Digital investment is increasing at pace but it needs to encompass the whole business
Now in its 19th year, the Harvey Nash/KPMG CIO Survey 2017 is the largest global survey of IT leadership, with 4,500 responses from CIOs and technology executives across 86 countries, including 174 Australian respondents.
This year’s survey once again reinforces the trend of recent years with many organisations increasing their investment in digital. In Australia, the number of organisations with enterprise-wide digital strategies has increased 21 percent in the last two years, with the number of organisations now boasting a Chief Digital Officer increasing by 40 percent over last year.
Transformation for the whole business
However, companies in the thrall of this digital revolution must ensure that enterprise-wide truly means the whole of the business. Successful organisations understand that delivering great digital service to their customers requires much more than an intuitive digital user experience. Yes short-term gains can be achieved with point solutions like mobile apps or social media engagement, but sustainable competitive advantage only comes when organisations go beyond restructuring operations in customer-facing functions and fully integrate across the front, middle and back offices to create a truly digital enterprise. The businesses we see as digital leaders are investing in transforming every facet of their organisation, from front to back, from capability to culture, to align behind the digital promise to their customers.
Agility not schizophrenia
The ability to change at pace is also cited as a critical capability for companies in this modern digital age. However, in the desire to be agile, we must not lose sight of the fundamentals of business. FOMO, the fear of missing out, is something we often see as a fashionable arbiter in the decision making process of many business managers today; ‘if we don’t do it our competitors will!’ Ever heard that said? It’s disappointing to see companies react with haste to competitor’s announcements rather than take time to review their response. Absolutely, it’s important to be agile and ‘pivot’ when required but schizophrenic behaviour rarely has a good outcome in the long term. Conversely, taking a management team off-site for a day every year to develop the strategy now seems archaic. And did we really believe that all the conditions that needed to exist to develop a perfect strategy would come together on the first Tuesday in May? So while strategy making needs to be a more organic process in the 21st century let’s not abandon the idea of a well-planned strategy completely; albeit one that may change its wardrobe a little more frequently.
Some of the key findings include:
- Two-thirds of Australian organisations are adapting their technology strategy because of unprecedented global political and economic uncertainty
- However, 93 percent are maintaining or ramping up investment in innovation, including in digital labour
- Organisations with enterprise-wide digital strategies increased 21 percent in just two years (versus 52 percent globally), and those organisations with a Chief Digital Officer increased 40 percent over last year
- Cyber security vulnerability is at an all-time high with a third of Australian IT leaders (31 percent) reporting their organisation had been subject to a major cyber-attack in the past 24 months – a 107 percent increase from 2014
- Big data/analytics is the most in-demand skill. In Australia the fastest growing demand for a technology skill this year was security and resilience, compared to enterprise architecture globally
- IT projects are more complex; and weak ownership, an overly optimistic approach, and unclear objectives are the main reasons IT projects fail
Further analysis of the data also found a clear divergence between organisations that are effective at digital transformation and those that are not. CIOs at these ‘digital leader’ organisations are almost twice as likely to be leading innovation across the business, and their organisations are investing in cognitive automation at four times the rate of others.