Microsoft research shows ‘say-do’ gap is hindering the digital transformation of NZ businesses

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.”

[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.