The digital priorities of Kiwi businesses

Published on the 08/06/2022 | Written by Heather Wright

New report reveals all, but flags serious concerns for NZ Inc…

Plummeting global rankings for network readiness, drops in other tech rankings, skills gap concerns, supply chain issues… it’s a gloomy outlook in terms of New Zealand’s digital performance according to a new report which notes Kiwi business leaders conceding the country lacks the scale and capital required to invest or adopt new technologies in many sectors.

The Technology Users Association of New Zealand (Tuanz) Digital Priorities Report 2022 paints a picture of a slide into mediocrity and warns that the country must invest in digital skills capability and capacity ‘seriously’ to avoid falling off a tech tipping point.

“We have only been able to remain ‘relevant’. We aren’t ahead of average and certainly not leading.”

The report flags shortages in hardware, tech products and – surprise! – digitally skilled workers, noting that current technical resources are ‘stretched’ and the skills gap, retention of staff, attracting talent and ‘getting people in the door quick enough’ is the biggest technology challenge for tech leaders this year.

The Portulans Institutes’ Network Readiness Index saw New Zealand slide four places for the overall technology pillar, with access and international internet bandwidth rankings in particular taking a hammering. In the economy sub-pillar, New Zealand ranks poorly for high-tech and medium high-tech manufacturing (69th), high tech exports (62), growth rate of GDP per person engaged (54th) and ICT services exports.

“Perhaps telling is that we rank well for the prevalence of a gig economy (14th), which is degined as a ‘labour marker specific to digital platforms and to working arrangements that are focused on short-term contracts and task-based work’,” the report notes.

But if New Zealand is declining in overall country rankings – dropping from 16th to 20th on the Network Readiness Index (seven places behind 13th placed Australia) – New Zealand’s tech leaders remain relatively optimistic.

The vast majority of digital leaders interviewed were ‘reasonably to highly positive’ they will be able to implement solutions that will meet the challenges faced this year. 

“With the acceleration and rapid change due to Covid-19, many technology lifecycle management programmes were put on hold. As the dust began to settle in 2021, digital leaders were faced with the challenge of learning to balance business as usual with strategic programmes and transformation going forward,” the report notes. 

The report, based on interviews with digital business leaders, found all of those leaders expected their organisation to invest more (59 percent) or about the same this year in technology and related services, than they did in 2021. 

“This is due to the increased cost of delivering projects due to resourcing challenges, increased operating expenses and a continued push towards accelerating digital transformation and change to keep pace with the rest of New Zealand.’

The report comes as the New Zealand government invests some $8.2 million to take the NZ Tech Story to the international market, and a further $11.2 million to help Kiwi SaaS providers scale up, particularly in the export market, and with Tuanz pushing for New Zealand to claim a spot in the top 10 digital-ready countries on the Portulans Institutes’ network readiness index. 

The leaders were asked what key technologies would have the biggest impact on their organisation or industry in the coming year. 

After spending 2021 playing catch-up and getting their house in order and the foundations ready, 2022 is apparently all about getting on top of the operational challenges hanging over from 2021, then realising value, building, optimising and looking at new efficiencies.

The top six priorities, according to the leaders surveyed by Tuanz were: 

Change management in digital transformation – Supporting their workforce to continue to adapt to change and adopt new systems and technologies amidst lockdown fatigue to realise the ROI expected will be key for digital leaders this year.

Cybersecurity – Enabling a secure hybrid workplace remains a key priority as security threats only continued to increase during 2021. Digital leaders are looking at how they can bolster their defences and design a far more resilient cybersecurity entity.

Retaining and recruiting for digital skills – A continued lack of international talent and the growing local skills shortage is a big concern for many leaders. With the increase in digitalisation of services and organisations’ appetite for digital transformation increasing, the demand is through the roof.

Enhancing the experience for customers, employees, and the community – Delivering operational efficiency is one thing but removing friction from the employee experience and enhancing customer experience and community engagement is also on digital leaders’ radar this year.

Getting the most from our data – Data collection, data analytics, data organisation, utilisation, and exchange, automating the delivery of data – Getting the most out of their data, efficiently and ethically, continues to be a big priority for leaders in 2022.

Supply chain resilience – De-risking supply chains to mitigate the ongoing effects of Covid-19 restrictions, natural disasters, and other disruptive events is key for digital leaders to ensure the physical availability of products and hardware. 

“We know there is around $46 billion dollars of economic value that could be added to New Zealand’s GDP by 2030 by unleashing digital transformation in our non-tech companies, but if we continue to stall against competing nations, it will become much harder to unlock that value.” Tuanz CEO Craig Young says.  

“While overall it appears New Zealand isn’t falling behind – yet – it does appear that despite the digital transformation and acceleration we have seen over the last two years, we have only been able to remain ‘relevant’,” the report notes.

“We aren’t ahead of the average and certainly not leading the adoption of new technologies, however we are not yet lagging.”

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