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Dell Index reveals we are not the leaders we think we are

05 Nov 2018

Just 4.5% of Australian and New Zealand businesses are Digital Leaders, according to the Dell Technologies Digital Transformation Index (the DT Index).

The DT Index, which was completed in collaboration with Intel, maps digital transformation progress of mid to large-sized companies and examines the digital hopes and fears of business leaders.

The study reveals that 30% of Australian and New Zealand heads of business believe their organisation will struggle to meet changing customer demands within just five years and 22% of Australian and New Zealand business fear they’ll be left behind.

The DT Index’s calculations are based on companies’ perceived performance in the following areas: delivering against the core attributes of a digital business, their existing IT strategy, workforce transformation strategy and planned investments.

Two years after the DT Index’s initial launch in 2016, Dell Technologies and Intel have more than doubled the scope of the research, from 16 countries to 42 and benchmarked 4,600 businesses, using the following groupings:

Benchmark groups

Description

A/NZ analysis

AU analysis

NZ analysis

Digital Leaders

Digital transformation, in its various forms, is ingrained in the DNA of the business

4.5%

7%

2%

Digital Adopters

Have a mature digital plan, investments and innovations in place

18%

19%

17%

Digital Evaluators

Cautiously and gradually embracing digital transformation; planning and investing for the future

38%

43%

33%

Digital Followers

Very few digital investments; tentatively starting to plan for the future

30%

28%

32%

Digital Laggards

Do not have a digital plan, limited initiatives and investments in place

9.5%

3%

16%

The Digital Transformation Index also reveals that too many companies are coasting in the middle group or stuck in the bottom two groups, meaning they’re either moving too slowly or don’t even have a digital plan in place.

Barriers to digital transformation

According to the research, 93% of Australian and New Zealand businesses are facing major impediments to digital transformation today.

The top five barriers to digital transformation for Australia and New Zealand are:

  1. Lack of budget and resources (36%)

  2. Data privacy and cybersecurity concerns (34.5%)

  3. Immature digital culture: lack of alignment and collaboration across the company (31.5%)

  4. Information overload (29%)

  5. Lack of the right in-house skill sets and expertise (27.5%)

These barriers are hampering digital transformation efforts. For instance, 78% of Australian and New Zealand business leaders believe that digital transformation should be more widespread throughout the organisation.

Only 14% of Australian and New Zealand businesses strongly agree they’ll disrupt rather than being disrupted within five years.

“We’ve talked about being on the cusp of tremendous change for some time now. That’s no longer the case,” says Dell EMC A/NZ enterprise managing director Mark Fioretto.

“The next digital era has arrived and it’s reshaping the way we live, work and conduct business. Which means that time is of the essence. Genuine transformation needs to happen now, and it needs to be radical.”

Conquering challenges

The research indicates that businesses are taking steps to overcome their barriers and the threat of being outmanoeuvred by more nimble, innovative players. Although progress in these areas is patchy, even between Australian and New Zealand businesses:

  • 40% of Australian and 36% of New Zealand businesses are embracing agile software development (allowing them to code and securely launch new applications within much shorter cycles)

  • 50% of Australian and 41% of New Zealand businesses are building security and privacy into all devices, applications and algorithms

  • Both countries have acknowledged a skills gap with 43% of Australian and 40% of New Zealand businesses striving to develop the right skills sets and expertise in-house, such as teaching staff how to code

  • 62% of Australian businesses are sharing knowledge across functions, by equipping IT leaders with business skills and business leaders with IT skills, compared to 43% of New Zealand businesses

Companies are also turning to emerging technologies and cybersecurity to power (and secure) their transformation.

Nine in 10 Australian and New Zealand businesses intend to invest in technology initiatives that enable digital business transformation. Planned investments within the next one to three years are:

  • 53% of A/NZ businesses intend to invest in cybersecurity

  • 42.5% of A/NZ businesses intend to invest in multi-cloud

  • 48% of A/NZ businesses intend to invest in IoT technologies

  • 40% of A/NZ businesses intend to invest in artificial intelligence

  • 37% of A/NZ businesses intend to invest in flash

A small but significant number of businesses are even planning to experiment with nascent technologies.

19% of Australian and New Zealand businesses will be investing in blockchain, 14.5% in quantum computing and 27% in VR/AR.

“It’s an exciting time to be in business. We’re at a crucial intersection - where technology, business and mankind meet to create a better, more connected world,” adds Fioretto.

“However, only technology-centred organisations will reap the rewards offered by a digital business model, including the ability to move quickly, to automate everything and to delight customers. This is why digital transformation needs to be a number one priority.”

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