Acting like a technology company has propelled Domino’s Pizza’s share price skyward, argues the pizza chain’s CIO.
“Our share price is now over $65. This is not based on product sales alone. We have a high PE ratio because we’re seen, act and behave like a technology company. And so we have a tech company share price,” said Wayne McMahon, Group Chief Information Officer at Domino’s.
That’s one of the insights into the state of digital transformation in Australia highlighted in a new report from Microsoft.
- Download the CMO of Tomorrow report produced by the Which-50 Intelligence Unit
The report, titled Embracing digital transformation: Experiences from Australian organisations is based on detailed qualitative interviews with 30 senior leaders of business and government organisations, conducted in August and September 2016.
Weighing in on the shift to digital, the interviewees identified three critical factors for success: strong leadership buy-in, an entrepreneurial cultural and access to talent. The report found Australian businesses believe a shift in mindset is more important than technology itself when it comes to digital transformation.
The organisations surveyed identified their top four barriers to digital transformation as availability of talent, culture and mindset, leadership and clarity of vision. Other inhibitors concerns about security, confidentiality and regulatory compliance. Legacy systems and risk averse cultures are also working against transformation efforts.
The companies Microsoft spoke to fell into two categories: ‘proactive and embracing’ or ‘motivated but constrained.’ While both have a optimistic outlook, struggling with internal obstacles was the distinction between the two categories.
Most organisations were opting for a ‘test and learn’ approach involving discrete projects and experiments, rather than business-wide structured programs. These smaller shifts allowed for fast iteration, encouraged buy-in from the rest of the business and reflected the pace of change in digital technologies.
Customer experience was the first area businesses looked at to transform, using data to win, grow and retain their customer base. Initiatives such as employee empowerment, optimising operations and transforming products and operations were next on the list.
“The most digitally advanced organisations had several common elements but the role of people, in terms of leadership, culture and ambition, was the most pervasive,” said Microsoft Australia’s Managing Director Pip Marlow.
“Transformation is underpinned by a digital mindset that is a unique interplay of technology, people and process. It is adopting this mindset that we believe truly puts an organisation on the path to digital transformation.”
Australian businesses leaders talk digital transformation
The report includes insights from interviewees. Here’s what a handful had to say on the topic:
“To a certain extent, digital transformation to me is a bit of a buzzword. Organisations have been applying emerging and increasing technological capabilities for decades now, so to me it’s the next iteration of that.”
— Michael Osborne, Head of Technology at Cricket Australia.
“For me, digital transformation is about getting away from the traditional cumbersome processes of paper.”
— Danny Lindrea, Director of ICT Architecture at Bendigo Health.
“A range of technologies can help change our relationship with customers, but – very importantly – digital transformation offers an opportunity to change the business model. Now, if you change your business model, you are going to change the way in which people work and you are going to change processes. So, to me, the essence of transformation is the opportunity to build new business models and shift from outright purchases to a pay-as-you-go mentality.”
— Data Scientist Dr Suresh Sood, from Chartered Accountants Australia and New Zealand.
“Digital change is going to accelerate more and more… If you want to have a future, you’ve got to really embrace it, understand it and engage with it. Find ways to take what your business – whatever it may be – is really good at, and be even better at it.”
— Ros Harvey Founder & Managing Director The Yield