Published on the 18/07/2024 | Written by Heather Wright
![Australian and Kiwi tech priorities diverge](https://istart.co.nz/wp-content/uploads//2024/07/kiwi-and-aus-tech.jpeg)
Forrester reports stark differences in tech plans…
New Zealand and Australian organisations have vastly different technology and business priorities for the next 12 months, with Forrester cautioning that one of the Australian goals may spell trouble.
Sam Higgins, Forrester principal analyst, says despite the two countries facing similar challenges around interest rates, sluggish growth, high inflation and changes in their respective governments, there are ‘stark differences’ emerging between the two countries.
“Everything seems to be pointing at a big renewal of core technologies that doesn’t appear to be happening in Australia.”
Australian enterprises – those with 250 or more employees – are focused on improving the experiences of customers and business partners (both 23 percent), underscoring a need to meet stakeholder expectations to maintain peak performance.
In New Zealand, however, it’s a focus on brand improvement (33 percent) and reducing enterprise risk (25 percent) that are being prioritised – striking a balance between addressing immediate tactical challenges and planning for long term development.
“For Australia, it feels a bit like we’re sticking to our knitting and going to just focus on customer experience and improving some of our partnership or ecosystem relationships – so shoring up the structures and things we already have – rather than really questioning anything fundamentally,” Higgins told iStart.
“The Australian decision makers don’t seem to be doing anything new, or changing direction significantly to address the reality,” he adds. “Whereas Kiwi decision makers, if they haven’t done the root cause analysis, at least have a hypothesis that they can make some real change.”
Higgins says the Kiwi results suggest that while enterprise decision makers are being quite intentional and tactical at one level, they’re also looking at longer term plays as well, particularly around reducing enterprise risk.
The divergence could, Higgins speculates, be linked with the slightly more acute economic situation in New Zealand, combined with the differing key industries – Australia’s larger services sector could explain the customer-centric focus, versus New Zealand with its product-oriented commodities export market.
Despite the economic headwinds, 91 percent of Australian and 81 percent of Kiwi respondents expect to spend more on technology products or services in the coming year, and 73 percent of Australian and 60 percent of Kiwi respondents increased spending in the last two months.
The increase however, is likely to be modest with Forrester expecting only a four percent increase in tech spending in Australia for 2024 with the technology investment focus – reflecting that services aspect of the Australian economy – on hybrid work and data and analytics.
In New Zealand the investment is heading to industry cloud adoption and the use of edge computing – often seen in countries with high degrees of manufacturing – or Turing bots, used for software development.
“Much of this reflects New Zealand’s investment in unique solutions for agriculture and food related exports,” Higgins says.
Tying in with the desire to invest in new platform technologies core to the business, is activity around applications and modernisation in New Zealand, with 20 out of 22 Kiwi respondents saying they’re planning to spend money with third party providers for application migration and modernisation services – something that doesn’t even feature in the Australian results.
One-third of Kiwi respondents plan to hire third party service providers for software application development in the next 12 months, highlighting a preference for in-house developed solutions.
“Everything seems to be pointing at this big reformation, or big renewal of core technologies in the New Zealand market that doesn’t appear to be happening in the Australian market at the moment.”
When it comes to improving brand, actions respondents are looking at are focused around communications, as they seek technologies that allow them to place communications and advertising in a wider range of locations, including new areas.
“One thing that is driving this, and a reason I think the Kiwi strategy is really important, is that increasingly the communications pathways for brands are being disrupted,” Higgins says.
Changes to algorithms and what platforms are serving, including removing – or threatening to remove – news services, and the impact of generative AI front ends and the new routes to information they provide, mean enterprises are facing a rapidly changing environment.
“If you rely on these algorithmic-based platform models and you’ve built your business around your ability to communicate value in these environments and suddenly the rules of the game change, you can end up with no traffic.
“So the technology to place brand communications, advertising and things in a much more sophisticated way is going to be the big driver there.”
Meanwhile, Australia’s focus on CX includes leveraging emerging technologies for customers to engage with. It’s the top action as enterprises seek to improve CX, but it’s also the one Higgins cautions has plenty of risk involved.
“Particularly in this world of AI hype and when 90+ percent of people are saying they’re going to invest in AI, enterprises need to recognise that this is a fundamental shift in the computing paradigm,” he says.
While executives might be keen to embrace GenAI after hearing excited chatter about its use in Chatbots, Higgins warns they need to understand the newer chatbots are high risk chatbots.
“Yes, you get a better chatbot, but it’s also a high risk chatbot because we have moved from deterministic and very structured database machine learning and predictive technologies to large language models and general-purpose transformers (GPTs). What that means is you are basically dealing with technology that people need to question and not to necessarily roll it out direct to customers.”
While an old school chatbot will tell you it doesn’t have the answer, the new version will happily hallucinate an answer for you.
“In Australia, the smart money is on those organisations that can either implement internal GenAI solutions in partnership with the market, or that can build that culture of customer-centricity that allows customer-facing employees to become much more discerning about what it is that these tools spit out and mediating those answers back to customers.”
Higgins says there’s also a danger in over-estimating the GenAI productivity benefits in customer service. Research suggests uplift of around 14 percent in customer service, well below the figures seen in development and business documentation.
“That is where the problems will emerge, with companies saying they didn’t get bang for buck. Well of course you didn’t because you’d already squeezed the blood out of that stone and all you’ve done is added a chatbot that needed mediation.”
He warns too that as GenAI gets better and organisations are able to have processes completely served by GenAI models, it means human employees will be left with just the hard problems to deal with – increasing the risk of burnout.
“I think we have to be mindful of that in Australia because of the services nature of our economy, to ensure we don’t employ these technologies in a way that just burns everybody out.”