22 SEPTEMBER 2016– Telstra today released a global research report showing that while major companies are looking to embrace digital disruption, legacy IT systems and rigid infrastructure are major barriers to digitisation and transformation projects that need to be overcome.
The report, titled: Disruption, digital transformation and effective technology strategy, looks at technology’s disruptive impact on key markets and industry verticals, and what businesses are doing to digitally transform themselves and compete with new market entrants and business models.
The research found that while 73 per cent of companies surveyed are exposed to digital disruption today and 61 per cent are trying to disrupt new or current markets themselves, inflexible technology and network platforms are major barriers to digitisation strategies. Specifically, business leaders called out that the length of time taken for IT projects and the reliance on IT intermediaries as contributing to their frustration.
According to Jim Clarke, Telstra’s Director of International Marketing, Products and Pricing, adopting new technology is clearly important for businesses to succeed in increasingly competitive markets. But to unlock real value it needs to be concentrated on transformational business growth and innovation, not just narrow issues of process improvement and functionality within the bounds imposed by legacy systems.
Tim Dillon, Founder and Director of Tech Research Asia (TRA) and author of the report said: “The research data suggests that organisations need to retune their networking and technology strategies. Less than 20 per cent state that their IT organisation totally supports their business goals, and yet these same business goals are tightly intertwined with digital and business transformation strategies. As disruption and competitive activity intensify, it is imperative that companies have the right foundations in place to support their future success.”
With nearly three quarters of respondents saying their organisation is exposed to digital disruption, it is encouraging to see that 97 per cent of organisations already have a formal strategy, led by the CIO and actively supported by the CEO, in place to manage disruption.
The study found that the top three business transformation goals of organisations include:
- Improving customer experience – through digital including engagement, satisfaction, multi-channel approaches and lifetime value.
- Streamlining operations – encompassing business process and technology optimisation.
- Moving commodity technology infrastructure to a managed environment – to allow IT to concentrate on business growth and innovation.
“The message to businesses is that disruption is happening, regardless of what industry you are in. Smart investments can be made that will realise greater efficiencies in the long run. It’s up to them to decide if they will continue to be disrupted or use the tools available to be disruptive forces themselves,” said Clarke.
“Legacy infrastructure continues to be one of the biggest barriers to change and businesses realising the benefits of digital transformation. While it often requires significant investment in new infrastructure to overcome, it cannot be ignored. Digitisation is one of the most effective ways of improving operations, increasing speed to market, focusing on customer-centricity and realising efficiencies.”
Disruption across borders
More than half (56 per cent) of all respondents believe their organisation will be exposed to a more competitive market in two years. But it was Hong Kong and Australian firms who considered themselves as the most exposed to disruption, while the Philippines considered themselves the least exposed, although firms here expected it to have the greatest impact in the future.
Companies in India are the most wary of growth of future competition and disruption, with 75 per cent believing they will be more exposed in the future, while firms in Japan sat at the other end of the spectrum, with 38 per cent expecting an increase over the same period. Singapore, the Philippines and India were the leaders when it came to the prevalence of their digital transformation strategy.
The network is king
The research also looks in detail at the effectiveness of technology use, the impact of network performance and the new wave of ‘as a service’ consumption models in supporting an organisation’s ability to execute its disruptive strategy.
Dynamic networks came out on top as a key solution to help enable the execution of business transformation strategies, strengthen competitive position, support growth initiatives and create stronger customer engagement.
“While the adoption of cloud-based ‘as a service’ technology has brought huge benefits to many operations such as scalable infrastructure and better utilisation companies still need the flexibility and underlying connectivity necessary to maintain or enhance a competitive advantage in the marketplace,” said Mr Clarke.
“If an organisation’s network underperforms or lacks flexibility, then it jeopardises multiple areas of operation for the modern company. As such, there is tremendous benefit to be gained by combining the latest technologies with a highly reliable and dynamic network.”
About the research
The report was written by independent technology analyst and consulting firm, Tech Research Asia, based on survey data gathered by Vanson Bourne. It surveyed a total of 1,040 IT and business decision makers across eight countries including the United States, United Kingdom, India, Singapore, Australia, Hong Kong, Japan and the Philippines.