. You'll also find out how individual software can help with digitization
    1. and in which areas of your company, for example, digitalization can take place.
    2. We have also highlighted the advantages of using digitization software for your digitization.
  6. More information on government funding
    1. Funding with "Go Digital
  7. The bottom line
  8. FAQ: Questions and answers
    1. What is a digitization premium?
    2. What is meant by an innovation loan?
    3. Does the BMWK provide funding for SMEs?

Explanation of the terms

SME = In Germany, small businesses and small and medium-sized enterprises are referred to as SMEs. This has even been defined in an EU recommendation (2003/361). For orientation: Your company counts as an SME if it has less than or exactly 249 employees. In addition, the annual turnover must be less than 50 million euros.

Digitization = Digitization is a very general term that was initially used primarily in reference to the conversion of analog documents to digital content. In the meantime, it is also used when referring to letting new technologies take over entrepreneurial processes and thus automate fields of work.

Why is digitization important in SMEs?

As technologies continue to advance, the requirement for small and medium-sized enterprises in Germany to digitize is also growing. In order to keep up, it is important that recurring business processes are automated. By using customized software, tasks can be simplified and resources saved. Companies that do not or not yet participate in this are at a major disadvantage.

The transformation of SMEs also leads to better discoverability. By having an online presence, potential buyers become aware of a product or service. According to a survey by Statista, 25.2 million Germans use the Internet every day to search for information. If your company can't be found there, a potential customer has simply been lost.
You can see why digitization is also important and how it can help you in your business by looking at the benefits below:

The benefits of digitization

  • Customer communication can be simplified
  • Work processes are simplified and in some cases completely automated
  • Information can be made available to everyone quickly and freely, so it can also be used in the home office.
  • Costs can be reduced because, for example, the use of paper is no longer necessary
  • More visibility, awareness and accessibility through online presence
  • More opportunities to generate potential buyers
  • Customized software development can address the individual needs of the company and optimize business processes

The problem of "no desire for digitization

If your company is not yet digitized and you also have rather less desire to drive digitization in your company, then a new problematic might soon arise for you. Due to the advancing digitalization in all economic, educational and cultural sectors, a certain expectation is developing among your potential buyers. After all, customers are now very well connected, they know their way around the Internet and use new technologies in their everyday lives. They expect an all-round reliable service that offers individual solutions. In addition, information should be freely accessible at all times, inquiries should be answered quickly, delivery dates should be met and information about the status should be provided, and much more. You can hardly meet these demands if you do not digitize or automate some business processes.

You should think twice about whether you want to tackle the topic of digitization. In the following, we'll also explain how you can best get started, how custom software can help with digitization, and what government subsidies are available to make the process easier for you financially.

How to start digitization in your company

You don't start the complete digitization of your company right away. Rather, digitization is a step-by-step process that takes place continuously. Even in a well-digitized company, there are always construction sites and opportunities for improvement. However, this should not frighten you or scare you off. After all, the more steps you master, the better you'll get at learning new topics and implementing them for your company. And if you can't find your way around on your own, there are always experts who will be happy to help you with digitization. In most cases, external consultants are also much better at identifying the areas in which digitization is still needed. They should look at your company from the perspective of which areas need to be digitized and in what order.

Once it has been clarified which departments and areas need to be digitized and an order has also been determined, then it is a matter of highlighting the individual small steps up to the complete digitization of an area. The focus here is on the questions of which processes can be digitized, which components need to be added and which competencies are required. You should always set yourself small goals for the implementation; this promotes motivation and does not overtax your employees.

For a better overview, we have put together a small guide for you. It will help you to tackle the step-by-step digitization in your company. Because at first, all the tasks that go along with it can seem quite overwhelming. We recommend that you focus on one task at a time. Work through one task in your company before moving on to the next. Here's how you can make digitization happen:

Four steps to start digitization

What is the current state of digitization in your company?

Digitizing your business is a step-by-step change of small processes. You don't have to worry that your entire company will change with the transformation. You can think of it more as simplifying or automating individual tasks or processes. For example, instead of filing documents, you store them in a database.

To get started with digitization, you should first check the current status. Which areas are perhaps already digitized and which can you immediately identify that urgently need to be digitized? Most companies start with internal digitization or with the intention to work as paperless as possible. 2.

Is your company prepared for digitization?

