Swiss companies are gaining ground in terms of digitization, but are not yet taking off

Digitization has arrived at Swiss companies - but how far has it progressed there? The digital revolution has not yet fully taken hold, according to the results of the survey. This is part of a large-scale study on four IT topic areas at Swiss SMEs and large companies, in which the IT service provider GIA Informatik AG surveyed 2,700 C-level executives from 900 organizations in industry, commerce, mechanical engineering, the public sector and other sectors between March and April 2018. A majority of the participating SMEs (39) employ 100 to 500 people, while every third company (13) has an employment figure of more than 1000.

Strongly affected by digitization

Two-thirds of the executives surveyed testify that their own organization (67.7 percent) and their respective industry (66.7 percent) are strongly to very strongly affected by digitization. They assess that processes (92.1 percent) and products and services (76.3 percent) in particular are exposed to the influence of digitization. Just under two-thirds (62.2 percent) estimate that their customers see digital transformation as an opportunity.

What is the reason for this behavior? Alexander Berger, IT Strategy Consultant at 2BCS AG: "In general, I assume that a quickly recognizable benefit must be evident for companies through digitization. If this is not the case, a certain reluctance arises. Companies with a dominant market position are more willing to drive change in the industry than companies that do not have this market position. However, this does not mean that companies with innovative, digital approaches to solutions do not exist."

SAP S/4HANA not a big topic so far - but soon?

SAP S/4HANA is the new business suite from ERP provider SAP. Since SAP will stop maintaining the current version in 2025, all customers will have to upgrade to it and deal with this change sooner or later. However, the survey clearly shows that only 10.5 percent are using the in-memory database HANA so far; 18.4 percent are planning to introduce it, and 71.1 percent are not using it. Most companies are not yet aware of the SAP S/4HANA Business Suite: 81.6 percent are not using it, 2.6 percent are working with it, and 15.8 percent are thinking about introducing it. Accordingly, there is great potential here.

Companies are satisfied with the response times of their SAP system (76.9 percent) and the timely receipt of information (66.7 percent). The situation is different when it comes to user-friendliness: Only 30.8 percent judge that their system is easy to use, and 38.5 percent think that the display used is useful and clearly structured.

Why do many companies use an external SAP service provider? Primarily to reinforce internal resources with external expertise (75.7 percent) and to carry out the implementation (76.3 percent).

How should these results be assessed? Burim Maraj, CFO/CIO at Skan AG, an internationally active company specializing in the construction of insulators for the pharmaceutical industry: "In my assessment, interest in SAP S/4HANA is definitely there. Companies are following what is currently happening - it is important to build on this. However, many are not aware of the time aspect and the costs for SAP S/4HANA. That's why I sense a certain amount of uncertainty. Perhaps the few implementation partners also lack experience with this new product. In addition, very few want to be the 'early bird' and share the 'teething problems' that may occur. For these reasons, many companies continue to work with the previous system. We are taking a first step and are now introducing the HANA database first and - when everything is mature - will proceed step by step by carrying out a 'readiness check' for SAP S/4HANA."

Alexander Berger adds: "The providers' offerings are varied, the customers' experience with SAP S/4HANA is mostly still limited, the expected follow-up costs are high, and the additional benefits are rather small. Interest will increase at the latest when there is a compelling need for action or there is a recognizable benefit."

Often many years of cooperation with the provider

A third survey targeted companies' relationship with their IT provider. The majority of companies are satisfied with their provider (56.8 percent). "In fact, we generally observe that customers are often satisfied with the overall package," Alexander Berger explains the result. "If not, providers are doing a lot to achieve this state."

The collaboration often lasts for years: Around two-thirds (63.9 percent) have been with their IT and SAP provider for more than five years. Where does this loyal connection to the provider come from? "Customers are very much concerned about cost/benefit. But they also know that switching providers incurs switching costs and does not necessarily lead to added benefits."

Only a minority - 5.5 percent - are considering a change. "Here, fundamental changes - in terms of organization and personnel - at the customer's and the provider's are particularly decisive. In many cases, price does not seem to be the primary consideration," Alexander Berger emphasizes.

Competence of the IT provider is crucial

89.5 percent of companies place the main emphasis on the provider's expertise. The study shows that this is primarily decisive for choosing and staying with the provider. 81.6 percent want tailored solutions and 64.9 percent want sufficient services at very reasonable prices.

Burim Maraj: "Time is money, they say. We need someone who knows how the systems work and can work out a solution as quickly as possible. On the business side, we also have an obligation to our customers to provide quick solutions. If a process or system doesn't work, we can't deliver or invoice - the result is higher costs, dissatisfied customers and consequently a bad image. That's why, on the provider's side, we depend above all on his competence. In addition, he must be experienced, have a high reaction speed and think across processes."

Further information on SAP S/4HANA is available at here.

Source: GIA Informatik AG