{"id":13799,"date":"2017-07-11T12:00:59","date_gmt":"2017-07-11T10:00:59","guid":{"rendered":"http:\/\/timoelliott.com\/blog\/?p=13799"},"modified":"2017-07-11T11:45:33","modified_gmt":"2017-07-11T09:45:33","slug":"new-study-digital-transformation-is-about-how-rather-than-what","status":"publish","type":"post","link":"https:\/\/timoelliott.com\/blog\/2017\/07\/new-study-digital-transformation-is-about-how-rather-than-what.html","title":{"rendered":"New Study: Digital Transformation Is About &#8216;How&#8217;, Not &#8216;What&#8217;"},"content":{"rendered":"<p><span class=\"embed-youtube\" style=\"text-align:center; display: block;\"><iframe loading=\"lazy\" class=\"youtube-player\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/mAH-RtID4ZY?version=3&#038;rel=1&#038;showsearch=0&#038;showinfo=1&#038;iv_load_policy=1&#038;fs=1&#038;hl=en-US&#038;autohide=2&#038;wmode=transparent\" allowfullscreen=\"true\" style=\"border:0;\" sandbox=\"allow-scripts allow-same-origin allow-popups allow-presentation allow-popups-to-escape-sandbox\"><\/iframe><\/span><\/p>\n<p>A new <a href=\"http:\/\/www.sap.com\/execstudy\" target=\"_blank\" rel=\"noopener noreferrer\">Digital Transformation study from SAP<\/a>, supported by Oxford Economics, was released today at the <a href=\"http:\/\/events.sap.com\/de\/leonardolive\/en\/home\" target=\"_blank\" rel=\"noopener noreferrer\">SAP Leonardo Live<\/a> event in Frankfurt.<\/p>\n<p class=\"p1\">The survey of over 3,000 executives in 17 regions around the world &#8212; one of the largest of its kind &#8212; reveals that 84% say digital transformation is critical to their survival in the next five years. But only 3%\u00a0have completed company-wide transformation efforts.<\/p>\n<p class=\"p1\"><a href=\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2017\/07\/SAP-Digital-Transformation-Study-Progress-1.jpg?ssl=1\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"alignnone size-medium wp-image-13812\" src=\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2017\/07\/SAP-Digital-Transformation-Study-Progress-1.jpg?resize=608%2C377&#038;ssl=1\" alt=\"\" width=\"608\" height=\"377\" srcset=\"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2017\/07\/SAP-Digital-Transformation-Study-Progress-1.jpg?resize=608%2C377&amp;ssl=1 608w, https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2017\/07\/SAP-Digital-Transformation-Study-Progress-1.jpg?resize=768%2C476&amp;ssl=1 768w, https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2017\/07\/SAP-Digital-Transformation-Study-Progress-1.jpg?w=1000&amp;ssl=1 1000w\" sizes=\"auto, (max-width: 608px) 100vw, 608px\" \/><\/a><\/p>\n<p>The top 100 or so\u00a0companies that report the most transformation say they&#8217;re getting big benefits: 85% say they&#8217;ve seen increased market share (vs. 41% for the rest), and 80% say their efforts have increased profitability (vs. 53% for the rest). They also expect to see more revenue growth over the next two years than the rest of the organizations surveyed.<\/p>\n<p>The leading organizations turn out to be different from the others in four key ways:<\/p>\n<p><strong>They are focused on true transformation.<\/strong> 96% of the leaders say digital transformation is a core business goal, compared to 61% percent of all others.<\/p>\n<p>The leaders have a &#8220;digital engagement first&#8221; mindset,\u00a0rather than a &#8220;product first&#8221; mindset, with greater emphasis on changing the company as a whole by improving digital skills and increasing employee engagement.<\/p>\n<p>This is clear when it comes to how they&#8217;ve restructured their business for innovation: five\u00a0times more\u00a0of the leaders say they have changed their operations as a direct result of digital transformation, and seven times more\u00a0report a significant impact on how they work with their partner ecosystems.<\/p>\n<p><strong>They transform customer-facing functions first.<\/strong>\u00a0Almost all digital transformation efforts attempt to improve the customer experience. But almost twice as many of the leaders cite customer empowerment as a key global trend, and 92% report that they have mature digital transformation strategies and processes in place to improve the customer experience vs. just 22% for all others.<\/p>\n<p>The efforts of the leaders pay off: three times as many have seen significant or transformational value from digital transformation in customer satisfaction and engagement.<\/p>\n<p><strong>They are talent driven.<\/strong>\u00a0Leaders spend more both on hiring and on retraining workers\u00a0than their peers. They are also significantly more likely to favor flatter, more agile organizational structures.<\/p>\n<p>All this leads to a virtuous circle of new digital talent acquisition: over three times as many of the leaders say that their employees are more engaged thanks to digital transformation, are more likely to say that these\u00a0efforts make it easier to attract and retain talent.<\/p>\n<p><strong>They invest in next-generation technology using a bi-modal architecture.<\/strong> The leaders, perhaps unsurprisingly, are ahead in technology maturity, but it&#8217;s mainly about new ways of working.<\/p>\n<p>93% of the leaders say technology is critically important to retaining competitive advantage, compared with\u00a072% of others. They are investing more heavily in big data and analytics (94 percent vs. 60 percent), and the internet of things (76 percent vs. 52 percent). And 50% percent of them are already working with artificial intelligence and machine learning, compared to 7 percent of all others.