Just 32 percent of Australian businesses have an organisational-wide digital strategy in place, report finds

Though the growth of corporates opening their own innovation labs and/or flocking to platforms like Coventured to more easily connect with startups often makes it seem that more and more organisations are getting wise to the threat of disruption, a report has found almost 50 percent of Australian businesses believe either their industry or products and services are not being disrupted.

The report from Telsyte, commissioned by DXC Technology, surveyed 403 business and tech decision makers across organisations with 20 or more employees to find that 60 percent are keeping an eye on digital trends and will react if and when it impacts their organisation.

Defining a ‘digital strategy’ as defining the existing capability of IT and how it plans to apply technology for business outcomes, the report found nine percent of Australian organisations have no digital strategy at all, while 25 percent are ‘investigating’ the creation of one; these organisations are interested in partnering with others that can help them overtake more developed competitors.

Meanwhile, 34 percent of organisations have digital strategies across varied business units, where innovation is about the smaller steps, such as introducing new digital services, mobile apps, and projects, as opposed to structural or cultural change within an organisation; they are typically less concerned about disruption.

Just 32 percent of businesses have an organisational-wide digital strategy in place.

“There is a level of complacency among Australian businesses that enough is being done to handle the impending disruption to their markets and go-to-market strategies,” said Foad Fadaghi, managing director of Telsyte.

“The challenge is that when you dig a little deeper, many organisations are simply equating digital with building more apps.”

This, the report found, is having an impact on IT spend and its effectiveness.

IT budgets are expected to grow at an average of 5.4 percent across 2018, with organisations boasting business unit-level digital strategies looking to increase their spend the most.

However, given these units are often focused on increasing the number of products and services that may be tactically suited for their particular department but lack direction for the entire organisation, the report suggests various business units could be doubling up on suppliers or technologies, leading to waste.

Twenty-three percent of respondents admitted that their organisation had experienced problems arising from non-IT business units purchasing IT products and services, with 49 percent noting higher costs, 38 percent highlighting issues around security, and 37 percent highlighting inconsistent tech selection.

With getting buy-in at the executive level critical to driving structural and cultural change within an organisation, the report found companies with an organisation-wide digital strategy are 10 percent more likely to have regular reporting of IT to the board; this, in turn, leads to more support from the board for digital work.

On the flip side, just 32 percent of IT leaders in organisations with no digital strategy provide regular updates to their board.

Image: Seelan Nayagam, MD of DXC Technology Australia & NZ. Source: AIPM.