Digital transformation is more than implementing the newest technology and software, it also includes evolving and connecting systems, processes and workplace cultures too to benefit consumers and businesses alike.
In short, it is about people and improving their experiences with your business. As the New Zealand Digital Government states, “it means doing things differently in an increasingly connected world—using new mindsets, skillsets, technologies and data to benefit people, government and the economy.”
The benefits of digital transformation are extensive, from better operational efficiency and customer experiences to reduced costs around new product development and poor quality products. Currently, the top technologies already in use are big data/analytics (58 per cent) (such as sensor technology and transactional data) mobile technology (59 per cent) (think the likes of Uber, Menulog and banking apps) and APIs and embeddable tech (40 per cent) (e.g. Shopify, Paypal, weather apps, log-in using Facebook/Twitter/ Google feature)2. However, future predictions indicate that automation, artificial intelligence (AI) and machine learning will revolutionise industries going forward.
Globally, the global digital transformation is projected to grow at a compound annual growth rate of 23.6 per cent from 2021 to 2028. With the global digital transformation market valued at USD336.14 billion in 2020, this growth rate could see that market value reach into the trillions by the end of the decade.
In short, digital transformation is coming. The sooner businesses start thinking about how to adapt, adopt and leverage the technology, data, analytics and experiences it can offer, the more competitive those businesses will be in the long term.
Despite our history as a highly innovative country, New Zealand is behind the rest of the world when it comes to digital transformation. As mentioned earlier, 59 per cent of New Zealand organisations don’t have a strategy to develop their digital talents and 58 per cent don’t have a dedicated budget for digital transformation. Further still, the same research also estimated only 3 per cent of organisations operate on a single autonomous digital platform fuelled by shared data and intelligence3.
As commentators have noted, we love the idea of innovation, but not its implementation.
However, it’s not all bad news. Since the start of Covid-19, digital transformation has accelerated 40 times faster in New Zealand. New initiatives are also starting with the government’s $20 million Small Business Initiative to help small businesses that may otherwise not have the resources to upskill and adapt to the changing commerce and consumer landscape.
Digitally agile businesses are capable of adapting to change—whether it’s technological breakthroughs or a worldwide pandemic. A global study found that 72 per cent of companies that were the first in their industries to experiment with new technologies during the crisis reported a very effective response to Covid-19.
However, research closer to home has found over 50 per cent of New Zealand organisations were not able to adapt their business processes in response to COVID-19 and struggled to change financial plans, budgets and organisational structures4.
With the world shifting ever more towards the digital, consumers and customer expectations are set to follow. Remote working and online collaboration have become commonplace, businesses have shifted their servers to the cloud, demand for online services and product offerings is set to increase, technology is connecting machines and people in real-time—all these digital ways of working are helping businesses keep their cashflow up and their downtime, well, down.
Digital transformation is more than upgrading your systems. It is about connecting systems.
