Let’s play a game. Do an online search for the term “digitally mature business.” When I did, it returned “about 3,520,000 results.” That’s how much information is out there detailing where businesses are in terms of their digital “readiness.” While this gives IT solutions providers decent insight into where they should start prospecting, it makes me wonder … What might we learn if that same scrutiny was placed on a partner’s business?
IDC’s research on the SAP partner economy uncovered some interesting facts. Based on partner surveys, IDC has found that the majority of IT solutions providers (about 54 percent) are only in the early stages of digital transformation. Of those, about 18 percent can be described as “digital explorers,” those who have invested in technologies, but have poorly integrated them into their operations. The other 36 percent are categorized as “digital players,” companies that have integrated technology into their operations, have achieved consistent experiences, but lack innovation.*
Only about one-third can be called “digital disruptors,” businesses that offer innovative products and services — and use their digital capabilities to capitalize on opportunities and create new ones.
Barriers to Digital Transformation
Many solutions providers are only tapping on the door to digital transformation – they’re not knocking it down. It takes vision and work to overcome barriers to digital maturity:
- Finding or training people with digital skills
- Letting go of legacy processes
- Adopting a new organizational structure free of silos and
- Building a culture that accepts risk and encourages innovation
Beyond these objectives, businesses on their transformation journey have the added challenge of continuing to drive business during the process.
Paul Edwards, director of Software Channels and Ecosystems at IDC, commented, “This is why it’s important to have a planned approach to transformation. It’s important to focus on one area before starting another to prevent spreading your business too thin.”
What Does It Mean to Be a Digitally Mature Business?
Solutions providers who fall into the “digital disruptor” category are distinct in several ways.
Most importantly, their organizational structure has evolved to support digital transformation. Their top business priority is a high investment in intellectual property, and they project high revenue growth from their intellectual property.
In my conversation with Mickey North Rizza, program vice president, Enterprise Applications for IDC, she explains how digitally mature companies are using their new capabilities to provide IT and business services. “They’re selling their own areas of expertise on top of what they’re doing through SAP,” she said.
They monitor key performance indicators (KPIs), achieve performance improvement through automation, and ensure that KPIs related to customer satisfaction have top priority.
And they stand out in another notable way: They’re more profitable than their counterparts who are still in the early stages of digital transformation.
Advancing to Digital Maturity
Businesses in every vertical market are looking for trusted advisors who can partner with them on their digital transformation journeys. IT solutions providers who haven’t made the journey themselves lack the experience and insight necessary to guide them.
IDC surveys reveal that about 13 percent of solutions providers are resisting digital transformation and are positioned to lose business to their digitally mature peers. Digital transformation can, however, begin today with a leadership decision and strategy. Consider your customers’ long-term goals and their vision of digital maturity, and then ensure your business aligns with them.*
*IDC Software Partner Survey, 2018 n=500