SAP partners can categorize customers and prospects in a variety of ways: size, spend, or vertical market. As industries advance in the digital transformation journey, however, there are two primary categories — the “digitally determined” and “digitally distraught” — that will help you approach marketing, services and consulting more intelligently.
How to Spot a Digitally Determined Company
IDC classifies businesses who are leaders in digital transformation as digitally determined.1 These organizations are full steam ahead on digital transformation and have strategically put the right people, processes, and technology in place to make their visions reality.
The IDC FutureScape: Worldwide Digital Transformation 2019 Predictions (Doc # US43647118, October 2018) tell us that by 2020, at least 55 percent of organizations will be digitally determined. As these companies accomplish their objectives, you’ll see notable changes, including:
- By 2020, 80 percent of enterprises will create data management and monetization capabilities.
- By 2020, 30 percent of the G2000 will implement digital twins of operational processes for more intelligent decision making.
- By 2023, 35 percent of workers will interface with bots or other forms of AI.
- By 2021, 30 percent of manufacturers and retailers will build trust through blockchain technology.
Mickey North Rizza, program vice president, Enterprise Applications for IDC training and education, added that digitally determined companies “have a capital budget, and they’re not afraid to take 10 percent of that to become digitally transformed.”
On the other side of the spectrum, IDC describes digitally distraught companies as organizations that are lagging behind their digitally determined counterparts. Rizza explained that these companies are also inclined to use a portion of their capital budgets to invest in a digitally driven future, but their primary objective for implementing new technology is cost reduction now, rather than advancing digital transformation.
Key to Success: Take Companies from Where They Are to Where They Need to Be
IDC research into the SAP partner economy2 revealed that digital transformation represents a vast opportunity Paul Edwards, director of Software Channels and Ecosystems at IDC, broke down where businesses are investing their IT budgets, with 52 percent of organizations focused on operating model transformation, 26 percent on omni-channel, and 19 percent on IT. By 2022, global enterprises will spend $2.0 trillion on technology related to digital transformation, up from $1.2 trillion in 2019. Edwards advised SAP partners, “The time is now to prove to customers you’re on the front end of these advancements.”
Rizza said that IT solution providers who want to transition to the recurring revenue model need to focus on providing both their digitally determined and digitally distraught customers with training, education, and the customer experiences that lead to success. “When you reach that trusted advisor status, your customers will recognize that you will get them to the next stage of digital transformation,” she said.” When you develop that, you’ll find that companies are going to come back to you.”
Understanding how businesses perceive IT disruption will help you understand and address their concerns, set realistic goals and help them get to where they want to go. Not all of your customers and prospects are on the leading edge of digital transformation, but they all need trusted advisors to help them set a course for the future that will give their businesses the best chance of continued viability and competitiveness. Be ready to meet that need.
1IDC FutureScape: Worldwide Digital Transformation 2019 Predictions, Doc # US43647118, October 2018
2 Infographic, sponsored by SAP, Partner Opportunity in a Transforming World, 2019 IDC