Digital Transformation in SMEs Beyond the AI Hype: Approaching Digitization Strategically

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LEVACO Chemicals Chempark Leverkusen

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The chemical producer Levaco Chemicals demonstrates how digital transformation can succeed in SMEs and why strategic integration is the first important step.

While corporations with large budgets and IT departments drive digital transformation projects, medium-sized businesses often have to achieve similar efficiency gains with limited resources to remain competitive. The key to a successful transformation is a strategic approach: technology can only unfold its potential when it is considered alongside organization, processes, and people. Digitization thus becomes an integral part of the corporate strategy: moving away from IT project thinking toward a transformative approach.

From IT Project to Transformation

Specifically, this means that digitization must no longer be reduced to IT simply taking and implementing the requirements of individual departments. This approach inevitably leads to a patchwork of isolated solutions that have local effects but do not make a noticeable contribution to the overall organization. Instead, a holistic approach is needed—with a clear architecture, seamless processes, and coordinated data flows.

The problem is not a lack of available solutions on the market but rather a lack of clarity about where and how digitization, along with technologies like artificial intelligence, can bring real value to a specific business model. Many companies feel the pressure to seemingly follow the hype now to avoid falling behind. However, a rushed approach is counterproductive as it can lead to the aforementioned isolated solutions. Instead, an integrated approach requires a step-by-step process: from the company vision to a digitalization target model, to specific use cases with measurable value contributions—and only then to scalable solutions.

Strategic anchoring: The Digital Transformation Office

To centrally coordinate this path, the SME Levaco has created a structure tailored to the company: a central project office focused on "digital transformation."

Unlike typical models, it is deliberately not embedded as a traditional IT department. Instead, the Project Office operates strategically, cross-functionally, and assumes organizational responsibility: from prioritization and change management to the implementation of new technologies. The specialist departments remain drivers for use cases. Through the holistic approach, platforms and data streams can be optimally integrated, redundancies avoided, and automation as well as AI specifically utilized.

Flagship Project in Procurement

Especially for specialized companies that act as innovation leaders, data is the raw material for competitive advantages. Those who succeed in centrally connecting and specifically analyzing the data generated during the innovation process along the workflows can make faster, more precise, and well-founded decisions. The current AI hype noticeably lowers the barriers here: tasks that previously had to be laboriously modeled and manually analyzed by experts can now be derived much more easily, quickly, and cost-effectively from existing data thanks to AI-supported tools. This turns information into immediately usable knowledge—in a depth that was unattainable for many medium-sized businesses just a few years ago.

Levaco has derived two guidelines as the foundation for digital transformation: One Single Point of Truth: This is actually a given, but it must be practiced consistently. It requires one central, consistent data source for all areas. Key questions for every decision are:

• How does this system and data source contribute to ensuring the quality, consistency, and timeliness of our company data?
• What role does this data source play in our overall architecture to make information accessible and usable company-wide?

Platform Architecture and Clean Core: The focus here is on a clear system architecture to avoid unnecessary complexity. The major challenge—especially for medium-sized businesses and specialized B2B providers—is to meet individual customer requirements with flexible processes, while avoiding labor-intensive special processes. Modular solution approaches are suitable for this, enabling customization as standard and utilizing no-code and low-code approaches.

These two guidelines provide the framework for Levaco to develop the appropriate solution architecture in the first use case – a procurement project. In the first step, the focus is primarily on reducing repetitive tasks:

• Automated processing of offers
• Digital price inquiries
• Intelligent delivery date management
• Automated order dispatch

The vision: A 30 percent increase in procurement efficiency with significantly higher transparency of all processes.

Why Flagship Projects Are Indispensable

Flagship projects make digital transformation tangible: visions turn into visible results. They demonstrate in everyday operations how processes can be reimagined, automated, and made more efficient – and provide transferable models for other areas. This creates clear evidence that a strategy works and is scalable.

At the same time, they highlight that a transformation not only introduces new tools and processes but also changes the way of working: administrative tasks take a backseat, while analytical and strategic skills are increasingly in demand.

Strategy Beats Technology

Digital transformation requires more than individual IT projects—it needs a clear, strategic structure. A central Project Office can embed the transformation concept, consolidate initiatives, and set the direction. At the same time, IT affinity becomes a key competence across all departments. Those who establish these foundations leverage the agility of medium-sized businesses, build sustainable digital structures, and strengthen their market position.

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*Nina Herten is a project manager for digital and organizational processes at Levaco Chemicals GmbH.