Digitalization is a key component of a successful business in any country. The development of cellphone communications, online services and electronic commerce makes it possible to abandon paper document circulation, expedite all processes and facilitate access to export markets.
The leading consultants of the German Economic Team (GET) presented the results of their research, dedicated to digital transformation of business in Ukraine, as well as achievement and problems of Ukrainian business, specifically for Ukrainian entrepreneurs.
The event was organized by the Kyiv Chamber of Commerce and Industry in cooperation with the German-Ukrainian Chamber of Industry and Commerce.
GET performed a survey among 500 Ukrainian companies with respect to the situation in digital transformation. It was discovered that 92% of companies consider it as an opportunity, not a risk. However, only 17% of companies consider themselves leaders in this process. Few companies have clear digitalization strategies, however, they face a number of challenges. They include a lack of funds, specialists and experiences.
Ukraine has a powerful IT sector, says Victor Shevchenko, a co-owner of the group of logistics companies ZAMMLER. However, the prices of IT specialists in our country are already at the world level, while Ukraine’s economy and the income of the companies are not.
“Funding is the only thing preventing Ukrainian business from expediting the digitalization. Nothing else. I know it from my own experience. If banks provided investments to ZAMMLER today (in the amount that we need), we would achieve 90% digitalization stage within a year. What we can’t do due to lack of funding, we postpone for 2-3 years,” said Victor Shevchenko.
Anton Tsymbal, Commercial Director of ZAMMLER GROUP, agrees with him. He says that digitalization is a key component of maintaining all processes in the market, however, funding is really decisive. A lot of companies want no digitalization when they find out about the cost of digitalization programs, as well as their maintenance and updating. Furthermore, you need to make a step into the unknown (invest your money without knowing if it will work).
“We as a logistics company believe that IT is getting inside all business processes. Take the warehouses, for examples. Were it not for IT, we would need 3-4 times more people, and we would lose competitiveness at the market. Unfortunately, most of the clients in Ukraine cannot afford to have all the necessary IT instruments at their disposal, because the high cost of digitalization is the main challenge”.
Business also lacks expertise and government support:
“There are no government financial programs aimed at facilitating this process, and our business will suffer if we take the money out of it. Premises require repairs, machines require fuel, people need salary. We can’t just take this money and use it for something else, therefore, we need support from the government and banking institutions. Loans at 3% are a dream for us. But, for example, in Poland or Germany interest rates are two or three times lower than in Ukraine. We have representative offices in Europe and understand how useful such support would be”, says Anton Tsymbal.
Which measures must be taken in the country in order to expedite the digital transformation?
The GET experts recommend to increase the qualified workforce, understand the need for change, particularly in big companies, remove the gaps in regulation and electronic management, and improve the state financial support for medium enterprises in the context of digital investments.