The influence of digitalization on the development of enterprises: synergetic approach and modern pragmatism

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The influence of digitalization on the development of enterprises: synergetic approach and modern pragmatism

Introduction

digitalization economy business model

The concept of "digitalization" in the development of the digital economy is being studied. The key stages and factors that influence the digital transformation process are identified. The necessity of the digitalization process in the transition to new business models in the activities of enterprises is substantiated. With the help of a synergetic approach, the main results and advantages of the digitalization process for enterprises are outlined, the forms, directions, stages and obstacles of its implementation are indicated. The digitalization pragmatism of enterprises is based on the forming principles of the latest goals and principles of management, meeting customer needs and expanding the capabilities of enterprises through the introduction of digital products. It is accepted that digitalization is designed to simplify and accelerate work with large databases, to automate all activities (basic and auxiliary operating, investment, financial), to improve communication with customers, suppliers and partners and all environmental institutions, the formation of new principles of interaction in within the enterprise - between departments, employees, management, the transition to new organizational forms of management (network and virtual economy). It is proved that digitalization with the usage of digital solutions is necessary in building effective processes of enterprises and the state in general.

Presenting main material

In the context of globalization, the vector of digitalization, which is the key prerogative of permanent change, is becoming important for the innovative development of enterprises. Developed by the Association of Industrialists and Entrepreneurs of Ukraine "Industry Development Strategy 4.0" [1], treats digital transformation as social or technological changes that are associated with the penetration of digital technologies in all aspects of human interaction. That is, the effective functioning of the subjects of market relations is possible by identifying alternative competitive development strategies taking into account digital trends. In this context, the key point is the rapid adaptation of digital technologies to the business activities of businesses.

The processes of digital transformation and digitization are the driving forces behind the new technologies introduction, such as big data analysis, the Internet of Things, cloud technologies or 3D printing. There is a transformation of analog information into digital data, and the constant convergence of the physical and digital worlds motivates companies to integrate, for example, the Internet of Things and Services into production processes, to create value through analysis and management of big data. Digitalization penetrates into various spheres of industry and services, makes changes in the management of companies, improving their financial and economic activities and contributes to their competitiveness in the market. The usage of powerful software, equipment and digital tools forms the company's advantages in the market, so the processes of digitalization are becoming relevant and require thorough research in modern conditions.

Theoretical and practical aspects affect the digitalization of business development, explore such scientific issues as: U. Balyk, T. Bui, S. Voitko, I. Gavriliv, O. Gashutina, D. Gorovy, O. Hrybinenko, O. Hudz, O. Guseva, A. Gurenko, A. Derkach, A. Domansky, M. Dubina, O. Kozlyanchenko, M. Korneeva, S. Korol, K. Kuprina, T. Lazorenko, S. Legominova, L. Ligonenko, Luk'yanenko, M. Makarova, A. Maslova, O. Melnychuk, Polovyk, O. Savytska, G. Sokolova, A. Khripko, L. Tymchenko, O. Shaleva, S. Fedyunin, V. Shcherbyna, O. Yurchak and others. However, given the value that raises many questions on this topic, these are debatable issues that teach her choices.

The term "digitalization" originated in the United States and comes from the word "digitalization", which translates as digitization, simplified interpretation of the term "digitalization of business" - the transfer of business processes in electronic form, but this process is not limited to digitalization. Information and communication technologies change (digitize) first individual business processes in business organizations, and gradually form a virtual (digital) business model, "transfer" business to the "digital world".

The need for digitalization is due to the desire to constantly increase the level of its competitiveness, which is a prerequisite for the survival and development of business organizations and enterprises in the neo-economy. Modern scientific literature has many definitions of the essence of digitalization, the most common is "digitization", "digitalization". In particular, the scientist S. Kolyadenko defines digitalization as bringing any information into digital form [2, Р. 106]. According to G. Sokolova, digitalization is characterized by the creation of a digital form based on bits and bytes, for things familiar to us [3, Р. 93]. N. Meshko in his research argues that digitalization is characterized by the transformation of any kind of information into electronic form [4, Р. 128]. The author S. Korol says that "the formation of the digital economy in Ukraine should become a driving force to increase GDP and improve living standards" [5]. It should be noted here that digital transformation is often confused with automation or digitization of data, but this is not the case, because automation is only part of digitalization. With the development of technology and increasing information, automation does not have such a positive effect as digitalization because building effective business processes and increasing opportunities and is the main goal of business and society in modern conditions.

