When it comes to implementing enterprise-wide digital transformation programs Australian businesses are overstating their achievements, according to a new study from research firm Tech Research Asia.
The report, Taking Digital to the Next Level, found Australian businesses are talking to the talk, acknowledging the critical importance of digital, but may be using the term “digital transformation” a little too liberally.
- Which-50 and ADMA are introducing a one day classroom-based digital transformation education program for senior executives lead by visiting US subject matter expert Courtney Hunt PhD. Places are strictly limited.
The research was conducted in July 2016 and involved qualitative interviews with a dozen leading organisations and a quantitative survey of 200 business and IT leaders. Respondents of the survey were required to be in senior positions with responsibility for, or influence over, their organisation’s use of technology as part of its digital strategy.
Examining the state of digital transformation in Australia and New Zealand, the survey asked about the current status of digital transformation efforts. The majority of organisations (over 50 per cent) said they have started a company-wide transformation program. However the researchers believe this is an aspirational statement.
“For most, it seems that digital transformation is an aspirational goal at this time or even possibly just a replacement lexicon used to describe ‘business-as–usual’ activities because that’s the expected terminology or thing to say today,” the report says.
When asked who internally was driving their digital strategy, the majority of respondents said they didn’t know. Another disparity highlighted by the report was only 6 per cent say they had a truly rapid and agile IT environment, although most are working towards it.
“What the research confirms is that while the majority of organisations have been on some form of digital transformation for some time, there is still a lot of work to do to ensure agility of the underlying IT platforms,” said Trevor Clarke research director of Tech Research Asia.
The report indicates Australian businesses have a high level or understanding of digital and backing from leadership. When asked ‘is your CEO a digital believer or a digital cynic?’ 83 per cent said their bosses were believers.
“The term ‘digital’ is increasingly just becoming a de-facto tag for things we do with technology and being ‘data-driven’ is another popular term being thrown around – often too liberally. It’s important that we don’t just pay lip service to these ideas as the value they can bring to organisations in industries of all kinds is very real. We need to take these programs everyone says they are doing to the next level,” Clarke said.
Nathan McGregor MD ANZ Hitachi Data Systems, which commissioned the research, warned this mindset could lead to complacency.
“We are finding many businesses classifying their projects as enterprise-wide transformation when in fact they are making a single process digital,” McGregor said.
McGregor argues the fear of disruptors like Uber and Airbnb is causing businesses to label processes ‘disruptive’ or a ‘digital transformation’.
“When you look deeper at the digital unicorns we have much to learn. We would suggest we focus on not ‘what’ they do, but ‘how’ they do it. And while it’s easy to focus on technology being the key to success, we propose that culture plays a more important role. Again, the data shows that is the second biggest challenge for enterprises facing digital transformation,” McGregor said.
According to the report, the challenges for organisations moving forward will be to transition from the initial phase of digital transformation projects, which have been focused on the digitisation of existing processes, towards those which are genuinely transformational.