Digital transformation technology passé in NZ, says IDC

NZ businesses placing emphasis on underlying organisational structures and processes, rather than the technology

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According to IT research firm IDC, leading organisations in New Zealand are shifting their digital transformation focus from enabling technologies to enablers of excellence.

“The future of culture, co-innovation, smart ecosystems, cybersecure platforms and the digitally enhanced workplace will be on digital transformation leaders’ agenda by 2023, or earlier,” IDC says.

“In the near term, almost half of organisations will have shifted from legacy key performance indicators (KPIs) to enhanced digital metrics … to gain a deep insight into the business value of DX.”

This time last year IDC said that by 2020, more than half of New Zealand businesses would have become 'digitally determined', having transformed their markets with new business models, and developed digitally enhanced products and services, and that by 2023 digital would be fully embedded in organisations and no longer regarded as something special.

The latest predictions come from a new report, IDC FutureScape: Worldwide Digital Transformation 2020 Predictions – A New Zealand Perspective. IDC country manager for New Zealand, Louise Francis, said they reflected the importance New Zealand businesses are placing on the underlying organisational structures and processes, rather than the technology.

According to Francis the shift in focus will provide businesses with the capability to move beyond islands of innovation to a holistic and embedded approach for accelerated value and enhanced competitiveness.

“Businesses are getting a much better handle on how digital transformation innovations can be integrated and embedded across the organisation and as a result are looking at how to supercharge their capabilities to compete in a digital economy, from AI at scale to digitally enhanced workers,” she said.

"With digital transformation spending in New Zealand set to grow to over 55 percent of all ICT investment within the next two years it will be critical for businesses to invest in data intelligence and metrics that resonates with the business.”

IDC has identified a number of ways in which the shift in focus from digital transformation technologies to enablers of excellence will play out. In no particular order, these are:

- Future of Culture: By 2024, leaders in 60 percent of NZX-listed organisations will have mastered “future of culture” traits such as empathy, empowerment, innovation and customer-data centricity to achieve leadership as scale.

- Digital Co-Innovation: By 2022, empathy among brands and for customers, will drive ecosystem collaboration and co-innovation among partners and competitors that will drive 25 percent collective growth in customer lifetime value.

- AI at Scale: By 2022, with proactive, hyper-speed operational changes and market reactions, AI-powered organisations will respond to customers, competitors, regulators, and partners at least one third faster than their peers.

- Digital Offerings: By 2022  40 percent of organisations will neglect investing in market-driven operations and will lose market share to existing competitors that made the investments, as well as to new digital entries.

- Digitally Enhanced Workers: By 2022, new future of work practices expand the functionality and effectiveness of the digital workforce by 30 percent, fuelling an acceleration of productivity and innovation at practicing organisations.

- Digital Investment: By 2022, DX spending will grow to over 55 percent of all ICT investment from 45 percent today, with the largest growth in data intelligence and analytics as companies create information-based competitive advantages.

- Ecosystem Force Multipliers: By 2024, 75 percent of digital leaders will devise and differentiate end-customer value measures from their platform ecosystem participation, including an estimate of the ecosystem multiplier effects.

- Digital KPIs Mature: By 2020, 45 percent of companies have aligned digital KPIs to direct business value measures of revenue and profitability, eliminating today’s measurement crisis where DX KPIs are not directly aligned.

- Platforms Modernise: Driven both by escalating cyberthreats and needed new functionality, 70 percent of organisations will aggressively modernise legacy systems with extensive new technology platform investments through 2023.

- Invest for Insight: By 2023, enterprises seeking to monetise benefits of new intelligence technologies will invest over $150 million in New Zealand making the DX business decision analytics and AI a nexus for digital innovation.

Copyright © 2020 IDG Communications, Inc.

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