Overcoming the challenges boards face with digital transformation

THE RECENT global shift in how organisations operate and manage day-to-day processes has put digital transformation at the top of many executives’ agendas – but how do business leaders make the transition?

It’s essential for businesses to keep up with an accelerated pace of change to stay competitive. This includes improving the customer and employee experience and prioritising innovation.

Consequently, boards are re-evaluating the transformation journey and looking to embrace a more digital mindset. This means moving beyond simply digitalising existing processes and doing things differently on a fundamental level. 

However, this creates key challenges for boards, which will need to be overcome for transformation projects to be successful, according to RSM Australia.

Andrew Sykes, national leader for technology at RSM Australia, said, “The digital transformation plans that looked exciting and effective 18 months ago are no longer on the agenda for organisations. 

“Instead, organisations of all sizes are looking more closely at how they can leverage people and processes, as well as technology, to achieve organisational goals.”

RSM Australia has identified five key challenges boards may face when embracing digital transformation:

1. Board members may not be technology experts

It is important for board members to get the right information regarding digital transformation so they can offer guidance and directives to ensure the transformation delivers value. This means getting advice from the right people, which can include various stakeholders within the business as well as younger members of the team that may be highly technologically capable.

Mr Sykes said, “While the chief technology officer or chief information officer is undoubtedly best-placed to lead transformation efforts, their voice is by no means the only one that should be heard when mapping out the journey.

“It’s important to get input from experts across the business that can provide insights into how transformation can resolve a range of business challenges. Line-of-business leaders, for example, have invaluable insights that can drive transformation efforts to become more successful, faster.

“And, while more experienced members of the board are usually the ones to guide organisational strategy, when it comes to new and emerging technology, younger staff members can often provide exceptional value. Decision-makers should consider leveraging the knowledge and experience that younger team members may be able to provide; after all, they represent the future of both the company and the market in which it operates.”

2. Technology may not have been a focus for the organisation in the past

In many organisations, technology evolves as an afterthought or as a piecemeal approach to specific challenges. For digital transformation to succeed, it’s important to shift board members’ mindsets towards making technology an integral part of every business activity and decision. It may be advisable to form a technology or transformation committee to account for all the various moving parts that are inherent in a digital transformation.

Andrew Sykes said, “Boards should ensure that technology is a deliberate and considered part of the business strategy. Allocating transformation efforts to the audit committee or the governance committee, as is often the case, can introduce blind spots that compromise the transformation’s success. A separate committee can overcome this challenge.”

3. Boards may not be prepared for the pace of change

While many organisational change projects can take months and years, boards should be prepared for fast-changing digital transformation projects. This means it’s essential to keep on top of the project’s short- and long-term goals and ask executives to demonstrate how current activities align to those goals.

Andrew Sykes said, “Boards should expect the transformation journey to move quickly and be prepared to ask lots of questions about how transformation activities will provide benefits, including the anticipated time to value. This can help keep projects on track.”

4. Transformation projects may stall or be derailed without board support

It’s essential for the board to provide strong leadership around transformation to ensure it delivers on its promise for the business. As with any initiative, the success of digital transformation will depend on buy-in and vocal support from the top down, and this starts with the board.

Andrew Sykes said, “If the board makes it clear that a successful digital transformation is a key priority, this will help managers allocate time and resources to transformation initiatives. This may require a cultural shift, which can be tough for boards that aren’t used to failures. However, failing fast and moving forward is an important feature of successful transformations, so the board will need to reinforce this type of culture.”

5. Talent is hard to find

Board members tend to view a lack of talent as one of the biggest barriers to digital transformation. In fact, people are one of the most important factors in the success or failure of digital transformation projects. Boards can help to overcome this challenge by formulating individual development plans for critical employees.

Mr Sykes said, “Making sure strong internal staff members have the training they need to maximise the value of transformational technology is crucial to the success of transformation initiatives. Too often, organisations put training last on the list; instead, it should be near the top. Great training and development programs can significantly impact the success of digital transformations.

