We are now knee-deep in the digital business era, with many enterprises reimagining their business and operating models based on digital capabilities.
That’s according to Andy Rowsell-Jones, research vice president at Gartner, speaking ahead of the Gartner Symposium/ITXpo 2016 in Gold Coast next month.
Rowsell-Jones is looking at how Australian CIOs are adapting to digital transformation and the new skills required to deliver the greatest value to their enterprises.
“If you ask CIOs what percentage of their budget they spend on digital, they will universally say it will go up,” he says.
Rowsell-Jones says there was an initial flurry of interest around digital in Australia, however, boards of directors appear to now be distracted by other business priorities.
“It seems that interest in digital transformation is abating, and if anything, we’re seeing digital fatigue,” he says.
“Like many industry disruptions, the pundits overestimate the impact in the short-term and underestimate the impact in the long-term. Digital transformation is following that pattern.
“This is the most dangerous time as there’s temptation for organisations to just ignore it and go back to what they were doing before. The effects of digital are now just beginning to be felt, so they have to stick with it – it’s a multi-year journey.”
In regards to how Australian organisations are innovating in this digital journey,Rowsell-Jones says most Australian businesses are still in the early experimental phase.
“The larger businesses in Australia are not necessarily behind, but it’s hard to find those that are leading the pack and doing something completely revolutionary with digital,” he says.
“Australia is very innovative where it has scale in sectors such as health, mining and agriculture, yet in other sectors the markets are small, which makes innovation difficult.”
Rowsell-Jones says Australia and its economy are big enough that you can work alongside your competitors and still make a living. In that environment, it’s always more rational to improve the service you have than to be disruptive.
“What digitalisation looked like it was going to do was to disrupt that, but now boards are figuring out that it isn’t and that they can control competition here in Australia,” he says.
"If you can do that, then you will innovate in a much slower way, which is fine until someone comes along and steals your market.
“All you have to do is look at companies such as General Electric (GE) in the U.S. and other larger overseas businesses that see digital as fundamentally transformational,”Rowsell-Jones adds.
"They’ve shifted their business models from focusing on selling product towards becoming information analytics businesses, where cloud-based analytics and productivity enhancing capabilities are creating non-price competition,” he says.
“As a supplier, it’s about seeking non-price competition and differentiating your product and the ecosystems around it. Read more
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