<\/p>\n<p>But the key difference is how that they apply that technology: 72% of leaders say that a bi-modal IT architecture \u2013 involving a mix of front-end and backend infrastructure, able to operate at multiple speeds for multiple business needs \u2013 is important to digital transformation, compared to 30% of others.<\/p>\n<p>The organization structures used to implement technology are also different, with leaders overwhelmingly favoring a more centralized approach. They are three times more likely to have a dedicated group for digital transformation or implement change using existing business-focused IT organizations. The others are much more likely to see\u00a0efforts scattered across operations, finance, and other functional units.<\/p>\n<h3><strong>What next?<\/strong><\/h3>\n<p>So far, as <a href=\"http:\/\/twitter.com\/pbakey\" target=\"_blank\" rel=\"noopener noreferrer\">Pat Bakey<\/a> put it at SAP Leonardo Live:<\/p>\n<blockquote><p>&#8220;We see sparks of innovation happening but we haven\u2019t seen the big bonfires of opportunity&#8221;<\/p><\/blockquote>\n<p>It&#8217;s time for IT organizations to accelerate digital transformation beyond small &#8220;islands of innovation&#8221; and adopt a more holistic, centralized approach. Most companies, faced with digital transformation, are changing <em>what<\/em>\u00a0they do, but not <em>how<\/em>\u00a0they do it.<\/p>\n<p class=\"p1\">What sets the leaders apart is that they have internalized the need to transform how they think as well as what they do \u2013 to create a digital mindset across the organization.<\/p>\n<p class=\"p1\">Digital transformation will determine the future of business, so it cannot be incremental or be considered independently from the operating model. In the end, what the\u00a0survey shows most clearly is that companies that treat digital transformation as another IT project will not just fall behind. They will fail.<\/p>\n<p>As Vivek Bapat, Senior Vice President, Global Head of Marketing Strategy and Thought Leadership at SAP puts it:<\/p>\n<blockquote><p>&#8220;The next two years will be a key inflection point, which will separate the digital winners from those left behind. Digital transformation is no longer a choice, it\u2019s an essential driver of revenue, profit and growth. Executives need to move from simply understanding the high stakes, to activating complete end-to-end execution across their business. This requires innovative breakthrough technologies, investing in digital skills, and retraining the existing workforce.&#8221;<\/p><\/blockquote>\n<p>To get all the detailed data from\u00a0the study, visit <a href=\"http:\/\/www.sap.com\/execstudy\" target=\"_blank\" rel=\"noopener noreferrer\">www.sap.com\/execstudy<\/a>. For more information, visit the <a href=\"http:\/\/www.news.sap.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">SAP News Center<\/a>. Follow SAP on Twitter at <a href=\"http:\/\/twitter.com\/digitalistmag\" target=\"_blank\" rel=\"noopener noreferrer\">@digitalistmag<\/a> and <a href=\"http:\/\/twitter.com\/sapnews\" target=\"_blank\" rel=\"noopener noreferrer\">@sapnews<\/a><\/p>\n<h3>SAP Leonardo<\/h3>\n<p>SAP recently launched SAP Leonardo, specifically to help\u00a0organizations with digital transformation at scale to redesign their business. It&#8217;s a digital innovation system that helps you take a step away\u00a0from evolving\u00a0your current\u00a0technology landscape\u00a0and concentrate\u00a0on\u00a0the &#8220;how&#8221; of new innovation.<\/p>\n<p>SAP Leonardo is not a product, it&#8217;s a new way of working, to implement customer-experience-focused, best-practice solutions using the latest technologies such as internet of things, artificial intelligence, and blockchain. SAP Leonardo includes the ingredients and recipe to organizations need to implement innovation\u00a0in new ways, including more agile, iterative approaches.<\/p>\n<p>To find out more, visit <a href=\"http:\/\/sap.com\/leonardo\" target=\"_blank\" rel=\"noopener noreferrer\">sap.com\/leonardo<\/a> or read a longer post\u00a0about <a href=\"https:\/\/timoelliott.com\/blog\/2017\/06\/sap-leonardo-is-not-a-product-heres-why-thats-important.html\" target=\"_blank\" rel=\"noopener noreferrer\">how it works and why it&#8217;s different<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A new Digital Transformation study from SAP, supported by Oxford Economics, was released today at the SAP Leonardo Live event in Frankfurt. The survey of over 3,000 executives in 17 regions around the world &#8212; one of the largest of its kind &#8212; reveals that 84% say digital transformation is critical to their survival in [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":13817,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[14],"tags":[382,390,1289,1288],"class_list":["post-13799","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-thoughts","tag-digital","tag-digital-transformation","tag-oxford-economics","tag-sap-digital-transformation-study"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/timoelliott.com\/blog\/wp-content\/uploads\/2017\/07\/the-digital-mindset.jpg?fit=1000%2C678&ssl=1","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p3X9RF-3Az","_links":{"self":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts\/13799","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/comments?post=13799"}],"version-history":[{"count":0,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/posts\/13799\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/media\/13817"}],"wp:attachment":[{"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/media?parent=13799"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/categories?post=13799"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/timoelliott.com\/blog\/wp-json\/wp\/v2\/tags?post=13799"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}