Why 2015 is all about digital transformation

It’s only February but digital transformation is already strutting its stuff as one of the hottest trends of 2015. Savvy consumers and businesses have realized that quality data goes with everything from finding the best deals on fashions to creating new business models with smart machines. Behind it all are technologies like cloud, mobile, and the Internet of Things (IoT)inexorably being woven into the fabric of everyday life.

The changes are profound. IDC expects the installed base of the Internet of Things (IoT) to reach approximately 212 billion by 2020. Three years ago, Gartner predicted that by 2015, 25 percent of organizations would have a Chief Digital Officer. I don’t have numbers on how that forecast is trending, but I do know that Jonathan Becher was named Chief Digital Officer at my company, SAP that year. Meantime, registration is underway for the newest openSAP MOOC, “Digital Transformation and its Impact.” The two course instructors recently gave me the lowdown on what digital transformation means to business this year.

Disrupt or be disrupted

According to Sven Denecken, Vice President of SAP Cloud Solutions and Head of Co-Innovation, more companies are taking digital transformation seriously.

“We see organizations investing in huge multi-year programs to domesticate the digital transformation dragon. It’s a must-have in 2015 for companies to stay connected to the market and customers. If companies don’t disrupt themselves then they’ll be disrupted by entirely new competition.”

What to do first

While every company and industry is unique, Bert Schulze, Vice President of SAP Cloud Global Customer & Market Strategy, advises at least setting up a task force to address digital transformation.

“You need an interdisciplinary team focused on agility and rethinking your industry differentiation based on new technologies. It’s all about using the network; what networks you can create or which you can join,” he said.

Overcoming three main challenges: leadership, knowledge, inertia

As digital transformation takes holds, many companies struggle to find company champions, understand digital proficiency levels, and topple rigid hierarchies.

“Digital transformation is often pigeonholed as an IT topic, but because of the impact on the entire company, the strategy needs to be directed from the top,” said Denecken. “Also, people will have varied abilities to adapt to digital transformation. Even when the right technologies are at hand – big data, cloud, social networks, mobile – somebody still needs to make the first move and break the ground.”

Harnessing the liberating force of technology

Digital transformation is about future investments in new markets and opportunities, but only if companies understanding how to use technology as a liberating force.  It may seem like boiling the ocean but targeted information can arm business and IT professionals with practical knowledge. For example, participants of SAP’s latest MOOCon digital transformation will walk away with a better understanding of exactly what digital transformation is, the technologies involved in it, and how to assess their company’s digital proficiency. They’ll also gain exposure to some real-life examples of companies already using digital transformation successfully. Ubiquitous as it may be in conversations, making digital transformation a widespread reality is the promise of 2015.

This article is published in collaboration with SAP Business Trends. Publication does not imply endorsement of views by the World Economic Forum.

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Author: Susan Galer is a multi-media communicator.  

Image: Projection of binary code on a man holding a laptop computer in Warsaw. REUTERS.