Australian organisations are not moving fast enough to digitise their operations and now risk falling way behind and potentially going out of business as new disruptive startups hit the local market.
This is the view of Forrester principal analyst Tim Sheedy, who was a keynote speaker and panelist at a recent breakfast hosted by CIO Australia and DocuSign.
“I look at our customers in China and North America and they are all jumping at digital [transformation] with a sense of urgency,” Sheedy told the audience.
“They see it [digitisation] as something that has to happen and they are going to start making their changes quickly. I guess many of them are in industries that are being disrupted more so than our comfortable duopolies down here in Australia. But we have all jumped on this Gartner thing – biomodal – where it’s ok to be slow here but fast over there. As long as we don’t get disrupted over here because we’re not going to get disrupted over there are we?
This is a risky strategy, he said.
“I did some research last year speaking to organisations that had moved to the public cloud – most of them had made pretty large wholesale moves. These are the people who went early, they did it in six months or one year but could have gone much faster. That was their learning.”
“In this move to a digital native platform, it helps them to be fast and innovative, which is what the public cloud is about and I recently heard about an organisation that did a massive transformation in four months.
“I still speak to many organisations that are standing up hybrid cloud infrastructure at the moment and maybe in three or four years’ time will start thinking about public cloud.”
But “your competitors” are already using the public cloud, says Sheedy.
“And when they want a voice service they are going to Amazon Alexa, turning it on this week and making a new service available next week. How are you doing that in your data centre without taking years and spending millions of dollars?” he asked. “How are you changing the customer experience using technology?”
One organisation that has certainly achieved this is US-based startup Lemonade, which has quickly captured 30 per cent of the household insurance market in New York City, said Sheedy. The startup takes a 20 per cent flat fee to insure household items and gives any left over money back to charities.
“When [a provider] like Lemonade comes along, what’s your ability to respond to change like this? Too many Australian businesses are comfortable and haven’t been challenged for too long. We are ok with slow and I think Amazon is about to show a lot of businesses that it’s not cool to be slow.
“You need to be able to respond, you’re dead or dying if you don’t respond. Every industry is going to be hit. Even in mining and construction, I see digitally-enabled organisations in those sectors. For instance, Woodside and what it is doing around artificial intelligence to keep people safe while giving the organisation a competitive advantage.”
Government ‘painfully slow’
Government agencies are ‘painfully slow’ in digitising their services, added DocuSign’s Asia Pacific VP, Brad Newton.
“The motivation [of government] is not a financial one; the motivation is that they know that offering convenient services gets them some brownie points and in the current political environment, anywhere that you can get the upper hand because you have delivered something that benefits the community or is a shining example of how a government partner has done a great thing is incredibly important to public servants right now,” Newton said.
“It’s a reflection of the state of politics in Australia right now that if you can get a win and show convenience or some benefit, then that’s absolutely the motivation.”
Compliance is also a big driver for government, added Forrester’s Sheedy.
“This means making your customers or citizens want to deal with you and making it easier for them to deal with you. Once that happens, your costs go down massively,” he said.
The answer is not about creating more mobile apps, which need to be maintained and link to old processes and systems, he said.
“If you haven’t transformed your old processes and systems, you’ve actually added a cost to your business because you’ve added another touch point for your customer to have to manage particularly if that touch point isn’t driving down the number of calls into the call centre,” he said.
“Certainly with some of the government apps, you get halfway through the digital service and you find that you don’t know what to do next so you call the call centre. You’ve just doubled the cost to the government department of providing that service to you. That’s the issue around not transforming.”