Digital transformation efforts will add $45 billion to GDP by 2021
- 12 March, 2018 12:19
Australian businesses have rated increased profit margins, productivity improvements and cost reductions as the top three benefits achieved by their current digital transformation initiatives.
Senior execs responding to new IDC research, 'Unlocking the Economic Impact of Digital Transformation in Asia Pacific', commissioned by Microsoft, expected these gains to significantly grow over the next three years, by at least 40 per cent.
As a result, researchers predict digital transformation to add an estimated $45 billion to Australia’s GDP by 2021 and increase its compound growth rate by 0.5 per cent annually.
Other reported benefits from transformation efforts were increased revenue from new products and services and improved customer loyalty and advocacy.
This year will see heavy investment in core technologies such as cloud, mobility and big data according to the survey’s respondents – made up of 100 mid and large-sized organisations in Australia – followed by security, social media and e-commerce. AI and robotics was the most popular (8.9 per cent) emerging technology in line for investment this year, followed by internet-of-things (4.4 per cent) and ‘next generation interfaces’ (2.8 per cent).
“Australia is clearly on the digital transformation fast track. [As well as digital products and services] organisations are increasingly deploying emerging technologies such as artificial intelligence as part of their digital transformation initiatives, which will accelerate growth even further,” said Steven Worrall, managing director, Microsoft Australia.
Many businesses were found to be using “non-standard business” KPIs to measure digital transformation outcomes.
Nearly half (47 per cent) measured process/service effectiveness, 46 per cent measured customer advocacy and 40 per cent employee advocacy.
Asked about the biggest challenges of digital transformation – the most common response given was “lack of skills and resources” followed by “siloed and resilient culture”, “lack of advanced analytics to develop actionable insights” and “lack of thought leadership in driving digital transformation”.
“It’s important to note, transformation is about people as much as it is about technology,” Worrall added. “The top two barriers to digital transformation cited in the study are strongly anchored in an organisation’s ability to empower their people and transform their organisations to take advantage of the opportunity that digital transformation represents.”
The highest ranked answer to the question of digital transformations’ societal benefits was given as “create more higher value jobs in the future for individuals”.
However, although 30 per cent of respondents said they would be retraining or upskilling staff, and 24 per cent said new roles would be created by digital investments, some 29 per cent said jobs would be outsourced automated or made redundant as a result.