There's More Than One Path To Digital Transformation

Paul Kurchina

Running a business is no longer as simple as getting a product to market and creating slick advertising to encourage customers to buy it. So much is coming so quickly from a variety of areas. More importantly, customers are asking to have products tailored to their specific needs and to engage with brands on their terms.

Instead of the company being in the driver seat, it’s customers who are flooring the gas pedal on the purchase highway without a speed limit. And as digital lifestyles continue to become the norm, companies must find new ways to engage customers in preferred channels. In fact, a recent study conducted by the Economist Intelligence Unit and sponsored by Pegasystems reveals that 96% of executives believe that the pace of change enabled by digital transformation is accelerating – with 62% indicating that the impact is significant.

How can any company ever keep up with these dynamics without imploding its operations, sales channels, and supply networks?

Digital transformation: Same goal, different mindset and approach

The ultimate purpose of every company is to grow revenue by running more efficiently, adapting to customers’ needs faster than the competition, and engaging with customers consistently. But how businesses approach those challenges can be vastly different than their rivals – both within and outside the boundaries of their traditional core industry.

In the recent Americas SAP Users’ Group (ASUG) Webcast, “What ASUG Members Are Saying About Their Digital Transformation Journeys,” China Martens, head of research at ASUG, reports the findings of a recent study of ASUG members, uncovering three distinct areas where digital transformation paths can diverge. 

1. Ideas on how to reinvent the business differ

While 40% of respondents consider digital transformation as an opportunity to reimagine the entire business operation (from the plant floor to customer service), the remaining 60% appear to be split on how best to define it.

“The next-largest group (23%) describes digital transformation as refocusing resources to become a customer-centric omnichannel business,” Martens cited.

For example, companies are adopting new subscription models to deliver their products as a service, instead of selling them outright. Not only does this new business model make every customer interaction extremely important, but it also creates an opportunity to build an ongoing customer relationship over the long term. As these services generate data that can provide insight into everything from buyer behavior to economic shifts and environmental changes, these same businesses may also find new ways to power a brand-new revenue stream and engage an entirely different customer segment.

Meanwhile, others believe the real advantage comes from transforming processes (18%) and harnessing massive amounts of information (6%). At the same time, there’s still more work to be done on explaining digital transformation – 13% view the term as a technology industry catch-all.

figure 1 opinions vary
Source:
“ASUG Research: How ASUG Members View Change and Digital Transformation in 2016,” Americas’ SAP Users’ Group, 2016. 

2. The road map is not the same for everyone

According to Martens’ research, companies are weighing their options in getting started with their digital transformation. “The largest group of respondents, 34%, believe the best plan is to transform across all business processes and departments from the get-go,” she observed. “This approach may take a while to achieve, but can also help to ensure that the entire company is on board with the strategy.”

Even more interesting is how businesses plan to move along their reinvention initiatives. “In our study, 30% of respondents said they plan to scope out a series of pilot projects, which will eventually span the entire company. They may see this approach as the easiest way to adopt new practices and replicate them throughout the business,” Martens said. “In contrast, a further 29% of respondents said a complete reinvention of processes, business models, and employee roles may be the best path to take to realize digital transformation.”

figure 2 scope of plans

Source: “ASUG Research: How ASUG Members View Change and Digital Transformation in 2016,” Americas’ SAP Users’ Group, 2016. Based on 460 respondents. Percentages are rounded. 

3. Leadership matters, but no one thinks that the right ones are leading it

Since digital transformation can have a direct impact on the survival and success of a brand now and in the future, getting the right leadership role at the helm of the initiative is of significant importance.

“One of the most intriguing findings from our survey was the difference in responses about who is currently leading company reinvention, as opposed to who ASUG members think should be heading up that project,” reflected Martens.

For nearly one-third (31%) of respondents, the CIO or highest-ranking IT executive currently has this responsibility, followed by the entire C-suite (17%) and the CEO (15%). However, it appears that many respondents disagree with burdening one role with leading digital transformation. In the survey, 32% indicated that they prefer to see a more collaborative, integrated approach that involves all areas of C-suite responsibilities. Others saw the CEO (21%) as the best leader for the initiative, while only 18% named the CIO.

figure 3 who does and who should lead 

Source: “ASUG Research: How ASUG Members View Change and Digital Transformation in 2016,” Americas’ SAP Users’ Group, 2016. Based on 460 respondents. Percentages are rounded. 

Digital transformation: It’s fast-paced, evolutionary, and uniquely yours

Change may be a fact of life, even in the business world. However, the pace is faster than anything we’ve ever seen, and the impact of these changes can go as deep as the core of the business. While best practices can help chart a path to digital transformation, the journey is inextricably yours – and yours alone. The key is having a trust partner and advisor at your side to help you chart your unique path and get underway.

What does your road map look like? Find out what some of our ASUG members said. Watch the replay of “What ASUG Members Are Saying About Their Digital Transformation Journeys,” one in a series of Webcasts examining perspectives, best practices, and advice on digital transformation hosted by ASUG.  

Image credit: ©Sdecoret | Dreamstime.com

 

 

 


Paul Kurchina

About Paul Kurchina

Paul Kurchina is a community builder and evangelist with the Americas’ SAP Users Group (ASUG), responsible for developing a change management program for ASUG members.