Digital transformation and trust among the biggest fears keeping Australian business leaders up at night
Digital transformation and innovation and disruption are the two big fears keeping Australian business leaders up at night, a survey from KPMG Australia has found.
However, the survey of more than 220 executives across businesses ranging from those with less than 50 staff to those with over $1 billion in yearly revenue found that while many are worried about it, digital transformation means different things to different leaders, causing further angst.
Amanda Hicks, partner at KPMG Acuity, said that while leaders see a mandate for digital transformation, innovation, and changing business models to better meet increasing customer needs and expectations, they also see that this needs to be done in a period of potentially increasing regulation, political uncertainty, and cost pressures.
“It can be seen as a difficult balancing act,” she said.
The rise of the customer as a key concern itself is an interesting one – after all, as NAB chairman Dr Ken Henry told the banking Royal Commission last week, one of the issues the inquiry has been exploring is whether the banks have put shareholders above the needs of the customer, an issue Henry believes “goes to the state of capitalism”.
Not only was the customer a key concern in KPMG’s survey, but the customer was also cited in relation to other concerns; for example, in looking at big data, respondents said the real issue was ensuring every sector of the business has a plan to collect and deploy its data to create real value for customers.
Paul Howes, KPMG Partner-in-Charge, customer, brand & marketing advisory, said the customer has traditionally occupied “a pretty weak bargaining position”, however this is changing.
“Organisations know they have to genuinely put customer first. Many will view a huge part of this as digital transformation – but digital is an enabler, not an outcome, and there is a trap of falling into a tech-first approach,” he said.
“Successful outcomes put the customer at the centre and respond to a human need. Customers talk about outcomes, not necessarily service delivery models. They want the right mix of face-to-face human interaction and automation.”
With the customer a focus, so too is trust.
Not surprisingly, given the political climate and the revelations that have emerged from the Royal Commission throughout the year, KPMG’s Alison Kitchen said that the “collapse of public trust” in our institutions is “the defining challenge of our moment”.
However, the report stated that the “regulation avalanche” that leaders are worried will fall upon their organisations over the next 12 to 18 months may provide a silver lining.
Beyond the Royal Commission, ASIC will be given greater enforcement powers, there will be more prescriptive ASX guidelines, and the ACCC will also have greater impact in its focus areas.
According to KPMG, the shake up could provide the impetus to build customer engagement, trust, and growth. Looking for ways to simultaneously comply, and reinvent, has the potential to drive revenue to an organisation, KPMG noted, because customers will want to go to that organisation rather than a competitor.
An emphasis on compliance and putting the customer first will also help foster innovation and in turn drive value.
The top 10 concerns were:
– digital transformation
– innovation and disruption
– political paralysis
– customer centricity
– cost competitiveness
– public trust
– cybersecurity and data privacy
– big data
– infrastructure and liveable cities