“Digital transformation has rapidly become one of the most important priorities for board members. As the economic landscape and operating environment continue to evolve, businesses are increasingly relying on successful digital transformation projects to keep them agile, responsive, flexible, and competitive. Boards must play their role in this by embracing digital transformation and acting decisively to support and promote transformation initiatives.”

https://www.rsm.global/australia/

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AIIA warns Australia won't become a leading digital economy by 2030 without a 'full-scale national strategy'

AUSTRLIA'S PEAK BODY for the innovation technology sector, the Australian Information Industry Association (AIIA), has released a white paper, Growing Globally Competitive Industries: Powered by Australia’s innovation technology, which challenges the country’s most influential decision makers to seize the opportunity for significant economic growth.

The report outlines how Australia has the opportunity to be well positioned for its priority industries to become globally competitive exporters by leveraging the innovation assets that the technology industry has to offer.

Through almost 80 detailed recommendations, the AIIA is urging the Federal Government to accelerate the digitisation of Australian industry or run the real risk of going from producers to consumers in some of Australia's key industry sectors. 

Failing to do so, the AIIA  said, would also result in Australia not meeting The Prime Minister’s 2030 targets to become a leading digital economy.

The AIIA said Australia must invest in its core and strategic industries to remain competitive. Within the report, AIIA highlights the key industries requiring an innovation technology makeover: 

Health: The World Index of Healthcare Innovation still ranks Australia as 26th out of 31 countries. This is clearly visible in the rollout of the COVID-19 vaccine in Australia.

Manufacturing: Australia is failing to harness the power of the fifth industrial revolution as clearly seen in the Federal Government’s Modern Manufacturing Strategy (MMS) as it is currently lacking representation.

Agriculture: Agriculture technology (AgTech) is set to become Australia’s next $100 billion industry by 2030, yet only low-level investment in this area is reflected in the 2021- 2022 Federal Budget and is almost completely missing from the Agriculture Strategy 2030.

Digital government: 22 percent of Australians say they need to go to more than one source to get the information they need from the Australian Government, and currently there are 64 million pages of content across gov.au across all levels.

● Australia is well behind globally on developing a more than $300 billion artificial intelligence (AI) industry by not investing in commercialisation of its burgeoning startup community.

Additionally, the AIIA has delved into critical cross-industry ‘horizontals’, which are booming globally including, Quantum, digital engineering, industry incentives and cyber security. AIIA is calling for leadership in each of these areas and said it was "a poor indictment that Australia does not have a national Quantum strategy".

AIIA CEO, Mr Ron Gauci said, “Australia’s ability to innovate and support innovation of digital technologies will determine our economic future. If we are to remain a nation of producers and not simply consumers, now is the time to act and support our innovative technologies.

"The traditional strengths of Australia -- our agricultural, manufacturing, and health -- need to be supported by strong government measures to stand up against international counterparts. We can become a strong economy or suffer the longer term consequences of not keeping pace with the advancements being made globally by economies that were once smaller than ours," Mr Gauci said.

“There is a lack of strategy, policy and leadership to propel Australia's ICT sector forward, resulting in the country being a laggard. We need uniform standards that will support industry and foster innovation.

“The importance of retaining our IP and skills within the country can’t be overstated. The Federal Government's adoption of the patent box is an example of a good policy that will benefit Australia, now we have an opportunity to expand the patent box to all sectors of strategic importance,” Mr Gauci said..

This white paper follows 2020's white paper, Building Australia’s Digital Future in a Post-COVID World, which was produced just months into the pandemic because the AIIA saw a drastic need for governments to respond to the societal and economic challenges facing Australia. Since releasing that paper, governments have adopted a range of recommendations including:

● Recognising that digitising the economy is critical to national success;

● Increasing the R&D tax incentive and introducing a patent box;

● Appointing a Minister for the Digital Economy';

● Funding a National Freight Hub;

● Investment in digital skills;

● Investing in cyber security resilience.

Mr Gauci said the AIIA is a not-for-profit organisation aimed at fuelling Australia’s future social and economic prosperity through technology innovation and remains committed to working with all levels of government to secure Australia’s digital future.

To view the full set of recommendations by industry, visit AIIA White Paper - Growing Globally Competitive Industries.

www.aiia.com.au

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Focus on better use of technology a proven winner for businesses of all sizes - CPA research

TECHNOLOGY use is a major determinant of business success and is set to become more influential, according to an in-depth global survey by one of the world’s largest professional accounting bodies, CPA Australia.

