Thursday, 30 July 2020 11:48

Tech investment increasing despite ‘economic headwinds’, says analyst

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Organisations in Australia are turning their attention to business transformation to improve employee systems as the "post-pandemic" world increases the reliance on technology, according to a new study which reveals that spending and investment on IT is growing despite the current economic headwinds.

The Telsyte Australian Digital Workplace Study 2020 found Australian IT spending - or investment - is expected to be spared from the impact of the recent COVID 19 pandemic disruptions.

And, overall, the research reveals that organisations plan to increase spending by 5% in 2020, a rate in line with research conducted by Telsyte in December 2019, showing that despite the economic headwinds, tech seems to be spared when organisations are looking at investing in technology.

According to Telsyte efforts have swung the focus from customers back to employees – a big shift from 2019 - with this investment over the next 12 months shifting to workplace modernisation (75%), data analytics (72%) cloud (68%), modernising business applications (66%), and cybersecurity (66%), including better security for remote workers.

The research also shows another “big mover” is improving employee productivity and engagement, which is increasingly driven by technology as more people work from home.

Despite the challenges, Telsyte says it found more than a quarter of IT budgets are now spent on business transformation; rising to almost one third in larger corporates.

The desire to transform is also being driven by non-IT business units, with more than half of all organisations also spending non-IT budgets on technology

Telsyte Managing Director, Foad Fadaghi, says spending on digital transformation was already set to increase in 2020 for a range of IT services, even before COVID-19 struck.

“Over 80% of organisations indicate they have fast tracked their transformation initiatives,” Fadaghi says, adding that this “uberisation” of industries is the utilisation of computing platforms, such as mobile applications, to facilitate transactions between clients and providers (sometimes peer to peer), often bypassing the role of centrally planned corporations.

Telsyte’s research also found more than 1 in 3 Australian organisations are afraid their industry will be “uberised” and there are growing “uberisation” fears among financial and insurance services, manufacturing and education industries.

As a result, Telsyte says more than half of Australian organisations have launched transformation initiatives to better prepare for future disruption both from new competitors but also market disruptions such as the global pandemic.

“Even with lofty goals for digital, Australian organisations are finding it tough to successfully execute a transformation program,” Telsyte said, noting that the study found around one-in-six initiatives end in failure, however organisations with a culture of innovation were less likely to fail,” Telsyte says.

“Furthermore, up to a one-third are unable to scale their proof-of-concepts, despite over two-thirds having one.

“The main problem (38%) being technical issues for failed initiatives with conflicting projects and priorities often another major cause for failure.”

According to Telsyte, more digital transformation outcomes are needed for digital employees, and as companies transform, job seekers are showing the importance of their workplaces being equipped for the digital future - and with more than 3-in-5 workers being “digital natives” in 2020, “it is incumbent upon companies to modernise workplaces”.

Telsyte found more than a third (36%) of jobseekers consider the organisation’s digital maturity important when applying to work at a company and a further 44% see digital maturity as important when considering to stay with their current employer.

“Companies are recognising the need for more future skills and over two thirds (69%) are providing training for employees such as IT service management, agile, project management, design thinking, cybersecurity, change management and others,” Telsyte notes.

The study also looked at the role of artificial intelligence for organisational transformation, and Telsyte says the research found that most organisations are “cautious, but comfortable” with any AI risks, with 25% looking to implement AI wherever possible - and a further 54% are comfortable to experiment with AI with limitations.

O the importance of customer service, Telsyte found Australian consumers are yet to be “on the same page as businesses when it comes to AI”. For example, more than 70% of consumers are uncomfortable with AI that speaks “indistinguishably from a human” (e.g. Google Duplex), but only half of organisations believe that they should declare the human sounding voice is AI.


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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. 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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