Australia’s businesses are at a critical juncture. After decades of change—both disruptive and insidious in nature—that altered long-held norms and ways of doing business, they face a game-changing choice: Continue working the old-fashioned way and risk punishing outcomes or focus their technology investments on business and operational innovation.
Choosing the latter will require tight alignment of technology initiatives with business goals, process digitization and sure-footed strategic planning. It seems, however, that many Australian businesses are failing to read the writing on the wall.
This, in a nutshell, is a key finding of recent Economist Impact research supported by Cognizant. (To learn more, see our report, “Advance Australia prepare: how to make Australian businesses future-ready”.)
Our analysis of Economist Impact data reveals that Australian businesses emerged from the pandemic heavy on technology but short on the ability to unlock strategic value from these investments, pivot working capital to drive productivity gains and achieve environmental, sustainability and governance (ESG) targets.
What stands out is that Australian businesses are behind their counterparts in other regions when it comes to fully embracing digital-first business models. This has repercussions far and wide.
Business leaders in Australia face three major challenges in achieving these objectives:
- The transformation gap. Australian organizations are behind other countries in translating high technology adoption into enterprise transformation, from digital business model innovation (strategy) to process digitization (operations). Moreover, the misalignment of business strategy and measurement frameworks means that while projects perform well against traditional IT metrics (being on-budget and on-time), they are not delivering against business objectives.
- The process–productivity paradox. Modern operating models need cross-functional teams with the right digital skills and that are empowered by clear governance and decision making with tech-savvy leadership at all levels. While few respondents in the study report talent gaps, suboptimal digitization of workflows and lagging investments in re-training and/or redeployment of talent are causing Australia’s businesses to miss out on opportunities to capture value through process digitization.
- Mismatched operational priorities. Australian businesses are also behind other countries in prioritizing operational enhancements across the organization. Below-par operational alignment and an inability to put data to use have cascading effects downstream, ultimately impacting organizations’ ability to predict change and innovate.
Addressing these challenges calls for an assessment of the roadblocks faced by businesses and a clear plan of action to address them. Here are steps Australian leaders can take to get started.
Transform business, not just technology
Australian businesses have invested in core, advanced and emerging technologies. More than 80% have invested in, or plan to invest in, cloud and Internet of Things (IoT), and more than 60% say the same about artificial intelligence (AI)/machine learning, low-/no-code technologies and advanced cloud.
But this investment has yet to translate into significant realized value (see Figure 1). To boost return on value, Australian companies will need to better align their technology initiatives and operations with evolving business models and build the necessary talent pool to unlock tech’s potential.
Businesses struggle to unlock the full potential of their tech
To what extent are the technologies/methodologies already adopted by your business department delivering strategic value to your operations? (Percent of respondents saying significant value)