ADAPT's analysts drew on interactions with over 3000 executives in Australia’s largest organisations to create a framework for success and empowering execution.
Matt Boon, director of strategic research at ADAPT outlined four areas to consider to ensure continuous execution on digital transformation strategies: innovate, enable, automate and experience (both CX and staff). “Always come back to how we do things differently to provide the products, services and capabilities to deliver the experience that employees and customers want and expect,” said Boon.
“Customers want you to be smart, but not creepy,” said Aparna Sundararajan, senior research strategist at ADAPT. Anyone who has been followed by ads for a holiday destination they have already booked will understand exactly what she means. “Customers want connected and convenient experiences but not at the cost of their own privacy. That is what customer loyalty is going to be about in the future.”
The CIO and CDO are a critical part of the customer equation because technology is front and centre in most customer interactions. Organisations need to not just attract customers but look at how they can retain them. What are the experiences customers are looking for? How does your organisation differentiate itself and empower the customer? How do generational differences and differences in background affect the customer’s perception of what is appropriate in terms of privacy?
2. Build a data driven business
“Almost every organisation we speak to tells us they are really grappling with data. They are struggling to manage it, they don’t have the resources and they often do not know what the best approach is to manage it,” said Boon. “At the same time leaders are saying they want to be data-driven organisations with decisions based on facts.”
Strikingly, ADAPT research shows that 8 in 10 organisations do not trust their data and only 1 in 16 organisations say that they are on top of their data management.
“They are struggling to turn data into business insights,” said Sundararajan, “because nobody tells CIOs what the business priorities are that the data can help solve. The future technologies of AI, automation, analytics, robotics and augmented reality will only make sense if an organisation has a fluid data fabric flowing across the organisation seamlessly.” While some CIOs may scoff, the unfortunate fact is Australian CIOs tend to report less to the CEO than their global peers. This in turn leads to a gap between IT and the business.
“Organisations need to step back and work with CIOs to build a data vision,” said Sundararajan.
3. Architect a secure and resilient organisation
Protecting the brand, integrity and minimising potential brand damage is critical. “Security is the thin, invisible line between access and abuse,” said Sundararajan. “Data security and privacy are going to be the defining factors for a brand and will be a big differentiator in the future.”
But CISOs know it is one of the more difficult areas to justify expenditure in, given that success means 'nothing happened'. How do you quantify the unquantifiable?
Adding to complexity, the perimeter of organisations is moving further and further beyond the internal network, with IOT, 5G, open and programmable networks and increasing reliance on gig economy workers. “The security architecture and vision for most organisations is not working today,” said Sundararajan. “We need new guidelines and frameworks. New ways of monitoring and taking action. Organisations need an outside-in, people-centric view of security, rather than inside-out.”
4. Drive operational effectiveness
Operational effectiveness has slipped from the top priority in 2019 to number 4 this year. This may seem surprising but, without customers, data and security, the operation would quickly cease to exist.
Analytics and automation were the two areas cited as most valuable in terms of driving operational effectiveness. Conversely, blockchain, AR and robotics were widely cited as not useful. This, unfortunately reinforces concerns about Australian innovation and ongoing competitiveness. Overseas these technologies are being embraced at a more rapid pace, often funded by venture capital that does not have the same risk aversion that most corporates have.
5. Think like a technology company
“We need to think more like a technology company,” said Boon, who counsels organisations to look at what are some of the best and most innovative global practices they can model and employ. “We need to be thinking much more broadly about who we are working with and who we are partnering with.”
20% of IT budgets are now allocated to innovation and transformation, which is a big improvement on previous years, but 3 out of 5 dollars spent on IT is still spent on just ‘keeping the lights on’ and two thirds of organisations were only in the first steps of using IT as a tool for innovation.
6. Tear down organisational silos
Know your stakeholders throughout the organisation and how you can engage them. “Silos will disappear only when organisations relook at the way they align people, processes and technology with business objectives,” said Boon. “The biggest challenge is managing internal politics, internal processes and internal legacy mindsets. It’s not good enough to just know what the overall business priorities are. CIOs need to be working across the various business units within their organisation.”
7. Embrace dynamic budgeting
Measuring ROI, creating a business case and requesting budget approval are outmoded processes that hinder innovation. The shift to cloud has taken many IT departments from a capital expenditure to operational expenditure focus. Despite the cost savings and business opportunities potentially arising from digital transformation Australian organisations tend to wait for a technology to be proven before integrating it.
“Dynamic budgeting is one way to solve our passion for CAPEX versus our thirst for innovation,” said Sundararajan. “CFOs really need to sit down with CIOs and other stakeholders and define what the business priorities are and then think about how much budget you need to allocate before the financial year rather than on a project-by-project basis.”
8. Develop a people first organisation
Transformation is not a destination, it is an ongoing journey. But teams find it difficult to communicate, collaborate or even agree, let alone drive change in the enterprise.
Teams should be a combination of skills, mindsets, and attitude rather than just hard skills and experience, which means organisations need to change the way people are hired.
“Organisations need to create more transparency and trust, and fluid processes in terms of information access, communication and collaboration. We need new tools that will make employee’s lives easier,” said Sundararajan
9. Encourage and build a diverse organisation
While this has become a focus for many organisations, it is important to go beyond just gender, generational or cultural backgrounds. It is more than having a simple list of HR do’s and don’ts. Different people bring alternative perspectives to problem solving, they bring open, new and critical thinking to the table. Something that business leaders need more than ever.
10. Future proof the organisation
How do you future proof something when you don’t know what the future will hold? How do you ensure the investments you make today set your organisation up for the future? When you think of legacy applications that you currently have, what do you want your future legacy to look like?
One of the key suggestions from ADAPT is to avoid quick fixes to problems that force the business to spend even more of its IT budget maintaining the status quo. Instead focus on people and culture.
“If we focus on our people and think about what we want them to look like in the future and how we want them to operate,” said Boon, “that will serve us incredibly well when we think about future-proofing the organisation. Always bring it back to people.”