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More than half of Australian organisations plan to have a chief digital officer in place within the next two to three years to manage the transition to the “new normal” of digital-first business, a new report claims.
Cognizant’s latest research, Asia Rising: Digital Driving, found 37 per cent of companies across the region are already undergoing digital transformation, with a further 59 per cent planning to embark on the transformation journey within 12 to 24 months.
In Australia, 77 per cent of companies are either already undergoing format digital transformation or kicked off a plan this year to do so, compared to the regional average of 70 per cent. In addition, 60 per cent of Australian respondents believed digital will change their company’s business model fundamentally over the next five years.
For most, digital equates to growth: 63 per cent said digital will help improve new products and services, while 60 per cent saw it as increasing revenue. More than half (58 per cent) also said improving sales, new customers, marketing and customer relations was a top goal for digital transformation.
The report estimated digital transformation will unlock an incremental US$20.1 billion in revenue opportunity for Asia-Pacific companies by 2017. In Australia, companies were found to already experiencing an average 6.7 per cent revenue growth as a direct result of their digital transformation efforts, a figure that’s expected to reach 11.2 per cent by 2017.
To tap into the opportunity as well as overcome the challenges, 60 per of companies surveyed said they planned to appoint a chief digital officer in the next two to three years, including 53 per cent of those in Australia. Core responsibilities expected of the role include planning and managing digital transformation (76 per cent), developing new products and services related to digital transformation (64 per cent), building consensus within the organisation (60 per cent), and connecting digital investments to enterprise business goals (06 per cent).
What was also notable from the report was who’s executing the strategy now in Australia. While 93 per cent of local respondents said CIOs and CTOs are making and executing digital plans, 86 per cent said the CMO is becoming heavily involved in digital strategy, against a regional average of 72 per cent.
Core reasons cited for digital transformation across the region are rising customer expectations (65 per cent), increased competition (57 per cent) and demanding employees (55 per cent). In fact, nearly two-thirds of respondents said the sales/marketing/customer service process will be the most impacted by digital change, followed by new product/service development (60 per cent).
In addition, 64 per cent were concerned about the inability to respond fast enough to changes in the marketplace and new developments, and 63 per cent said a major threat was inability to meet the speed of technological change, as well as gathering, understanding and acting on all customer, product, company and employee data.
Yet despite all these efforts so far, 44 per cent still viewed transformation as an as-needed or adhoc procurement and tactical approach, rather than an implementation of a strategic vision.
The report also found a technology-led approach to transformation is more prominent in Australia, with mobile apps for customers (74 per cent), advanced analytics (73 per cent) and cloud technology (66 per cent) cited as the top digital transformation initiatives planned for the next 12-24 months.
The Cognizant report was based on a survey of 314 senior business and technology decision makers between May and July 2015 across Australia, India, China, New Zealand, Singapore, Malaysia, Indonesia and Hong Kong.
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- Embracing digital transformation in the finance sector
- Behind the scenes of Just Group's digital transformation journey