Digital Transformation: Why Firms Should Invest In Their Workforce
Improving the digital skills of the workforce is pivotal for organizations to grow their revenue, according to a recent study. ”4 Ways Leaders Set Themselves Apart,” a study by the SAP Center for Business Insight group and Oxford Economics, showed that business leaders who have completed digital transformation projects across their entire organization report significant increases in employee engagement compared to those with more limited initiatives.
Sixty-four percent of executives with broad-ranging digital initiatives say their employees are more engaged, compared with 20 percent among organizations that have completed transformation projects in single business areas. The study concludes that successful transformation depends on people, highlighting the importance of workforce investments in driving digital business performance.
The announcement was made at the SuccessConnect event in Las Vegas from August 29–31 surveyed over 3,100 global business decision makers to examine the priorities driving digital transformation projects. The results show stark differences between organizations that have completed transformation projects and those that have yet to adopt digital strategies.
For example, eighty-three percent of digital transformation leaders expect digitalization to change talent management over the next two years. That figure compared with only 37 percent of organizations that have yet to begin digital transformation.
Respondents who completed digital transformation projects across their business have a more crystalized vision of the potential benefit across their HR processes, with 71 percent saying digitalization will make it easier to attract and retain the best talent, compared with 54 percent of other respondents. About 52 percent of the businesses that have undergone digital transformation projects said they planned over the next two years to create new roles to reflect technological imperatives, compared with only 32 percent of companies that have yet to undertake digital transformation.
“Today’s leading businesses are putting their employees at the heart of their digital transformation strategies,” said Greg Tomb, president, SAP SuccessFactors. “Successful digitalization depends on people, with the most innovative and forward-looking companies committed to investing in their workforce to ensure they are properly equipped to meet the challenges of tomorrow.”
From that perspective, over a third of global companies believe that talent management and development are key drivers of digital growth. Some 31 percent agree that investment in employees’ digital skills would be the most important factor in increasing revenue in the coming years.
The banking sector showed the greatest commitment to increasing investment in digital skills over the next two years. Forty-eight percent listed it as the most important factor to driving profit growth, while 45 percent of the professional services sector rated improving employee engagement as the most important profit-driving factor.
“Digital transformation is about more than investing in the latest technology,” says Edward Cone, technology practice lead, Oxford Economics. “People matter most – how they work, what they know, which skills they need in a changing workplace. Most companies have only begun to address these human factors, and those that fall behind may never catch up.”
The study shows that a commitment to digital transformation pays off. Compared to other companies surveyed, digital leaders have stronger revenue growth and profitability today – and expect that advantage to continue over the next two years. In fact, digital leaders expect 23 percent higher revenue growth than all others in the next two years, and 80 percent of leaders say transformation efforts have increased profitability versus 53 percent of all others.
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