Germany’s economy is undergoing a digital transformation. In 2024, the Digitalization Index rose to 113.6 points, up from 108.1 the previous year. Based on 36 key indicators, the index highlights two main trends: first, that the digital transformation of Germany’s economy is progressing steadily—and second, that there’s still room for improvement, particularly in the digitalization of business processes.

In this article, we’ll explore what process digitalization means, which types of business processes can be digitalized, and how to go about it. We’ll also look at the benefits digitalizing processes can offer businesses in Germany.

What’s in this article?

• What does process digitalization mean?
  
• Which processes can be digitalized?
  
• What are some examples of process digitalization?
  
• What are the advantages of process digitalization?
  
• How can businesses digitalize their processes?
  

What does process digitalization mean?

The Federal Ministry for Economic Affairs and Energy defines digitalization as “the use of data and algorithmic systems for new or improved processes, products, and business models.” One of the key advantages of digitalization is the scalability of data. Through digitalization, data can be accessed and reused simultaneously by multiple stakeholders, enabling greater efficiency and innovation.

The four dimensions of digitalization

Federal Ministry for Economic Affairs and Energy divides digitalization into four dimensions:

• Digital products
  
• Processes
  
• Networking
  
• Business models
  

The ministry further describes digital processes as a “data-based representation of reality for organizing and controlling processes.” There is also a distinction between businesses that have a high level of digital maturity and those at a lower level. Businesses are deemed to have a high level of digital maturity if they map complete processes as digital models, allowing them to observe processes and control them automatically. Those with a lower level can capture and display data for orders or inventory, but are not quite as thoroughly digitalized.

Process digitalization vs. process automation

Process digitalization refers to transforming analog workflows into digital ones using modern technologies. With this shift, human tasks are supported—or in some cases replaced—by computer-based systems to improve efficiency, speed, and accuracy.

Process digitalization should not be confused with process automation, however. While automation focuses on simplifying tasks through machines or robots—often enabling certain steps to be done automatically—these processes might still involve manual input and might not be fully digital. In contrast, process digitalization means that workflows exist entirely in digital form. They’re no longer paper-based or physical. But that doesn’t mean they’re fully automated—digitalized processes can still require human involvement at certain stages.

Which processes can be digitalized?

Businesses in Germany can digitalize many different processes. Not only does digitalization enable businesses to optimize existing processes—it also allows them to establish completely new processes using artificial intelligence (AI) and machine learning. Below, we’ll look at a few of the processes that businesses in Germany can digitalize.

Invoicing

Paper invoices are becoming a thing of the past. Digital solutions enable automatic invoicing, direct delivery to customers, and seamless integration into accounting systems. This not only saves time and money, but also reduces errors and makes payments easier to trace. Businesses also benefit from a better overview of their finances and faster processing of transactions.

Stripe can help businesses in Germany digitalize their invoicing process with Stripe Invoicing. This tool allows businesses to create and send their invoices quickly and easily, all while maintaining compliance with the law. Stripe Billing enables recurring invoicing as well as clear account management. In addition, the Stripe dashboard provides direct access to detailed financial and sales reports.

Payment processing

Businesses in Germany can also digitalize their payment processes. Digital systems enable faster and error-free processing of transactions, reduce manual effort, and minimize the risk of payment defaults. Modern payment solutions, such as Stripe Payments, let businesses easily accept and manage all payments. With Stripe, buyers benefit from a fast, one-click checkout, and a wide range of more than 100 payment options.

Brick-and-mortar stores can offer cashless payments using card readers or mobile devices. To enable card payments, businesses can use Stripe Terminal pre-certified card readers such as the S700, or mobile devices such as the BBPOS WisePad 3. Additionally, Tap to Pay allows businesses to accept cashless payments via an iPhone or Android device.

Accounting

By taking a digital-first approach to accounting, German businesses can automate administrative processes, reduce sources of error, and increase efficiency. Among other things, modern accounting software allows businesses to automatically record receipts, link payments directly to invoices, and manage tax-relevant data in real time. This eliminates the need for tedious manual work and allows businesses to always keep track of their finances.

Digital solutions prove particularly useful when it comes to taxes. With Stripe Tax, businesses can automatically calculate, collect, and report taxes for global payments. This tax compliance solution determines the correct tax amount in real time and provides all necessary documentation for tax refunds.

Internal and external communication

Process digitalization also offers clear advantages to both internal and external communication. Online meetings allow for quick, location-independent coordination with customers, partners, and employees. This virtual alternative to in-person meetings boosts flexibility while cutting down on travel time and costs.

Internal collaboration also improves with digital tools. Cloud-based platforms enable teams to work on documents simultaneously, store information in a central location, and access important files from anywhere. The result is more efficient, transparent, and agile teamwork. By strategically using digital communication and collaboration tools, businesses can streamline their workflows and boost overall productivity.