“High growth businesses spend more time and resources on technology,” CPA Australia senior manager for business policy Gavan Ord said.

"Their choice of technology puts them even further ahead of their competitors. Our survey results suggest other businesses may improve their growth prospects by investing in the technologies used by high growth businesses.” 

CPA Australia surveyed 725 professionals in different industries in Australia, Mainland China, Hong Kong, Macau, Malaysia and Singapore. Respondents were asked about their businesses’ past and expected technology use and past and expected financial performance.

“COVID-19 accelerated technology adoption by businesses, but not all businesses were equally placed when the pandemic hit," Mr Ord said.

“High growth businesses had already embraced technology enthusiastically. This helped them manage the disruption caused by COVID-19.” 

High-growth businesses lead through tech

In 2020, high growth businesses were significantly more likely to develop a long-term technology strategy, work with technology companies and increase their recruitment of technology staff than businesses whose growth was stagnant or shranK, the research showed.

“High growth businesses have been focusing on technologies that deliver greater value to customers, such as data analytics and visualisation software, business intelligence software and artificial intelligence,” Mr Ord said.

Differences in future technology plans also set higher and lower growth businesses apart.

High growth businesses are much more likely to expect to increase their use of or investment in data analytics and visualisation software, business intelligence software, customer relationship management software and artificial intelligence than their lower growing counterparts.

The top technologies Australian businesses are most likely to increase investment in over the next 12 months are cloud technology and data analytics along with visualisation software. High growth businesses in Australia are also planning to invest in business intelligence software, CPA research revealed.

Key drivers and main challenges identified

The key drivers of technology adoption by Australian businesses are improving operational efficiency and the customer experience, while the main challenges are financial constraints and complex legacy systems.

“If you want to do well in business, look at what others are doing well," Mr Ord said. "The clear lesson from our survey is that technology adoption, and making the right choices, leads to better business performance.”

Over the next 12 months, large businesses -- taken as more than 1000 employees -- are planning to use or invest in data analytics and visualisation software, cloud technology, robotic process automation and artificial intelligence. 

Small businesses -- less than 50 employees -- are more likely to focus on cloud technology, video conferencing and group collaboration tools, and data analytics and visualisation software.

“When it comes to technology adoption, it’s not a level playing field, and many small businesses struggle," Mr Ord said. "We support government programs to build small businesses’ digital capability. It’s a great way for governments to future proof the economy.”

CPA Australia’s Business Technology Report 2021.

cpaaustralia.com.au

 

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How to manage ongoing pandemic disruption with integrated business networks

By Chris Willcocks >>

MORE THAN ANY singular event in modern history, the coronavirus pandemic has brought to light the vulnerabilities supply chains are prone to.

To strengthen the links connecting global commerce, businesses need to broaden visibility across not only their own operations but those of their trading partners to meet the common goal of reducing risk and instilling resilience.

To achieve this level of transparency, businesses are turning to digital networks to capture the widest possible view of their buyers, suppliers and partners. Meanwhile, these digital business networks – previously discrete according to function – are beginning to converge through cloud-based technologies, unlocking value in the process. 

As these technologies take hold, digital applications have given rise to unified, collaborative, intelligent business networks of buyers and suppliers. These networks set business-to-business commerce in motion, extending visibility across both organisational and geographic boundaries.

The widespread disruption associated with COVID-19 is only the latest reminder of the acute need for visibility across supply chains. Yet even that level of transparency can prove insufficient in times of uncertainty. Visibility via multiple networks goes a long way.

THE AUSTRALIAN PAPER CASE

Take Australian Paper, a manufacturer of pulp, paper, envelopes, and stationery, as an example. The business needed a source-to-contract solution to manage contracts and provide increased visibility on sourcing spend.

In less than six months after implementing SAP Ariba solutions, Australian Paper averaged 18 percent savings on sourcing projects and increased efficiency by reducing sourcing cycle times from more than 15 hours to less than five.

It isn’t just businesses however, public sector organisations including the Australian Taxation Office (ATO) are also reaping the benefits of greater visibility into spend and supplier performance by using SAP Fieldglass solutions.

