While 84% of global companies claim that digital transformation is crucial to their survival over the next five years, only 3% have brought about transformation initiatives that involve the entire corporate organization. This is stated by a new SAP study conducted with Oxford Economics.
The results show a potential risk for companies that are lagging behind in digital transformation: those that have embarked on important digital transformation processes have reported significantly higher market shares (85% vs. 41%) and higher profitability (80% vs. 53%). The companies identified by the firm as Leaders expect to get about 23% more revenue growth over the next two years than the rest of the organizations considered. Research has also revealed that digital transformation is indicated as one of the three most important factors for future revenue growth, regardless of the sector and size of the company.
SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart is the most comprehensive study of its kind. Based on data from interviews involving more than 3,000 high-level executives in 17 countries and regions, the study illustrates the challenges, opportunities, value and key technologies that drive digital transformation. The results also identify the 100 most advanced companies called Digital Leader – the best way to connect people, things, and business.
What characterizes a Digital Leader
Digital leaders have four basic features:
- They interpret digital transformation as a transformation of the business model, not as a technology project: 96% of Leader claims that digital transformation is a core business core, compared to 61% of all others. The transformation extends to the entire company, also to the ways of interaction with customers, suppliers and partners.
- Give priority to talent: 71% of Leader says that digital transformation initiatives make it easier to attract and retain talent, compared to 54% of the total sample. Digital Leader also invests more to re-qualify its staff than other companies.
- They adopt a new digital infrastructure: 72% of Leader states that a bimodal IT architecture – including a mix of front-end and back-end infrastructures that can work at more speed to meet different business needs – is important for digital transformation, compared to 30% for all others.
- Invest in innovative technologies: 50% of Leader is already working with Artificial Intelligence and Machine Learning, compared to 7% of the sample. He is also investing more in Big Data and Analytics (94% vs. 60%) and Internet of Things (76% vs. 52%).
“Digital transformation is no longer a choice, it is an essential factor in generating income, profits and growth,” said Vivek Bapat, senior vice president, SAP Global Lead of Marketing Strategy and Thought Leadership. “Business executives must no longer only realize that gaming is high, but put into practice end-to-end initiatives that involve the whole company. This requires highly innovative technologies, investment in digital skills and staff upgrading. The next two years will be a major breakthrough: the winners of the digital challenge will emerge, while the others will be back. “