Volver a Blog Digital Transformation Disrupción digital Internet de las cosas (IOT) IOT Business process digitalization is key to improving the competitiveness and sustainability of SMEs 15 May, 2023 Business process digitalization, smart electronic devices, and the new business models that have emerged from using digital technologies constitute the three main axes on which the concept of digitalization is based. The reason is very simple. One only has to look at the definition provided by the analyst firm Gartner in its “Information Technology” glossary. Digitalization is “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities. It is the process of moving to a digital business”. However, it is worth remembering that, in contrast to the term “digitalization”, the term “digitization” is sometimes used. Although they are often used interchangeably, it is important to note that they have different meanings and refer to different processes. The first, “digitalization”, refers to the process of using digital technology to transform and improve business processes, products, and services. In the organizational context, “digitalization” implies the use of technology to improve a company’s efficiency, quality, and profitability. The second, “digitization”, is the conversion of analog information (paper documents) into digital format. Thus, it could be described as “data digitization”. Having clarified these terms, it is clear that digitalization goes far beyond IT system modernization, i.e. updating software, hardware, and staff or end-user knowledge. For small and medium-sized enterprises, in particular, it impacts customers, by integrating the Internet with products and sales channels; internal control and business efficiency, by automating and improving business processes and production; and business models, by restructuring the value chain and modifying how primary and secondary activities are carried out. Regarding business processes, it is worth noting that the main objective of digitalization is to increase the degree of automation. This will empower data analysis, and simulation integration for processes and supply chains, which in turn increase productivity and sustainability, and reduce human errors and costs, resulting in resource optimization and a striking competitive edge. In terms of sustainability, according to the Intergovernmental Panel on Climate Change (IPCC) and Oliver Wyman’s internal analysis in the Digitization of Spanish SMEs report, “process automation improves efficiency and reduces costs”. These are platforms that, when integrated with other technologies such as “Artificial Intelligence, the Internet of Things (IoT) and big data, improve connections and information exchange, increasing the circularity of products, processes and services”. In addition, process digitalization seeks to pinpoint errors and inefficiencies, with the aim of correcting them, and reducing waste. According to Lean Manufacturing theory, waste is any activity that consumes resources but does not add value to the end customer. The result is an optimal level of cost savings and an increased level of business efficiency. As for competitiveness, business process digitalization provides an important competitive advantage in terms of increasing the level of profitability. This is crucial in the current inflationary economic context, which is also marked by a higher level of debt in SMEs, which has not dented investments in digitalization due to the mobilization of a significant amount of public and private investment through various structural reforms. In this respect, process automation helps companies to make optimal use of resources while streamlining business processes. In addition, BPMS technology provides real-time data on the status of processes in the form of key performance indicators (KPIs), revealing opportunities for improvement and enabling informed decision making.