By standardising and automating its contractor engagement processes, staff now have access to real-time analytics on its contingent labour workforce, improved cost-savings and stronger industry engagement and supplier relationships.

THE THREE Cs

Cloud-based networks bring cohesion, clarity and connectedness – the Three Cs – to otherwise separate sets of information that businesses rely on to maintain continuity, manage risk and maximise competitive advantage.

That advantage rests on data: its quality, breadth and timeliness.

By consolidating all the operational points, businesses can unlock newfound efficiencies from collaborative product development, shared data and workflows, flexible workforce management solutions, real-time communication across organisational and geographic boundaries, efforts toward achieving common environmental and social objectives, and network-wide intelligence to ultimately guide decision-making.

THE FUTURE OF NETWORKS

The goal of a ‘network of networks’ – long a dream in the enterprise software business – is rapidly becoming a reality.

In fact, business networks stand poised to become a category of their own, driving differentiation not only in the technology sector but across industries.

As businesses differentiate themselves in the marketplace, they’ll increasingly need to share data with buyers, suppliers and other trusted partners on whom they rely to create mutual value.

To set themselves apart in the marketplace, they must simultaneously embrace transparency and collaboration with trading partners.

Therein lies the irony, but also the immense promise, held by cloud-based networks to propel businesses forward, even in anxious times.

FUTURE PROOFING FOR THE NEXT BIG DISRUPTION

Someday, hopefully soon, quarantines and lockdowns will fade into a distant memory. Yet even as illness recedes and businesses take steps toward recovery, the next disruption is never far behind.

Though it rarely grips the world all at once, as has COVID-19, it can be just as unpredictable, from trade wars and natural disasters to public health emergencies and even armed conflict.

Any of these events can throw off global supply chains, resulting in shortages or stockouts for customers in need, as we saw in March of last year with the empty shelf phenomenon facing most grocery stores across Australia’s major cities.

For businesses, operational resilience involves taking all such contingencies into account. It requires connecting an organisation’s critical partners through unified networks and breaking down siloed systems to widen visibility and invite collaboration.

By connecting all trading partners via digital business networks, all participants benefit from enhanced intelligence, greater efficiencies and improved resilience.

Business networks also overcome the challenges associated with disconnected, enterprise-centric systems and fragmented operational processes, driving scalability and speed throughout global supply chains.

www.sap.com/australia

 

Chris Willcocks is vice president and head of Intelligent Spend Management for SAP Australia and New Zealand.

 

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Nexon says latest cyber attacks should 'wake up' Australian business leaders to risk

NEXON is calling for greater cyber security investment across Australia businesses, calling the recent cyber-attacks across Australian hospitals and aged care facilities “a wake-up call”.

Australian businesses have never been at a higher risk of having their operations disrupted and data stolen by criminals or ‘state-sponsored actors’ according to Nexon.

Nexon Asia Pacific (Nexon) network and security practice lead, Garth Sperring said the threats to Australia’s businesses are on the rise, yet most don’t have a cyber security strategy or resilience to recover quickly from a cyber-attack.

This has left businesses extremely vulnerable. 

According to the Australian Cyber Security Centre (ACSC), between July 1, 2019 and June 30, 2020, the ACSC responded to 2,266 cyber security incidents and received 59,806 cyber-crime reports.

While fraud is the most common category, the ACSC has acknowledged that ransomware attacks on both large and small businesses remain the highest threat.

“Cyber-attacks and security breaches are no longer only targeting big businesses and government departments or utilities – every business is fair game,” Mr Sperring said.

Businesses that do have dedicated IT security teams are most at risk of being exploited or held to ransom, according to Mr Sperring.

This was following recent comments by Assistant Minister for Defence Andrew Hastie who said, “We need to start thinking about cyber as a battlefield”.

Mr Sperring said, “Australian businesses are more aware now of their vulnerabilities and they're looking to protect themselves, but the truth is most are not doing enough when it comes to protecting themselves from the growing number of threats and intrusions.

“A strong cyber security strategy is essential, and the building blocks for this are planning ahead and having a response plan in place should the worst happen. It’s encouraging to see that large healthcare providers have the necessary plans in place to engage external technical and forensic advisors as soon as they became aware of the incident.”

