‘Say-do’ gap is hindering digital transformation

MEDIA RELEASE

Research shows ‘say-do’ gap is hindering the digital transformation of New Zealand businesses

Microsoft Asia Digital Transformation Study shows that business leaders are only starting to take digital disruption and new technologies seriously

AUCKLAND, 10 March 2017 – New Zealand business leaders are aware of the urgent need to transform digitally to address the changing business climate, however Microsoft’s recent study[1] found that this transformation for most organisations in New Zealand is still in its infancy. In fact, only 36% of business leaders have a full digital transformation strategy while 17% said they have very limited or no strategy in place at all. Less than half (47%) of respondents are in progress with specific digital transformation initiatives for selected parts of their business.

Yet three quarters of respondents do agree that they need to transform to a digital business to enable future growth and, more specifically, that new data insights can lead to new revenue streams for their organisations (88% agree).

Barrie Sheers, Managing Director for Microsoft New Zealand says, “It’s concerning to see that while there is widespread acknowledgement on the need to transform, Kiwi businesses are doing so incrementally and not keeping pace with their regional counterparts. Leaders need to rethink business models, uncover and use data insights and embrace a different way of bringing together people, data, and processes which create value in a new digital business.”

Barriers to Digital Transformation
While there is no doubt that digital transformation will bring significant benefits for both businesses and employees, the path to digital transformation has been slow. According to business leaders in the study, the top six barriers to digital transformation are, in order of priority:

1. Lack of a digitally-skilled workforce able to optimise digital businesses
2. Lack of government policies and ICT infrastructure to provide a sound digital transformation platform for organisations
3. Lack of a technology leader who is also business savvy
4. Lack of organisational leadership to ideate, plan and execute digital transformation
5. Tight regulations that limit ability to transform digitally and,
6. No urgency or need to counter disruptors within the industry

Along with the top six barriers, there is also a continued perception among business leaders that the cloud is less secure which is also potentially impacting on the uptake and speed of implementing a digital transformation strategy.

“Ultimately, people don’t use technology that they don’t trust. This is a golden rule that applies to organisations and individuals alike as we live in a mobile-first and cloud-first world. Ensuring security, privacy, and compliance are important to enabling businesses to carry out digital transformation with confidence,” Sheers says.

“With the rise of mobile workers introducing new devices, apps, and data into organisations today, protecting sensitive company data requires new and integrated approaches, all of which exist and have been significantly invested in. Business leaders may be less privy to these advances being made in the cloud on security and privacy and need more exposure on how, with the current threat environment, it will be safer being in the cloud than relying on traditional forms of IT.”

The rise of the Internet of Things (IoT), artificial intelligence (AI), advanced data analytics, and mixed reality are all examples of cutting-edge new technologies powered by cloud computing which will create limitless possibilities in transforming the way people work, live and play.

“Emerging technologies, specifically, cloud, analytics and new capabilities like AI and IoT will give organisations new capability to transform however real transformation only happens when businesses bring their people along with them. Equipping employees with the right tools to enable them to be part of solution and be more responsive, data driven and customer centric are also essential,” says Sheers.

“Organisations that do not evolve fast enough will be less competitive or even obsolete as they face disruptions no matter what industry. Empowering employees, engaging customers, optimising operations and transforming with new products, services or business models, are the real opportunities for kiwi businesses. Our study has shown there is an appetite to change and some are already acting on the need for digital transformation however as an industry we need to continue to demonstrate and overcome perceived barriers to make this transformation into a reality.”

About the study:
The Microsoft Asia Digital Transformation Study surveyed 1,494 business leaders from the Asia Pacific, including 100 from New Zealand, to understand how business leaders are embracing the digital era.
All respondents were pre-qualified as being involved in shaping their organisations’ digital strategy.

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Notes to Editor:

Microsoft New Zealand has developed four priorities to help Kiwi businesses when starting out to define their digital transformation strategy:

1. Engage customers: Consumers are savvier than ever before, with access to data ensuring they are often educated on a product or service before engaging. To stand out, organisations will need to deliver a new wave of deeply contextual and personalized experiences, while balancing security and user trust.
2. Empower employees: The nature of how we work—and the workplace itself—has undergone a dramatic evolution. Organisations can empower their people and help them do their jobs better with the power of mobility, which allows employees to collaborate from anywhere, on any device, and access apps and data they need, while mitigating security risks.
3. Optimise operations: Technology disrupters such as IoT are accelerating the potential for businesses to optimise their operations. This can be done by gathering data across a wide, dispersed set of endpoints, drawing insights through advanced analytics, and then applying those learnings to introduce improvements on a continuous basis. Organisations in manufacturing, retail, and even healthcare can shift from merely reacting to events to respond in real time, or even pre-emptively anticipating and solving customer issues.
4. Transform products & business models: The opportunity to embed software and technology directly into products and services is evolving how organisations deliver value, enabling new business models, and disrupting established markets.

[1] The Microsoft Asia Digital Transformation Study was conducted between October to November 2016 involving 1,494 business leaders in 13 Asia Pacific markets. The 13 markets include Australia, China, Hong Kong, Indonesia, India, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Taiwan and Thailand. All respondents were pre-qualified as being involved in shaping their organisations’ digital strategy, and are working in firms with more than 250 employees.

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