Is Australia falling behind in the global digital race? Recent data from Accenture’s Australian branch suggests that a significant number of local companies are struggling to keep up with the rapid pace of digital adoption and transformation worldwide.
In a study conducted by the consulting firm, it was revealed that 40% of Australian companies rank in the bottom quartile globally in terms of their digital maturity level compared to their counterparts in North America, Europe, and Asia.
Matt Coates, the technology lead at Accenture Australia and New Zealand, emphasized the importance of investing in strategic innovation rather than just maintaining existing systems to stay competitive in the digital landscape. Accenture also recommends dedicating 15% of IT budgets to debt remediation to effectively manage technical debt.
The concept of a “digital core” was used to evaluate digital maturity, encompassing cloud infrastructure, digital platforms, data architecture, and security elements crucial for driving innovation and growth within an organization.
Australian companies falling behind globally
The Reinventing with a Digital Core report by Accenture highlighted that 40% of the Australian organizations surveyed are placed in the “global bottom” quartile, indicating a concerning trend of businesses failing to meet international standards in digital maturity. However, on a positive note, 24% of local organizations were found in the global top 25%, showcasing some level of competitiveness.
Coates acknowledged the wide disparity in digital capabilities across Australian companies, with leading organizations keeping pace with global standards while others lag significantly behind.
Growth and profitability opportunities
The research suggests that companies with advanced digital cores experience significantly higher revenue growth rates and profitability, indicating the potential benefits of digital transformation. By investing in innovation and addressing technical debt, organizations can boost revenue growth rates by 60% and profits by 40%, according to Accenture.
Challenges hindering progress
Short-term mindset
Accenture identified a prevailing short-term mindset among business leaders who view digital transformation as a cost rather than a growth enabler, leading to insufficient technology investments.
Managing technical debt
Many organizations struggle to balance investments between debt remediation and future growth initiatives, hindering their ability to innovate effectively.
Cultural resistance to change
Internal cultural resistance can impede digital progress even with strong advocacy from technology leaders, highlighting the need for a shift in organizational mindset.
Strategies for enhancing digital core maturity
Educate stakeholders
Accenture recommends educating all stakeholders on the benefits of a robust digital core and emphasizing its importance across the entire organization, not just within the IT department.
Allocate budget for innovation
Companies should allocate more IT budget towards strategic innovation while also addressing technical debt to maintain a balance between current operations and future growth.
Promote a culture of digital supremacy
A cultural shift towards continuous innovation, digital skill development, and a change-embracing environment is essential for closing the digital gap and competing effectively on a global scale.