Businesses have been advised to review their existing policies and processes for when something happens, as well as knowing who their response team is in the event of a breach and how to contact them can help mitigate these threats and ensure business continuity.

Nexon has invested in the people, processes and technology to help organisations successful combat cyber actors by deploying pre-empt, prevent, detect and respond measures, Mr Sperring said.

Nexon has seen a large increase in the number of  clients leveraging their cyber security training, including phishing and awareness training, highlighting an organisational shift in focus to pre-emptive measures compared to previous years.

“Most businesses rely on an IT service provider for backups, endpoint protection, cloud security, network security, detection and response and troubleshooting when anything goes wrong,” Mr Sperring said.

“Some businesses don’t have the budget for in-house security specialist and aren’t able to provide a comprehensive security monitoring solution. In many cases they would not even know if they were hacked or have the security experience to deal with the situation if the worst happens.”

He said all businesses should have a cyber insurance policy, as part of an overall risk management strategy, to help recover from any cyber-attacks.

Closing vulnerabilities and identifying the specific security controls required to protect against known attack methods is a great starting point – security is a continuous process and cannot be solved in a once off project.

“Businesses need to remain eternally vigilant to detect and prevent threats, reduce vulnerabilities and maintain visibility and control of their operational environment and data,” Mr Sperring said.

www.nexon.com.au

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Hybrid cloud really helps financial sector capitalise on Open Banking

By Lee Thompson >>

WHILE THE PANDEMIC has had a profound impact on Australia’s banking and financial services sector, with firms accelerating digitisation strategies to retain and engage customers in lockdown, the most transformative development flew comparatively under the radar.

Open Banking – also known as the Consumer Data Right (CDR) – was officially launched in July last year and is poised to disrupt the industry well beyond the impacts of the pandemic. CDR is designed to give Australian consumers far more control over their data and how it is used, while also unlocking immense innovation potential in the financial services industry (FSI).

Australia’s Open Banking regime took a large step forward when customers of the big four banks were given the ability to share data from selected accounts with accredited data recipients. These could include comparison sites, budgeting apps, or competing financial institutions and fintechs.

Not only can this transaction data be analysed to gain a better understanding of the customer journey, hyper-personalised offers and rates can be tailored to each customer’s specific circumstances, while myriad other use cases are being developed to take the pain out of banking and switching banks. 

In July this year, the CDR will take another important leap when transaction data from Australia’s non-major deposit-taking institutions will also be shareable using the government’s automated, API-driven (application programming interface) data sharing framework.

Though historically slow to embrace new technologies, the sector has been at the forefront of digital transformation as it sought to adapt to the impacts of the pandemic. The continuing rollout of the CDR will supercharge these efforts as financial services players seek ways to rapidly innovate, develop new digital products, and draw insight from the consumer data shared with them through the Open Banking framework.

In order to achieve these goals, many FSI firms will turn to hybrid cloud to drive innovation at the pace – and with the security – required.

Hybrid cloud – innovation’s engine room

Hybrid cloud adoption is growing across all industries but the regulatory and security requirements specific to financial services make it especially attractive in this environment: while the public cloud offers flexibility and agility, the private cloud offers high levels of control and security.

This is particularly true in the era of Open Banking as privacy concerns around personal data  leads to a desire to keep systems of record ‘close to home’ in a private cloud, while the agility and elasticity of public cloud is used to power the systems of engagement and insight.

Hybrid cloud offers the best of both worlds as it enables the frictionless interplay between these two environments.

The recent Nutanix Financial Services Enterprise Cloud Index Report found 86 percent of financial services organisations considered hybrid cloud their ideal operating model.

Further, the events of last year led most companies in the sector (78 percent) to view IT more strategically.

As part of this recognition, more than half (54 percent) are increasing investment in hybrid cloud services and many are putting in place a hyper-converged infrastructure (HCI) to make cloud technology easier to implement and scale.

HCI is a critical element in any enterprise hybrid cloud strategy. According to recent IDC research, HCI is the ‘fastest way to enable a hybrid cloud architecture’ as it can seamlessly integrate all cloud and non-cloud data centre infrastructure.

HCI being employed by innovators now

As FSI enterprises gear up for the expansion of the Open Banking regime, it will provide organisations with common data services and API-driven functionality.

