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2017: The Year that SMEs Capitalize on Digital Transformation?

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Many companies have been slow to embrace a digital transformation. This is the sweet spot for channel partners in the coming year.

It’s that time of the year again, where we start to put all the happenings--both good and bad--of the past 12 months behind us and look forward to how we can achieve more success in the coming year.

At this point, I think we can all agree that digital transformation is the wave of the future. It only makes sense that with vast amounts of data accumulation, using technology and real-time data in combination to lower costs and drive revenue is a foregone conclusion. This is true for the larger players as well as the 85 million small and midsize business enterprises (SMEs) worldwide that will in many ways drive the world economies.

But, like any paradigm shift that changes people’s way of thinking, digital transformation, for whatever reasons, is only being slowly adopted. Some of the more savvy and forward-thinking SMEs are already transforming their businesses with technology to be more competitive against larger players, to add capabilities to their businesses, and to stand out from their peers. But widespread adoption has not been entirely achieved, and this very fact is, in my opinion, the sweet spot for channel partners in the coming year.

What role can you play in the inevitable movement to digital transformation?

Digital Consulting & Services

A recent report from The Economist Intelligence Unit (EIU), sponsored by SAP, showed the results of a survey of businesses with annual revenues of US $250 million to $500 million. The survey was intended to determine the progress of digital initiatives in respondents' organizations and their perceptions about the role of IT in digital transformation.

The most glaring point in the report: Although they have invested in new technologies, only 17% of respondents said that these companies' initiatives are “highly effective”--compared to 27% of respondents at larger enterprises.

To me, that result underscores a big opportunity for channel partners to be able to work with the IT department as a liaison to the individual from the line of business (LoB).

These LoBs are owning these projects primarily because there is a lack of strategic oversight and lack of a clear digital strategy. Think pre- and post-deployment consulting services that help to bridge the divide between IT and the line of business. A channel partner could step into such a situation and become the hero who solves the problems that we often see between IT and the LoB owner.

Find Your Cloud

When I hear about systems integrators and VARs that are focused solely on on-premise solutions--and for whatever reasons have not taken the steps to sell, implement and provide cloud services--my reaction is, "Really? Why?" Here are a few sobering predictions:

  1. By 2018, 50 percent of IT spending will be cloud-based.*
  2. By 2020, 70 percent of all software, services and technology spending will be cloud-based.*
  3. Hosted private cloud revenue worldwide will grow from $8.9 billion in 2014 to $40.6 billion in 2019.*

The call to action here? Consider a Partner Managed Cloud approach. You can host a solution, add your own apps and IP, or value-add. The upside for the customer is that it’s one contract, which is an operational expense and at a lower cost.

HR & IoT

Other "hot spots" to keep an eye on in 2017 are cloud-based HR solutions in the SME market, the Internet of Things and blockchain technology, not only for electronic transactions but for new business models. All three have huge opportunities, and IoT hasn’t even scratched the surface of its potential yet.

In the area of HR, Microsoft recently announced that it’s going with SAP SuccessFactors HCM Suite to manage its 114k full-time employees. Keep in mind, though, that while Microsoft is larger, SAP solutions are very well suited for SMEs. SAP’s PartnerEdge partner program is designed for partners who build, sell, service, and run SAP cloud and on-premise solutions for customers of all sizes, and with many solutions SAP offers special pricing and packaging for small and midsize businesses.

Digital transformation is not going away. It is the future, to be sure. Now is the time to seriously explore software vendors that will help you help your SME customers and prospects succeed with digital transformation in 2017.

* According to IDC research sponsored by SAP

Ira Simon (@IraASimon) is global vice president, Partner & SME Marketing at SAP. Learn more about partnership opportunities at: http://go.sap.com/partner.html.

 

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