Digital transformation is the top priority for Australian business leaders although many are still struggling with strategy and confusion remains over what exactly it entails, according to new research from KPMG.
The consultancy firm’s research group, KPMG Acuity, polled more than 220 c-suite executives for its second annual report, Keeping Us Up At Night. The survey revealed digital transformation is the top priority for Australian executives followed by innovation and disruption, regulation, and Australia’s “political paralysis”.
Digital transformation also outranks customer centricity, cost competitiveness, public trust and cybersecurity, according to the report. Although digital advocates would argue a successful transformation strategy will improve all these issues.
The top issues for Australian businesses, according to KPMG:
- Digital Transformation
- Innovation and disruption
- Political paralysis
- Customer centricity
- Cost competitiveness
- Public trust
- Cybersecurity & Data Privacy
- Big data
- Infrastructure and liveable cities
So far Australian hasn’t scored highly when it comes to digital transformation. Earlier this year Gartner issued a scathing assessment of the state of digital transformation in Australia, reporting that ambition surpasses performance, that the risk of disruption is underestimated, and that there is little appetite to experiment with new business models.
More than an app
While not as harsh of an assessment, the KPMG report agrees there is still a fundamental misunderstanding of digital transformation in Australia and several well known pitfalls are being repeated.
“Digital transformation is not a slick new app. It’s the way the customer’s interaction with that app and how it connects through the entire organisation and back again,” the KPMG report authors write.
“Failing to appreciate that is one of the most common traps you see organisations falling into today.”
Those traps quickly bring Australian organisations unstuck, leaving leaders to lick their wounds. The report said many organisations fail to link new customer experiences to supply chains and back office operations. And when it inevitably comes unstuck the “go to market crow about a new digital experience” looks particularly bad and undermines trust.
“Ultimately, these organisation are making a customer promise they can’t keep. And that’s a surefire way to lose trust.”
Australia’s struggles persist despite increasing transformation opportunities, according to the report.
“Huge amounts of powerful computing power can be obtained. Massive amounts of data can be stored cheaply. The mass proliferation of internet-connected devices continues. Combine this with emerging tech like 5G, machine learning, and artificial intelligence and the smorgasbord of options is truly massive.”
Harnessing that opportunity requires business leaders to act strategically and holistically, according to the report, which argues the key to success lies in “connection”.
“What is ultimately important is the achievement of a ‘connected enterprise’ – digitally connecting customers, employees, and partners into an ecosystem, with priorities and at a pace that are both well thought through.”
The report’s overall findings suggest leaders are left to perform a “difficult balancing act,” according to Amanda Hicks, a key contributor to the report and partner at KPMG Acuity.
“The results highlight the increasingly tough agendas that CEOs are facing,” she said.
“They see a mandate for digital transformation, innovation, and changing their business models to better meet increasing customer needs and expectations – that is, to become more nimble and responsive; at the same time, they recognise this needs to be done in a period of potentially increasing regulation, political uncertainty, and with continued cost pressures.”