Dammit, New Zealand businesses, transform already

Published on the 13/03/2017 | Written by Newsdesk

Microsoft_digital transformation gap

Research suggests local operators are all mouth and no trousers when it comes to the DTs…

A recent study Microsoft study has found that digital transformation is still in its infancy for most organisations in New Zealand – although just 100 Kiwi companies were polled – which the vendor is characterising as a ‘say-do’ gap. As in ‘everyone’s talking about it, but not everyone is doing it’.

We’re just going to come out right here and say ‘that’s OK’. Digital transformation as a term is quite loosely defined, means different things to different businesses, and, given the rate of change in the underlying technologies, presents risks along with potential rewards for early movers.

But on to the research. Microsoft said its Asia Digital Transformation Study surveyed 1,494 APAC business leaders, including five score from New Zealand. All respondents, said Microsoft, were pre-qualified as being involved in shaping their organisations’ digital strategy.

The findings showed that 36 percent of respondents have a full digital transformation strategy; 17 percent said they have a very limited or no strategy in place at all; and some 47 percent are in progress with specific digital transformation initiatives for selected parts of their business.

Despite those numbers, Microsoft said 75 percent of respondents agreed that they need to transform to a digital business to enable future growth; iStart maths (which is almost certainly questionable) shows that this therefore equates to a ‘say-do’ gap of just the 17 percent if we go ahead and assume that the 47 percent, along with the 36 with a definite strategy, are heading in some sort of ‘right direction’.

In a statement, Barrie Sheers, Microsoft NZ MD expressed concern that “While there is widespread acknowledgement on the need to transform, Kiwi businesses are doing so incrementally and not keeping pace with their regional counterparts. Leaders need to rethink business models, uncover and use data insights and embrace a different way of bringing together people, data, and processes which create value in a new digital business.”

According to business leaders in the study, the top six barriers to digital transformation are, in order of priority:

  1. Lack of a digitally-skilled workforce able to optimise digital businesses.
  2. Lack of government policies and ICT infrastructure to provide a sound digital transformation platform for organisations.
  3. Lack of a technology leader who is also business savvy.
  4. Lack of organisational leadership to ideate, plan and execute digital transformation.
  5. Tight regulations that limit ability to transform digitally and,
  6. No urgency or need to counter disruptors within the industry.

Microsoft said that there is also a continued concern over security in the cloud, ‘potentially impacting on the uptake and speed of implementing a digital transformation strategy’.

“Ultimately, people don’t use technology that they don’t trust. This is a golden rule that applies to organisations and individuals alike as we live in a mobile-first and cloud-first world. Ensuring security, privacy, and compliance are important to enabling businesses to carry out digital transformation with confidence,” Sheers said.

The rise of the IoT, AI, advanced data analytics, and mixed reality are all examples of technologies powered by cloud computing. “Emerging technologies, specifically, cloud, analytics and new capabilities like AI and IoT will give organisations new capability to transform; however, real transformation only happens when businesses bring their people along with them. Equipping employees with the right tools to enable them to be part of solution and be more responsive, data driven and customer centric are also essential,” Sheers said.

More essential still, in iStart’s view, is that the latest IT industry bandwagon should be approached with the same diligence demanded by the laager immediately preceding. Which is to say that digital transformation is all well and good, just so long as it is done for a clearly identified business need – rather than transformation for transformation’s sake.

Check out the study Are New Zealand businesses ready for digital transformation?


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