Digitalization of business is a very evolutionary and organic process, as more transparent rules of the game for business participants in the market appear, and participants understand the complexity of change, adapt to it and develop. Stronger companies act as generators of change, and weaker companies follow suit and improve [4, Р. 132].

Using digital technologies, each sector of the economy can grow faster, better and more efficiently. This causes a wide interest of scientists in the concept of digital economy and digitalization "[2, Р. 107]. According to A. Khripko and A. Domansky, digitalization is a way to digitize any kind of information [6]. O. Halapsis takes a slightly different position on this issue, defining digitalization not as a method, but as a process associated with the tendency to bring into electronic form of various types of information used by humans, a process tentatively called "digitization of being" [7]. Given these definitions, it is difficult to agree with the opinion of A. Koptelov, who distinguishes digitization ("digitization") from digitalization ("digitization"), interprets the latter as a process of creating a new product that originally exists in digital form and can't be transferred to physical media without a significant reduction in its quality [8]. At the same time, M. Ustenko says that digitalization is a radical transformation, which is expressed in the deep penetration of digital technologies into business processes, their optimization, increasing productivity and improving communication with consumers [9, P. 183]. G. Sokolova, researching aspects of the development of the national digital economy, noted that "digitalization is characterized as the creation of a digital (based on bytes and bits - minimally addressed units of information) version of analog things on paper documents, video and photos, sounds" [3, P. 94]. A. Gurenko notes that the main feature of digitalization is the creation of conditions for more comfortable and efficient interaction between business and consumers [10].

Currently, the main factors in the development of digitalization are: the emergence of new digital technologies, the formation of new needs and demands of consumers (focus on saving time, search and purchase of goods on clear parameters); creation of new values, properties of goods; changing conditions of the competitive environment [5; 6]. O. Hrybinenko understands digitalization as transformation, penetration of digital technologies for optimization and automation of business processes, increase of productivity and improvement of communication interaction with consumers [11]. M. Ustenko notes that the digitalization of business is becoming an inevitable trend, ignoring which becomes a sign of backwardness and inconsistency with modern requirements. Strategic measures to increase the competitiveness of any economic entity should be implemented in the plane of its digital dimension [9, P.188]. T. Lazorenko and I. Sholom note that the process of digitalization is characterized by transformation, introduction of digital technologies to optimize and automate business processes, improve communication with consumers and increase the efficiency of economic activity [17].

From the above we state that the definition of "digitalization" is interpreted by scientists as:

- the process of using, applying, transferring and translating information into digital format;

- system of data collection, storage, analysis, application of artificial intelligence;

- transformation of the penetration of digital technologies to optimize business processes.

The impact of digitalization on enterprise development should be considered using a synergetic approach, which is characterized by a high level of research methodology and takes into account all aspects of the problem in their relationship and

integrity, allows to distinguish the main from the essential, determine the nature of relationships.

It will be recalled that the synergetic approach is a method of interdisciplinary research within a systems approach. Systems research is a set of scientific theories, concepts and methods in which the object of study or modeling is considered as a system [12]. The systems approach is a scientific platform for the rational study and effective management of various systems, a set of methodological principles and provisions that allow us to consider the system as a whole with the coordination of all its subsystems. The system principle or system approach to economic processes is the recognition that any organization is a system consisting of parts, each of which has its own goals, so to achieve common goals of the enterprise can be considered if it is considered as a single system.

We highlight the following technologies that have the greatest impact on the digitalization of the economy:

- Internet of things and automation of production;

- digital design and modeling;

- mobile technologies and cross-channel communications;

- virtualization technologies: remote access, remote office, etc.

According to the study of global digitalization trends, the following rating of digital trends is displayed (as mentioned in the media): the first and second place in the ranking are occupied by mobile communications (Mobile Networks) and Artificial Intelligence, as basic technologies providing the current wave digitization. The high place of E-commerce in the ranking is a consequence of high investment activity and a large number of transactions in this segment [13].

