Digital expertise crucial to success

Some 64 percent of executives in companies with broad-based digital initiatives say their employees are more engaged. In companies that have only implemented transformation projects in individual business units, this is the case for only 21 percent.

Whether a transformation project becomes a success depends crucially on the employees. This shows how important it is to invest in employees in order to be successful in the digital business world.

For the study "4 Ways Leaders Set Themselves Apart," the SAP Center for Business Insight and the market research institute Oxford Economics surveyed more than 3,100 decision makers worldwide to find out what goals companies are pursuing with digital transformation projects.

The results show major differences between companies that have already completed transformation projects and companies that have not yet pursued a digital strategy: 83 percent of the companies that are leading the way in terms of digital transformation expect a fundamental change in talent management in the course of digitization over the next two years.

By contrast, among companies that have not yet tackled their digital transformation, this figure is only 37 percent. Participants with company-wide transformation projects have a more precise idea of the potential benefits for their HR processes:

71 percent believe that digitized processes will make it easier for them to attract top talent and retain them over the long term. Among the other respondents, this is only 54 percent.

Around 52 percent of companies that have carried out digital transformation projects want to create new roles that meet the new technological requirements in the next two years. By comparison, only 32 percent of companies that have not yet tackled digital transformation have plans to do so.

"Leading companies are putting their people at the center of their digital transformation strategy"

Greg Tomb, president of SAP SuccessFactors, explained.

"The study shows that the success of digitization depends crucially on employees. Particularly innovative and forward-looking companies are making targeted investments in their employees in order to be prepared for the demands of the future."

More than a third of all companies worldwide see talent management and employee development as important prerequisites for successful growth in the digital business world.

Around 31 percent consider investment in the digital expertise of their employees to be the decisive factor in terms of increasing sales in the coming years.

The banking sector is the most willing to invest more in digital expertise over the next two years. 48 percent of the banks surveyed see this as the most important factor for higher profits, while 45 percent of the survey participants from the services industry identified stronger employee engagement as the most important prerequisite for increasing profits.

In the U.S., the digital transformation of companies has had a more positive impact on employee retention and development than in other regions. Around 19 percent of the U.S. companies surveyed said that their talent management processes have been partially or completely transformed by the use of new technologies. This compares to just eight percent in the UK, seven percent in Germany and five percent in Mexico.

The study thus shows that digital transformation is paying off for companies. Pioneers in this area are already benefiting from stronger revenue growth and higher profitability compared to the rest of the respondents and expect to build on these advantages over the next two years.

Leading companies expect 23 percent higher revenue growth over the next two years than all other participants, and 80 percent of them said they had increased their earnings power as a result of digitizing processes. This compares to only 53 percent of the other respondents.