Now preparations must be made to ensure that digitization becomes the desired success. To do this, you need to look at various criteria. Firstly, you need to determine whether your company can manage the changeover on its own or whether you would prefer to consult experts. Depending on the department and area, these might be software developers or IT security experts. On the other hand, you should also look around at your competitors in your industry. How have they implemented digitization? After all, you don't want to be left behind by them. Another point is to find out about the latest innovations. Is the market perhaps on the verge of releasing a new technology? Then it might be worth waiting for that moment before the digitization in your company is no longer in line with the latest developments within a very short time.

Which areas should be digitized first?

As mentioned above, all areas that are to undergo digitization must first be identified. In the next step, these are then worked through one after the other. For this, you need to think about an order.

How can the individual areas be digitized?

Once you have determined the order, you need to think about how the first area can be digitized first. What technical arrangements need to be made? Will external help be needed and which employees will be affected? First collect all the tasks and put them in a sensible chronological order. Now you just have to work through them one after the other. Once all tasks have been completed, you can do this for the next area until all areas have been digitized from scratch.

How can the use of custom software help with digitization?

Digitization can be approached in your company in a variety of ways. One method is the use of software, for example, to digitize internal processes and facilitate collaboration among employees. Depending on the business sector, standard software may be suitable for this purpose. With custom software, on the other hand, the focus is on the company's own needs and requirements. Individual wishes and functions can be integrated and offer the company the perfect solution. In the next section, you'll find out which areas are worth digitizing with custom software. We'll also tell you what other advantages digitization software has to offer.

In which areas is digitization possible or necessary?

In the meantime, the digitization of a company is possible in many areas. However, it is most necessary in areas where processes can be easily digitized and resources such as time and money can be saved. Often, internal processes within a company are the easiest to implement. This would be, for example, the implementation of a paperless office. All documents and information are only created and stored on the PC. Invoices are also created online and automatically. This saves the company money because it no longer needs paper or storage space for all those binders full of documents, as well as time because the invoices no longer have to be made manually. All processes for which documents are needed and need to be created can be easily covered by custom software. For invoicing, there are now even enough service providers who provide suitable standard software for this purpose. For individual wishes and processes, it is worthwhile to contact a software agency. In a consultation, you will find out what is best suited for you. Another advantage of a paperless office is that authorized employees can access documents at any time. They don't have to be on site at the company to do this, but can also access the files from their home office, for example.

Another option for digital transformation for SMEs is for companies that need to allocate appointments to also offer online appointment allocation. There are already standard softwares for this that are used for the respective company. It's not hard at all to set up, and you give your customers an easy and quick way to book an appointment. Sometimes it makes sense to think even further. If it is a beauty salon that wants to make online appointments possible, then it would be an idea to set up a matching online store as well. After all, once you have visitors on your website, you might even be able to generate an additional source of revenue with it.

Of course, there are also areas in your company that can be digitized without the use of software. This is, for example, enabling home offices in departments where it makes sense. This has become increasingly important, especially during the pandemic. In order for home office to be offered smoothly and securely, the appropriate resources and security measures will be necessary. For example, suitable equipment must be made available and IT security must be guaranteed. But here, too, it may be that the use of digitization software becomes helpful. Because this way, tasks can be better distributed in the home office, the status of projects can be checked and working hours can be adhered to. An individual CRM can definitely be of use here, even if none has been in use so far.

Further digitization opportunities open up in the areas of logistics, for example, where warehouse systems make inventories superfluous, or in the area of data processing and management, where databases can help to better structure personnel data. But retail can also be digitized by opening an additional online store with various payment options.

Advantages of individual digitization software

  • Customized software can be adapted directly to the needs of your company and quickly advance digitization
  • Custom software often saves costs and resources because it optimizes business processes
  • When working with a software agency, you have a competent contact person who is familiar with digitization.
  • Custom software can be further optimized, adapted and expanded over time
  • Especially during the Corona pandemic, it has become necessary to digitalize certain processes - with custom software, the Corona problem can be addressed and hygiene standards can be maintained.
  • The individual software picks up on known problems and processes, so that it takes hardly any time for employees to become familiar with it

Subsidies for SMEs

The state also offers SMEs funding programs for digitization. If you are aiming for digitization measures with your company, you should take a closer look at the funding programs. One of these support programs is "Go Digital". Some of our customers are already using this support program to improve their position in terms of individual software or online stores. In the following section, we will tell you everything you need to know about the support program. We would also be happy to invite you to an initial consultation in which we can discuss your digitization goals and go over the funding options.

