Digital transformation is a term tossed around by many but understood by few. Business folks sometimes think that simply adopting the latest and greatest technology will allow them to reap the benefits of new initiatives and capabilities such as Industry 4.0 and the Internet of Things (IoT). But digital transformation encompasses more than that.

With the increasing amount of information available, it is no surprise that organizations must also transform their business processes and even their business models to stay competitive in the digital world. This transformation not only challenges IT departments to reevaluate their infrastructure to ensure that the right technology is in place, but also demands that businesses innovate their processes to reflect the multitude of ways customers are interacting with their brand. To see where SAP customers stand in their path to digital transformation, DSAG recently conducted a survey of 357 IT directors and professionals from DSAG-member companies in Germany, Austria, and Switzerland.

Roadmap Needed for Digital Transformation

The survey results showed that many companies are still in the early stages of digital transformation and are in need of help understanding how it can provide value to their business. Fifteen percent of respondents said that they are implementing solutions for digital transformation, IoT, and Industry 4.0, while another 32% said they were evaluating such technologies. DSAG expects interest in these areas to increase in the coming months, but companies are looking for a clear roadmap that outlines how to get the most from their investments.

A critical piece of digital transformation that will also need to be addressed is security: If companies cannot be sure that their data is secure, they may hesitate to move toward digital transformation for fear of economic espionage. This is especially true in Europe, where data security regulations are stricter. The EU Access service from SAP ensures that data kept in European computer centers is accessible only in Europe. This helps European companies facing regulations regarding data storage and access to be able to leverage the cloud more confidently.

Technology in the Digital Economy

To adapt to the digital economy, SAP has released its next-generation business suite, SAP Business Suite 4 SAP HANA (SAP S/4HANA). Companies in the DSAG survey reported strong results from their traditional SAP Business Suite functionality, with over 70% saying it was very important to the company’s business strategy. As customers research and evaluate SAP S/4HANA, SAP should provide not only use cases that show the value of SAP S/4HANA, but also use cases that show the value of digital transformations, so customers will be motivated to upgrade from their classical implementations.

Going Forward

Companies are still evaluating what it means to digitally transform. IT departments must continue to consider all aspects of the transition before realigning current investments or investing in new technology. Proper research and planning should be the foundation for any digital transformation strategy. IT and the business must collaborate to pursue what is best for the company, and make measured decisions on the technology and business model that is right for them.