SAP Study Reveals Four Key Traits of a Digital Transformation Leader

While 84 percent of global companies say that digital transformation is critical to their survival in the next five years, only three percent have completed company-wide transformation efforts, shows a new study from SAP SE (NYSE: SAP).

The study, supported by Oxford Economics, was released at SAP Leonardo Live, held July 11–12 in Frankfurt, Germany.

Significantly, the results could spell possible peril for companies lagging in digital transformation: those that have embraced mass digital changes reported significantly higher levels of market share (85 percent vs. 41 percent) and profitability (80 percent vs. 53 percent). Companies named as the leaders in the survey expect to see roughly 23 percent more revenue growth over the next two years than the rest of the organizations surveyed. The study also found that digital transformation was cited as a top-three driver of future revenue, across all industries and among companies of all sizes.

SAP Digital Transformation Executive Study: 4 Ways Leaders Set Themselves Apart” is the most comprehensive of its kind. Based on survey results from more than 3,000 senior executives across 17 countries and regions, it identifies the challenges, opportunities, value and key technologies driving digital transformation. The results also identify the Top 100 companies — called Digital Leaders — who are best at connecting people, things and businesses.

Traits of Digital Leaders

Digital Leaders hold four key traits. They:

  • See digital transformation as truly transformational: 96 percent of Leaders say digital transformation is a core business goal, compared to 61 percent of all othersThe transformation extends through their company, to how they interact with customers, suppliers and partners.
  • Focus on customer-facing functions first: 70 percent of Leaders say digital transformation is already delivering increased customer satisfaction vs. 22 percent of all others. The customer experience is the gateway to a successful digital transformation.
  • Prioritize talent: 71 percent of Leaders say that digital transformation efforts make it easier to attract and retain talent vs. 54 percent of all others. They also spend more on retraining the existing workforce than their peers.
  • Invest in next-generation technologies: 50 percent of Leaders are already working with artificial intelligence and machine learning, compared to 7 percent of all others. They are also investing more heavily in Big Data and analytics (94 percent vs. 60 percent) and the Internet of Things (76 percent vs. 52 percent). Using a bimodal IT architecture lets them run legacy systems efficiently while rapidly integrating new technologies.

“Digital transformation is no longer a choice, it’s an essential driver of revenue, profit and growth,” said Vivek Bapat, senior vice president, global head of Marketing Strategy and Thought Leadership, SAP SE. “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. The next two years will be a key inflection point, which will separate the digital winners from those left behind.”