This is borne out in the Nutanix research which found that FSI organisations are aggressively deploying HCI, with almost half (49 percent) of respondents having either fully deployed or begun the process of doing so, while another 38 percent expect to begin deploying HCI within the next two years.

The survey participants saw the resulting modern IT infrastructure as a way to accelerate innovation within their organisations.

The most common anticipated benefits FSI organisations reported were gaining more control over IT resource usage (59 percent), increasing the speed (58 percent) and flexibility (55 percent) to meet business requirements.

In one example, Queensland’s RACQ recently deployed HCI and radically simplified and transformed its IT operations.

The benefits include expected savings of $500,000, a platform ready for emerging technologies including AI and robotics, and the ability to develop a common API so workloads can be provisioned on any cloud – public or private – according to each application’s specific needs.

While Australia’s Open Banking regime continues to roll out, many in the FSI sector are upgrading their IT infrastructures in parallel to capitalise on the opportunities it will bring.

This newfound focus on technology points to an appetite for innovation that will extend long into the future and reshape the face of banking as we know it.

www.nutanix.com

Lee Thompson is Nutanix managing director for  Australia and New Zealand.

 

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Reset Australia: better legislation needed for Facebook and Google

By Leon Gettler >>

THE GOVERNMENT watered down its media bargaining code in its desperation to get a deal with Facebook, which will have big impact on small and medium publishers and entrenches the monopoly of Google and Facebook.

So says Matt Nguyen, policy lead at Reset Australia which has been instrumental in its work to get the code up.

“They wanted to push it through as quickly as possible and not have to think about that again,” Mr Nguyen told Talking Business.

“We’re worried about the broader implications of acquiescing to Google and Facebook’s demands so easily, but the proof will be in the pudding in (a few) months when they do a review.”

He said Google and Facebook are two of the most powerful companies in the 21st century and their influence extends far beyond Australia. What was needed, he said, was legislation. 

“Only through legislation, co-ordinated legislation, not just in Australia but in Canada, the UK, the US and the EU, might we be able to dismantle some of their influence and some of the harms that have been engendered by their business model,” Mr Nguyen said.

“So looking specifically at the news code that has just gone through and what a collective bargaining agreement might have looked like, or (how) a pigeon-holed tax might have looked to ensure a robust and sustainable news media sector … That could have worked and might have helped the market failure that is journalism at the moment.

“But from our perspective, a broader view is that it has to be about legislation to rein in the harms of these big tech platforms,” he said.

“Only through legislation, co-ordinated legislation, might we be able to unpack this.”

AUSTRALIANS NOT IMPRESSED

Mr Nguyen said the process had “left a bad taste in a lot of Australians’ mouths”.

He said the ACCC had a whole suite of recommendations, which included funding the ABC, which were not taken and the news media code was seen as a ‘Murdoch prop-up’.

Mr Nguyen said Reset Australia wanted to a pragmatic approach and, just because it might not have been the most optimum solution forward, it didn’t mean it couldn’t be made to work for as many Australians as possible,

“Where it’s ended now is disappointing for us and we think there could have been a suite of measures through this code and looking beyond this code to ensure that journalism is sustainable,” Mr Nguyen said.

“We need to ensure that small and medium journalistic companies are funded properly.”

Mr Nguyen said the eligibility requirement for small publishers to get into the code in the first place should have been decreased and the platforms needed to be more transparent about how they serve journalistic content.

“I guess where we’re most disappointed is that we saw the intention of this legislation to deconstruct the monopolistic dominance of Google and Facebook,” Mr Nguyen said.

“Where it has become watered down to has strayed away from that intention.”

Mr Nguyen said Reset Australia wanted to set up guard rails and regulations similar to what the EU has done around ensuring the digital platforms worked in the public interest.

“It’s about having an undercurrent of a rights based framework over our own data,” he said.

“These companies hoover up data on all of us creating these profiles that they use to actively manipulate us, whether that’s by serving ads or whether that’s by engendering hate speech, or whether that’s by promoting polarisation.”

https://au.reset.tech

www.leongettler.com

Hear the complete interview and catch up with other topical business news on Leon Gettler’s Talking Business podcast, released every Friday at www.acast.com/talkingbusiness

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