Currently, there is a significant interest in the direction of digitalization, due to its competitive advantages, including:

- providing additional value of goods through quality service;

- high level of communication;

- improving the company's image;

- price reduction through process automation and digitization of business processes;

- transparency of internal and external processes of the enterprise [14].

At the same time, digitalization expands the information space by creating new information products, reduces information costs, speeds up and simplifies the search for information, its exchange and strengthens cooperation between companies, affects the operating methods of economic entities.

The interest are comparative data on the level of digitalization of the economy and society as a whole in different countries, which are contained, in particular, in the Rating of Global Digital Competitiveness [15]. The comparative assessment of countries in this ranking is based on their ability to perceive and effectively use digital technologies as a means of transforming regulatory practices, business models and society as a whole. This assessment is made using three complex factors, which have received generalized names: knowledge, technological environment, openness to the future.

In 2020, the United States held the top spot in this ranking, with all five of the best economies in the country, the index has not changed: the United States, Singapore, Denmark, Sweden and Hong Kong South Africa (Fig. 1).

As we can observe in Fig. 1 USA indicators are determined by knowledge factors and future openness related to scientific concentration (example, percentage of scientific and technical employment and use of robots in education and research and development work, capital (availability of venture capital), adaptive attitudes (e-participation) and business agility (world robots distribution or percentage of world robots).

Fig. 1. Dynamics of the digitalization level in the world according to a set of key indicators in 2020 [16]

The top ten economies remain unchanged. The United States leads the IMD World Digital Competitiveness Rating for the third year in a row, Singapore remains in second place, and Denmark is ahead of Sweden, rising by one place (3rd place and 4th respectively), South Africa Hong Kong rises three places to 5th. Switzerland falls to 6th place (from 5th) and similarly the Netherlands falls to 7th (from 6th). The Republic of Korea moves up to 8th (from 10th), Norway remains in 9th and Finland from 7th to the top 10.

Ukraine rises to two places from 60th to 58th, due to the acquisition of talent, digital / technological skills (from 40 to 27), electronic participation (from 53 to 39) and agility of companies (from 47 to 33) (see Fig. 2). In 2020, business conditions became particularly stringent due to quarantine conditions due to the COVID-19 pandemic. Most offline businesses were partially "frozen" and suffered losses.

Fig. 2. Dynamics of the digitalization level in Ukraine according to the assessment of a set of key indicators for 2015-2020 [18]

However, those companies that were able to adapt to the new business environment using digital tools for promotion and communication, made a profit and increased efficiency. In this context, digitalization is now an important tool for doing business and maintaining communication with consumers.

As pointed out by E. Guseva, the process of digitalization goes through three main stages [14]:

- first we need to analyze all business processes and strategic capabilities of the company, namely: to determine the effectiveness of departments, internal and external communications, to analyze how digitalization can affect their improvement. In order to minimize risks, it is necessary to form a strategy in which new technologies should not radically change business processes, but only simplify and improve them;

- in order to implement the plan, it is necessary to allocate either a team of employees or to involve specialists from outside. It

takes a lot of time and financial resources to implement new technologies - testing, technical error correction, staff training;

- after the implementation of each digital solution you need to conduct a detailed analysis of the effectiveness and profitability of these innovations, without compromising business.

According to A. Dligach, the main factors influencing the process of digital transformation of enterprises are the following [15]:

1. Formation of the concept. At the beginning of the transformation it is necessary to determine the main directions of one's own development. First, build a strategy, identify goals, resources, and processes that need to change.

2. Staff. According to sociologists, in Ukraine only 4% of employees are ready for digital transformations and experiments, and 88% want to leave everything unchanged, following the years of established models, so we see that most staff resist change, trying to fail innovations. In order for this not to happen and the digital transformation to be successful, it is necessary to gradually prepare employees for digitalization, to teach new technologies and processes, so that they are the initiators of change with creative ideas.

3. Outdated technologies. In the conditions of digitalization, enterprises should abandon old technologies, which take time and resources, and gradually switch to newer methods of doing so. We need to join forces for digital transformations of our own business processes and to follow the leading companies that have managed to achieve significant results through digitalization.

