Covid-19 Leading to Company Digitalization Push

Bitkom: digital surge as companies increase investment levels

The corona pandemic has led to a digitalization surge among larger companies in Germany. Three quarters of large companies in Germany are increasing their digitalization investment commitments as a result of the coronavirus pandemic according to the preliminary findings of a report conducted by Bitkom Research and Tata Consultancy Services. Of the 955 companies with 100 or more employees surveyed in May and June, almost no companies (0.2 percent) believe that the Covid-19 crisis has not had an impact on digitalization plans. 

Digital solutions today, not tomorrow

According to the preliminary report findings, the pandemic has impressed the need to introduce digital technologies and business models today  – and not at some point in the distant future – upon those companies surveyed. Announcing the findings, Bitkom Research Managing Director Axel Pols, observed that the more digitally positioned companies are, the better placed they are to ride out potential crises like the coronavirus pandemic. According to Pols, Corona must be a wake-up call for more digitalization, with the necessary political will present to help push the development of digital infrastructure. 

4 in 10 companies accelerating digital business model 

Four in ten companies are heeding the wake-up call to increase their digitalization efforts by accelerating the digitalization of their own business model, leading to a change in the range of products on services being made available. More than one in three companies record a positive employee experience in dealing with digital technologies since the outbreak of the ongoing crisis. 

Mechanical and plant engineering sector showing the way

Eighty percent of companies in the mechanical and plant engineering sector have increased investment in digitalization according to Bitkom, followed by the banking and insurance sector (66 percent). Almost half of all chemicals & pharmaceuticals and banking & insurance companies surveyed are respectively accelerating their business model digitalization efforts. 

Covid-19 also providing a jolt to stagnating SME digitalization  

According to the KfW Business Survey 2020, SME digitalization projects in Germany were stagnating immediately prior to the coronavirus crisis. Sixty-one percent of companies surveyed between December 2019 and March 2020 indicated a desire to implement projects that use digital technologies for the first time or improve their application over the next two years – down five percentage points on the previous year’s levels. 

Cloud opportunities for international actors

The coronavirus outbreak and measures implemented to slow down its spread have seen demand for cloud services reach record levels. Bitkom’s “Cloud Monitor 2020” conducted for KMPG finds that three out of four German companies used cloud computing in the last year – firmly establishing the cloud as the new “normal” in enterprise IT and not just since the Covid-19 outbreak. A further 19 percent of companies are currently planning or discussing cloud deployment, with just six percent of those companies surveyed having no cloud deployment plans in the future.

More than three quarters of companies surveyed consider cloud computing to be an integral component to their internal digitalization plans, be it the digitalization of internal company processes (69 percent) or the development of new business models (38 percent).

Significant opportunities exist for companies who strengthen their regional presence in Germany, while developing hybrid cloud solutions to meet growing domestic cloud migration demand.