IFS opinion: Are ANZ companies doing enough to transform themselves?
When I first saw the results of IFS's Digital Transformation Survey of nearly 500 senior decision makers in 20+ countries, I was surprised that only 50% of respondents in Australia/NZ said they had a clear strategy for digital transformation.
The reason wasn't that 50% seemed like a low figure based on my experience. Rather, I was surprised that it was less than any other region surveyed, and that included ASEAN, Benelux, Brazil, China, Finland, Poland, Scandinavia and the US. On average, the global figure was 60% and in some regions, like Scandinavia, it was around 66%.
My perception had been that, amongst the industries surveyed – and this ranged across industrial manufacturing, construction, retail, oil and gas, automotive, energy and utilities and some others – that Australia/NZ was relatively advanced from a technology perspective. After all, conventional wisdom has it that Australia is one of the world's most advanced users of technology, even though we may not have a big tech industry.
But I'm beginning to question this assumption as the pace of technological change picks up around the world. While IFS is seeing tremendous innovation in a range of local industries the question is: Is it enough to remain globally competitive in this era of disruptive change?
My concerns increased when I drilled down into some of the other comparative breakdowns of the Digital Transformation Survey, particularly where respondents were asked to rate various disruptive technologies' importance in driving digital transformation in their industries.
There was only one disruptive technology that respondents from Australia/NZ rated higher that the global average. That was Cloud computing, which locals rated 60 out of 100 in importance compared with a global average of 59. But in every other category the figures were down on the global average. For example, we rated the Internet of Things 53 out of 100, vs 59 globally; Machine learning 44, vs 53 globally; and Wearable technology 38, vs 48 globally.
While the differences weren't enormous, a clear pattern emerged. A lower proportion of Australian/NZ companies in the surveyed industries appear to have seriously evaluated these disruptive technologies and included them in their digital transformation strategies.
So, what should we do about it? Firstly, I think we should all be aware that we can't take the performance of any of our industries for granted, no matter how well it has performed in the past, and how sophisticated we may think it is. And this includes industries like mining and energy, which benefitted from huge levels of overseas investment during the boom, and more recently construction.
And secondly, we need to take technological disruption more seriously and work together at the national, industry and enterprise level to develop innovation strategies that enable digital transformation.
The recent Australian election campaign was a missed opportunity to debate these issues, in my opinion. The innovation debate has been far too narrowly focussed around things like funding for start-up companies, collaboration via innovation hubs, better STEM (science, technology, engineering and mathematics) education, and improved access to government procurement contracts.
I remain a big supporter of efforts to kick-start new innovation-based industries and support growth in start-ups. But what is more urgently required are strategies that would have an immediate impact in helping existing Australian enterprises to innovate and compete globally.
Article by Rob Stummer, managing director, IFS Australia & New Zealand.