NZ falling behind in DX - here's why and how to break those barriers

New Zealand businesses may be talking digital transformation, but in reality, very few actually have a digital transformation strategy with a number of key barriers holding them back, Microsoft New Zealand says.

Data from Microsoft's Digital Transformation Study, shows that while 75% of Kiwi business leaders feel digital transformation (DX) is key to their organisation's survival – and 88% says new data insights can lead to new revenue streams for their business – only 36% of business leaders have a full DX strategy in place and 17% say they have very limited or no strategy in place.

Just 47% of respondents in the survey have specific digital transformation plans for selected parts of their business in progress.

The Kiwi results are concerning, Microsoft New Zealand managing director Barrie Sheers says. He's urging businesses to take action now.

"It's concerning to see that while there is widespread acknowledgement on the need to transform, Kiwi businesses are doing so incrementally and not keeping pace with their regional counterparts," Sheers says.

"Leaders need to rethink business models, uncover and use data insights and embrace a different way of bringing together people, data and processes which create value in a new digital business," he says.

The survey, which included 100 local business leaders, highlighted six key barriers to digital transformation, with the lack of a digitally-skilled workforce who are able to optimise digital businesses the biggest issue.

Lack of government policies and ICT infrastructure to provide a sound digital transformation platform for organsiations; lack of a technology leader who is also business savvy; and lack of organistaional leadership to ideate, plan and execute digital transformation were also key.

Tight regulations that limit ability to transform digitally and no urgency or need to counter disruptors within the industry round out the top six barriers, Microsoft says.

However, Microsoft says a continued perception that cloud is less secure is also potentially impacting uptake and speed of implementation of DX strategies.

"Ultimately, people don't use technology that they don't trust," Sheers says.

"This is a golden rule that applies to organisations and individuals alike as we live in a mobile-first and cloud-first world. Ensuring security, privacy and compliance are important to enabling businesses to carry out digital transformation with confidence.

Sheers says the rise of mobile workers, bringing an influx of new devices, apps and data, means new and integrated approaches are required to protecting sensitive company data, but he notes that all of those approaches already exists and have been significantly invested in.

"Business leaders may be less privy to these advances being made in the cloud on security and privacy and need more exposure on how, with the current threat environment, it will be safer being in the cloud than relying on traditional forms of IT," he says.

"Emerging technologies, specifically, cloud, analytics and new capabilities like AI and IoT will give organisations new capability to transform, however real transformation only happens when businesses bring their people along with them.

"Equipping employees with the right tools to enable them to be part of solution and be more responsive, data driven and customer centric are also essential," says Sheers.

"Organisations that do not evolve fast enough will be less competitive or even obsolete as they face disruptions no matter what industry," Sheers says.

"Empowering employees, engaging customers, optimising operations and transforming with new products, services or business models, are the real opportunities for kiwi businesses.

"Our study has shown there is an appetite to change and some are already acting on the need for digital transformation however as an industry we need to continue to demonstrate and overcome perceived barriers to make this transformation into a reality.