Marketing and sales

Online visibility plays a huge role in marketing and customer outreach. Search engine optimization (SEO), targeted advertising, email marketing, and social media campaigns can significantly boost a business’s reach and customer loyalty.

The use of customer relationship management (CRM) systems enables businesses to systematically record and evaluate customer interactions. They also allow personalized marketing campaigns to be implemented efficiently. Data-based analyses can also improve the development of individual product offerings.

Logistics

Digitalizing logistics processes can significantly improve the efficiency, transparency, and cost-effectiveness of deliveries. For example, digital tracking technologies enable real-time shipment tracking and accurate delivery time predictions. Using AI and data-driven analysis, businesses can improve transport routes, reduce fuel consumption, and lower their CO₂ emissions.

Smart software solutions also make it possible to monitor inventory levels in real time. This tracking helps identify potential shortages early and automatically trigger reorders as needed. As a result, digitalizing inventory and warehouse management maximizes storage efficiency and minimizes the risk of overstocking or experiencing delivery delays.

What are some examples of process digitalization?

Digital invoicing systems

Digital invoicing processes show just how useful digitalization can be. Historically, businesses in Germany had to create invoices manually, printing them on paper and sending them in the mail. Recipients then had to check and process the invoices and archive them properly. This was a time-consuming process often marred by human error and delays.

Today, invoices can be created automatically after a product has been purchased, thanks to digital invoicing systems. Customer data is taken directly from the order form and no extra data needs to be entered manually. Invoices are then sent to customers automatically via email. They can also be automatically saved in a business’s accounting system and forwarded to the relevant tax authorities. Thus, digitalizing the invoicing process doesn’t just save businesses paper: it saves them time and money as well.

Project planning and management

Project planning and management is another area that is rife with opportunity for process digitalization. Before, businesses had to manually review various documents and information, possibly causing delays or misunderstandings. Today, however, digital project management tools can significantly improve project planning, coordination, and monitoring.

Using these tools, businesses can store all relevant data centrally, e.g. appointments, tasks, resources, and progress. Employees can access data whenever and wherever they want, using their smartphones. This saves time and resources while also ensuring that employees have access to the most current information possible. During customer appointments and field assignments, reports and protocols can also be created and edited directly on a mobile device. This reduces the loss of information and improves communication between field staff and the administration.

What are the advantages of process digitalization?

Process digitalization offers plenty of advantages for businesses in Germany. Here is an overview of the key benefits:

• Transparency: All digital processes are transparent and traceable. Every decision, action, and transaction can be documented automatically. This allows for more precise control and supports compliance with rules and regulations.

• Faster workflows: Digitalization removes the need for manual intervention from many processes. This helps workflows move faster and can even reduce the number of steps for a given process.

• Flexibility: Digital systems enable businesses to respond more flexibly to changes and new requirements. Workflows can be quickly adapted and improved to better meet the needs of the market or customers.

• Error reduction: People make mistakes, especially when performing repetitive and monotonous tasks. Digital systems, on the other hand, perform large amounts of repetitive tasks without making human errors, leading to an increase in the quality of results.

• Improved data analysis: Digital information can be easily searched and analyzed using AI. This enables businesses to identify behavioral patterns and trends in their data, make predictions about future developments, and make strategic decisions on a more informed basis. In addition, data analysis can be used to identify and improve inefficient processes.

• Better use of resources: Digital processes enable resources to be planned and used more effectively. The right software provides data in real time and can identify bottlenecks or overcapacities at an early stage.

• Cost savings: While digitalizing business processes requires an initial investment, it can lead to significant cost savings over time. Faster, more efficient workflows free up employees to focus on higher-value tasks, boosting overall productivity and creating capacity for more strategic initiatives. Additionally, automating routine manual tasks can help reduce personnel costs and improve operational efficiency.

• Competitive advantage: Optimized workflows can make the difference between success and failure in a global market. Businesses that rely on digital processes can therefore gain a competitive advantage

How can businesses digitalize their processes?

Process digitalization should be part of a comprehensive digitalization strategy. This ensures that all individual measures are aligned with strategic corporate objectives. Process digitalization can be divided into individual, concrete action items as part of a wider digitalization strategy.

As a business owner, you should begin with a focused analysis of your existing processes. In this way, you can identify areas that can be optimized digitally. Depending on your industry, business size, and specific requirements, there are a variety of digital solutions that can be used, so it is important to conduct thorough research to select the right tools for your needs.

An all-in-one solution is rarely the best fit for every business. Tailored solutions are often more effective, as they can be designed to meet a company’s specific needs. These might include custom-built applications or a combination of specialized tools that work together seamlessly. Another key consideration when choosing digital tools is their long-term viability. Ideally, the selected software should not only address current requirements but also be flexible enough to adapt to evolving business conditions and emerging technologies.