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Monday, 20 May 2019 22:14

NZ businesses have less than 2 years before digital disruption hits: report Featured


New Zealand businesses have less than two years to go digital before disruption hits, according to newly released research undertaken by global IT services company DXC Technology and technology analyst firm Telsyte.

And, according to DXC and Telsyte, four in 10 organisations in New Zealand are fearful that their enterprises may be materially disrupted by the transformation to digital.

The study — Beyond Disruption: New Zealand organisations race to digital transformation success — provides new insights into the digital challenges and opportunities for 158 New Zealand organisations.

The research found that digital disruption is already impacting two-thirds of New Zealand organisations that participated in the survey – and three quarters of all respondents currently have a digital strategy in place, which DXC and Telsyte says indicated that awareness of disruption is high.

“New Zealand business leaders have a sense of urgency around digital transformation, with 60% understanding they have less than two years to integrate a digital initiative before the full impact of digital disruption hits. This sense of urgency is translating into action as New Zealand organisations take a proactive approach to disruption,” said John Mazenier, country leader for New Zealand, DXC Technology.

According to the study, the fear of “Uberisation” — or disruption by a new digital player — is widespread, as almost two in five (39%) respondents believe their organisation has the potential to be adversely affected.

The study also found having a competitive digital strategy is highly valued by New Zealand organisations, as 41% of respondents place importance on ‘leapfrogging’ their competitors. Leapfrogging refers to producing radical innovations that allow an organisation to overtake competitors.

And as a result of digital disruption and transformation, as many as 20% of staff roles would be retrained and a further 13% newly created to meet the changing demand.

“It is pleasing to see that more jobs will be created in New Zealand to meet the growth of digital transformation, with over a fifth (22%) of organisations creating artificial intelligence and technology-related roles in the next 12 months. Importantly, the majority (88%) of New Zealand organisations see potential in the collaboration between humans and AI to complete organisational tasks, indicating both a strong understanding and early adoption of this growing technology disruption.”

According to the study, larger organisations are also more aware of the impact of digital disruption on their industry, requiring technology recruitment and agile training to be more adaptive to the dynamic digital market place.

And an organisation-wide approach to digital transformation is high on the agenda for New Zealand organisations, with 90% of those with business-unit or siloed strategies looking to transition to a holistic strategy.

DXC says that as businesses transition to an organisation-wide strategy, the chief executive becomes critical to effectively drive cultural change; however, less than half of New Zealand organisations have a culture of change or innovation.

The study reveals that the CIO often remains the lead of digital strategy in New Zealand organisations, which DXC says is good for strategy development but needs to shift to facilitate the CEO’s driving more cultural change in the organisation.

“Shadow IT remains highly prevalent in New Zealand organisations, with 80% of respondents’ non-IT business units spending on IT-related products and services. Consequently, this prolific procurement by non-IT business units has led to problems arising almost a third of the time (31%). The main challenges of shadow IT for New Zealand organisations stem from inconsistent technology selection (46%), integration requirements (44%) and higher costs (36%),” says DXC.

“New Zealand organisations believe placing IT as the strategic driver of cross-functional collaborative projects with non-IT business units will help counter these challenges and ensure successful project delivery and less wastage.

“Overall, apprehension towards digital transformation is lifting – yet, cultural concerns about failure remain within the New Zealand business community. The study revealed that one in six technology and business initiatives end up in failure for New Zealand organisations, with over a third (35%) of these failures related to technical issues.”

The study also found that employee engagement (33%), limited budget (32%) and cyber security (28%) are the main challenges for IT and digital transformation projects. And New Zealand organisations are getting better at communicating digital strategy to staff, with over a third of respondents (39%) saying clear strategy communication is a criteria for a successful digital strategy, alongside better understanding of customer and employee engagement.

“New Zealand business culture needs to be more accepting of the benefits of ‘fast failure’ and use it as part of an overall digital strategy. This translates into the ability to try something quickly and discontinue it if it is not delivering on the promise, and that can mean the difference between its ultimate success and failure,” Mazenier said.

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Peter Dinham

Peter Dinham - retired in 2020. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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