The state of digital transformation in enterprises can be described as follows [17]:

- more than 60% of companies already use digital technologies for customer needs;

- up to 20% are just starting to get acquainted with digital and take the first steps towards implementation;

- about 15% of companies attract and serve customers using digital technologies;

- only 3-4% of companies are fully digitalized.

With the help of fig. 3 we present the main competitive advantages of digitalization of enterprises and its disadvantages, which we have identified on the basis of generalization of the authors [14; 17].

Fig. 3. The main advantages and disadvantages of enterprises digitalization

The realities show that such areas need digital transformation as retail, banking, education, medicine, energy, construction, etc. The most common solutions that promote digitalization in the country are: Internet of Things infrastructure, identification and trust infrastructure (citizen ID, bank ID, Mobile ID), open data infrastructure, public services and e-government infrastructure, ecommerce and e-business infrastructure, transaction processing infrastructure (online payments, cashless tools, fintech services),

life support infrastructure, is digital medical, educational, security, transport, logistics services), geographic information and spatial infrastructure, industrial digital infrastructures (Industry 4.0, cybersystems and cybersecurity) [16; 18].

Important of the external manifestations of digitalization is the widespread use of digital - information and communication technologies (ICT) - a set of processes and methods of interaction with information carried out using computer devices and telecommunications.

As a rule, today many companies do not use all areas and opportunities of digitalization. Most often, they are adopted by certain digital technologies, which leads to a delay in their digital development, and therefore, their competitive advantages are reduced. The development of digital business processes in domestic enterprises will contribute [14]:

1) training of qualified personnel specializing in electronic communications;

2) development of new services for convenient delivery of online orders covering regions;

3) development and improvement of electronic payment systems;

4) optimization of business processes in the field of logistics and sales.

The growth rate of digitalization of enterprises directly depends on the institutional environment of the country in terms of public policy, laws and regulations, fiscal instruments. Accordingly, the long-term lack of innovation base in the state economy, the reluctance of large and medium-sized businesses to invest in innovative projects weaken the digital transformation.

Conclusions

As a result of the synergetic approach, complex substantiation, generalization and analysis of theoretical aspects and pragmatism in the context of domestic realities concerning influence of digitalization on development of the enterprises it is possible to state:

1. Digitization is evolving at an incredible rate, with the help of which huge amounts of information (digital data) are collected, used and analyzed, which remain on various digital platforms as a result of the activity of individuals, social groups or enterprises.

2. It is proved that digitalization penetrates almost all spheres of industry and services, forms irreversible changes in the management of companies, improving their financial and economic activities, makes them flexible and competitive in the market, provides organizations with significant opportunities for further effective development and acts effectively.

3. It is investigated that the development of information technologies and means of communication, first of all electronic networks, has created a powerful impulse for formation of a new tendency of functioning of modern business - digitalization of economic relations. The main advantages of digital transformation for enterprises are: optimization of business processes, the ability to earn, customer focus. ICT help to motivate employees, develop creative thinking, also save time, multimedia and interactivity contribute to better presentation and assimilation of information provided.

4. It is accepted that communication links, motivation systems, outdated technologies and standard solutions that have taken place in the recent past have lost their significance. In the conditions of permanent changes it is appropriate to adhere to the directions of innovative development of enterprises, including digital environment, digital management, digital culture and digital strategy.

5. It is noted that in the digital world, the winners are those companies that can offer a value that would meet consumer demand. The development of digital technologies in the country is an important way to improve the business infrastructure, which affects and determines the pace of development of the enterprise and the country as a whole. Digital transformation helps to increase employee motivation, save time, simplify business processes, then both the consumer and the company will benefit from this.

6. It is outlined that to maintain the competitiveness of enterprises it is necessary to use the opportunities of digitalization in all possible areas and forms: customer experience; partnership and collaboration; work with data; introduction of innovations; HR strategy and culture; value management, etc.

7. It is stated that the variability of the external environment requires the company to constantly comply with world standards and trends, providing competitive advantages that will contribute to the stability of its activities.

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