Go Digital

The "Go Digital" funding program is aimed at SMEs and craft enterprises. It supports the plan to digitize and thus optimize business processes. To this end, funding is available for 30 days at a daily rate of up to 1,100 euros. For this, a so-called main module must be combined with a secondary module. Modules can be: "Digitized business processes," "Digital market development" and "IT security." Depending on the size of the company, the company is entitled to a subsidy for the project amounting to 50% of the costs. This would be a grant of 16,500 euros if the total project costs are 33,000 euros.

The prerequisite for Go Digital funding is a company size of less than 100 employees. In addition, annual sales or the annual balance sheet total in the year before the contract is signed must not exceed 20 million euros. Of course, the company must have a permanent establishment or branch within Germany and be eligible for funding under the de minimis regulation. The grant does not have to be repaid. However, payment will only be made after a review of the proof of use.

You should also know that you cannot be funded by Go Digital only once. If one year has passed since the end of the first grant, you can apply for funding again. However, you should note that the funding program has so far only been approved until 2023.

Our conclusion

If your company has not yet gone digital, now is the right time to take the first step. If the funding conditions are right for you, it is definitely worth applying and tackling the topic of digitization with financial support. To get started, it's enough to set small goals for your company and digitize business processes step by step. If you don't make the switch, your competitors will sooner or later outpace your company. To prevent this from happening, we as a software agency are happy to assist you and work with you to design a digitization strategy for your company. Whether you need an online store or customized software, we are at your side. We also offer comprehensive support and service and have already implemented several projects funded by "Go Digital". Contact us now for an initial consultation and develop an individual software together with us that will bring you and your employees forward.


FAQ: Questions and answers about funding

We hope you've now gotten a good overview of KMUS digitization. Finally, we have a few frequently asked questions that we'll answer for you. If you have any further questions, please feel free to call our team of experts. We look forward to helping you!


  • What is a digitization bonus?

    In Germany, there is no specific "digitization premium" that applies to SMEs (small and medium-sized enterprises) in general. However, the German government has introduced various programs and initiatives to support SMEs in digitization. These include support programs, grants and consulting services aimed at helping companies make the transition to digital transformation.

    One well-known program, for example, is the "Digital Now" support program of the German Federal Ministry for Economic Affairs and Energy. It is aimed specifically at SMEs and provides them with financial support for the digitization of their business processes. The funding can be used for investments in digital technologies, software solutions or employee qualification.

    Furthermore, some federal states or regional economic development agencies also offer their own funding programs to support SMEs with digitization. These programs can range from financial grants to consulting services.

  • What is meant by an innovation loan?

    An innovation loan generally refers to a type of financing that helps companies, including SMEs, implement innovative projects. These loans are often offered by banks, development banks or government institutions and are designed to promote research, development and technological progress.

    The application process for an innovation loan can vary by country and lender. Typically, companies must submit a detailed business plan describing the innovative project, expected results, financing needs and planned timeframe. Information about the company's experience and financial stability, as well as collateral, may also be required.

    One of the hurdles in applying for an innovation loan is for lenders to assess the project's likelihood of success and risk. SMEs in particular may find it difficult to meet this assessment, as they may have limited resources and experience.

    An SME's level of digitization can play an important role when applying for an innovation loan. Lenders often want to see that the company has already taken steps to digitize its business processes and deploy technological solutions. A higher level of digitization can increase the project's chances of success and reduce the risk for the lender.

    The company's future viability and competitiveness are also important factors when applying for an innovation loan. Lenders want to ensure that the company can be successful in the long term and that the innovative project will help strengthen its market position or open up new market opportunities. SMEs must therefore prove that the project adds value to the company and offers long-term growth prospects.

  • Does the BMWK provide funding for SMEs?

    Yes, the Federal Ministry of Economics and Climate Protection (BMWK) in Germany offers various funding programs specifically for small and medium-sized enterprises (SMEs). These programs aim to help SMEs strengthen their competitiveness, promote innovation and support the implementation of sustainable and climate-friendly projects

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from 06.01.2022

Hello, my name is Meike. I take care of the EXWE back office and am responsible for our social media channels. All of our articles are meant to make your life easier and help you make decisions. Nevertheless, it can happen that something remains unclear, so: If you have questions about this article you can easily reach me at +49 231 93149827.

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