Despite the imperative of digital transformation, organisations are reluctant to take the necessary digital steps, according to research from Forrester. The research firm surveyed business leaders on their digital change finding many fundamentally misunderstood the strategy and most were dangerously complacent around its biggest risk.
In August, fellow analysts from Gartner delivered a scathing assessment of digital transformation in Australia and more recently some of the country’s digital leaders have outlined their own concerns about the state of digital in Australia.
“We have fallen well behind where we need to be as a nation,” said outgoing Westpac CIO, Dave Curran, last week, expressing grave concerns that big tech companies were out of step with customers and Australia risks being left behind.
“Even though I am an eternal optimist, I still worry about how Australia will fare in this new tech-driven world,” Curran said.
“Australia’s economic prosperity is critically dependent on having a world standard tech capability that informs everything that we do – from mining to agriculture, retail to manufacturing, finance to media, architecture to entertainment.”
While little comfort, it appears local firms may be in good company.
The Forrester research paints a similarly grim picture in its global report, The Sorry State Of Digital Transformation In 2018. The survey of over 1500 business decision makers from large organisations found they are reluctant to change, were foolhardy in their own assessment and the digital leaders necessary for successful transformation are “a rare breed”.
Most firms are turning to CIOs to lead change, 37 per cent of organisations nominated their information chief as being responsible for digital transformation. Just under a quarter have the CEO responsible while 18 per cent utilise a chief digital officer and 15 per cent use a chief data officer to oversee digital change.
And while digital transformation is now the remit of executives, many of the leaders haven’t yet grasped what they need to do, according to Forrester.
You missed the point
More than one in five organisations still have a fundamental misunderstanding of digital transformation, according to the research. Twenty-one per cent said they had completed their transformation already – an impossibility, according to the Forrester authors.
“You will never be transformed. You will always be transforming — the 21 per cent of respondents who think they are finished are confused about that.”
Over half of organisations surveyed indicated they were currently undergoing transformation, 15 per cent are still investigating digital transformation, and 7 per cent are “improving but not transforming”.
Security is the biggest challenge in digital transformation according to those surveyed (31 per cent). But Forrester analysts said most firms are still complacent over security.
The onus is on organisations to protect consumer data, according to Forrester, and the challenge requires continuous upgrades and change, making any security complacency dangerous.
Organisations have technology firmly on their minds according to the research. Business decisions made over the next year will primarily effected by technological changes like digital transformation (38 per cent) but economics (31 per cent), politics (16 per cent) and competition or disruption in markets (15 per cent) are also significant factors.
According to Forrester, the rising importance of technology means embracing digital technology and business models is “the only path forward”. However, few are doing it, according to the report.
Embrace digital technology
Digital technology has now moved from an enabler to becoming a business asset, according to the report. However, as organisations grapple with things like SaaS, data and analytics software, and security and privacy technology, leaders have already moved on to emerging digital technology.
According to the research three out of four digital transformation leaders are willing to adopt enraging technology like AI, IoT, blockchain and augmented reality, but those leaders are few and far between.
“Software, the cloud, and emerging technology will become business assets, not just technology enablers of your digital business,” the authors write.
“It’s time to invest more heavily in each of them.”
More than technology
While digital technology is front of mind and fast becoming table stakes, there are several other factors critical to success. Respondents nominated an innovation culture, new digital platforms and updating business metrics as top three actions being taken to achieve digital transformation.
A complex challenge but one that one that could prove fatal if not solved, according to the report.
“If you don’t automate away your own jobs, a disruptor will do it first instead, thus changing the economics of delivery,” the authors warn.
“Technology will ultimately transform every position in your company.”
Digital transformation is fast becoming a necessity for almost every organisation. And while many are struggling, the Forrester research also suggests leaders have unlocked new insights, business models and a culture of continuous improvement. Those standing pat are now being left behind.
About this author
Dan Ross is the managing director of Optimizely ANZ which is a member of the Which-50 Digital Intelligence Unit. Members provide their insights and expertise for the benefit of our senior executive audience. Membership fees apply.