New research from PwC has revealed that organisations performing well in relation to using digital technology have ten key attributes.
New Zealand is still behind its international counterparts when it comes to workplace technology – but the country is beginning to catch up, says one industry expert.
PwC’s 2015 Global Digital IQ Survey represents “the most comprehensive comparison of New Zealand’s digital landscape to global best practices to date”.
The survey found that as organisations in New Zealand and across the globe continue to invest heavily in digital technology, leadership teams are under pressure to translate this into visible ROI – and 2015 is a real tipping point.
The report identified ten critical behaviours that led to a higher ‘Digital IQ’, and ultimately better financial performance:
1. Executives are responsible for digital, and are involved in setting high-level business strategy.
2. Business-aligned digital strategy is agreed upon and shared at the C-level.
3. The company actively engages with external sources to gather new ideas for applying emerging technologies.
4. Digital enterprise investments are made primarily for competitive advantage.
5. All captured data is effectively utilised to drive business value.
6. The company has a single, multi-year digital enterprise roadmap that includes business capabilities and processes as well as digital and IT components.
7. The CEO is a champion for digital.
8. Business and digital strategy are well communicated enterprise-wide.
9. The company proactively evaluates and plans for security and privacy risks in digital enterprise projects.
10. The company consistently measures outcomes from its digital technology investments.
PwC’s survey found that companies who responded with the highest scores across these behaviours were 50% more likely to achieve rapid revenue growth and twice as likely to achieve rapid profit growth in comparison to the remaining respondents.
Greg Doone, PwC digital strategy leader, said that virtually all the companies who took part in the survey were investing in digital technology – but the top-performing organisations understood how to best apply the technology so that it became a mindset among its people.
“Increasingly, the leaders are recognising that digital is far more than technology,” he explained.
“It is driving fundamental change in consumer and staff behaviour and this, in turn, has cultural and work practice implications beyond the technology itself.”
Doone added that Kiwi organisations have had a late start compared to global leaders but they are catching up quickly.
“Where it was noticeably absent three years ago, digital strategy has now become an integral part of everyday boardroom discussions,” he said.
“This leadership engagement in digital is another strong factor contributing to growth. It is now very common for a board or an executive team member to mention a recent trip to Silicon Valley or another technology hotspot to expand their digital outlook.
“Overall, there is a renewed focus by New Zealand businesses on digital strategy and those investments are starting to pay dividends. There is a desire and a drive to embrace digital thinking, as well as a recognition that New Zealand companies need to invest more in this thinking to keep up with organisations around the world – and customer expectations here at home.”
CEOs are all in
According to this year’s PwC Annual Global CEO Survey, 86% of chief executives – and 94% in New Zealand – said it was crucial to champion their organisation’s use of digital technologies to get the most out of their investments. The results of the Digital IQ Survey suggest their executives may be agreeing with them.
Globally, 73% of respondents said their CEO is a champion for digital. In New Zealand, executives are aligned with global colleagues in their thinking with 74% of respondents saying their CEO champions digital.
Aggressive investment is occurring
According to the survey, the CEO mandate is influencing significant investment in digital. Nearly one-third of global respondents said their companies are investing more than 15% of revenue into technology investments that span all areas of the business – not just IT.
This is considerably higher than the single-digit spending forecasts that technology analysts typically make. In New Zealand, 34% of organisations said they are investing more than 15% of revenue into technology investments. However, the majority (42%) of Kiwi organisations are spending between 10 and 15% of revenue.
Confidence continues to rise globally
Two-thirds of the survey’s global respondents rated their companies as having a strong Digital IQ, compared to 64% last year. Executives in Asia (64%), Scandinavia (59%), and Western Europe (54%) were less confident. Here in New Zealand, only 54% rated their Digital IQ as ‘strong’.
While technology is often associated with ‘disruption’, PwC’s researchers found that this was generally not the intent for businesses when investing in new technologies. Just 1% of global executives said their biggest expectation for digital was to disrupt their own or other industries, while no respondents in New Zealand said they expected digital investments to enable disruption.
Instead, global respondents were seeking more immediate returns: 45% say the top priority is growing revenue; 25% are expecting better customer experiences; and 12% expect to see an increase in profits.
PwC’s 2015 Global Digital IQ Survey represents “the most comprehensive comparison of New Zealand’s digital landscape to global best practices to date”.
The survey found that as organisations in New Zealand and across the globe continue to invest heavily in digital technology, leadership teams are under pressure to translate this into visible ROI – and 2015 is a real tipping point.
The report identified ten critical behaviours that led to a higher ‘Digital IQ’, and ultimately better financial performance:
1. Executives are responsible for digital, and are involved in setting high-level business strategy.
2. Business-aligned digital strategy is agreed upon and shared at the C-level.
3. The company actively engages with external sources to gather new ideas for applying emerging technologies.
4. Digital enterprise investments are made primarily for competitive advantage.
5. All captured data is effectively utilised to drive business value.
6. The company has a single, multi-year digital enterprise roadmap that includes business capabilities and processes as well as digital and IT components.
7. The CEO is a champion for digital.
8. Business and digital strategy are well communicated enterprise-wide.
9. The company proactively evaluates and plans for security and privacy risks in digital enterprise projects.
10. The company consistently measures outcomes from its digital technology investments.
PwC’s survey found that companies who responded with the highest scores across these behaviours were 50% more likely to achieve rapid revenue growth and twice as likely to achieve rapid profit growth in comparison to the remaining respondents.
Greg Doone, PwC digital strategy leader, said that virtually all the companies who took part in the survey were investing in digital technology – but the top-performing organisations understood how to best apply the technology so that it became a mindset among its people.
“Increasingly, the leaders are recognising that digital is far more than technology,” he explained.
“It is driving fundamental change in consumer and staff behaviour and this, in turn, has cultural and work practice implications beyond the technology itself.”
Doone added that Kiwi organisations have had a late start compared to global leaders but they are catching up quickly.
“Where it was noticeably absent three years ago, digital strategy has now become an integral part of everyday boardroom discussions,” he said.
“This leadership engagement in digital is another strong factor contributing to growth. It is now very common for a board or an executive team member to mention a recent trip to Silicon Valley or another technology hotspot to expand their digital outlook.
“Overall, there is a renewed focus by New Zealand businesses on digital strategy and those investments are starting to pay dividends. There is a desire and a drive to embrace digital thinking, as well as a recognition that New Zealand companies need to invest more in this thinking to keep up with organisations around the world – and customer expectations here at home.”
CEOs are all in
According to this year’s PwC Annual Global CEO Survey, 86% of chief executives – and 94% in New Zealand – said it was crucial to champion their organisation’s use of digital technologies to get the most out of their investments. The results of the Digital IQ Survey suggest their executives may be agreeing with them.
Globally, 73% of respondents said their CEO is a champion for digital. In New Zealand, executives are aligned with global colleagues in their thinking with 74% of respondents saying their CEO champions digital.
Aggressive investment is occurring
According to the survey, the CEO mandate is influencing significant investment in digital. Nearly one-third of global respondents said their companies are investing more than 15% of revenue into technology investments that span all areas of the business – not just IT.
This is considerably higher than the single-digit spending forecasts that technology analysts typically make. In New Zealand, 34% of organisations said they are investing more than 15% of revenue into technology investments. However, the majority (42%) of Kiwi organisations are spending between 10 and 15% of revenue.
Confidence continues to rise globally
Two-thirds of the survey’s global respondents rated their companies as having a strong Digital IQ, compared to 64% last year. Executives in Asia (64%), Scandinavia (59%), and Western Europe (54%) were less confident. Here in New Zealand, only 54% rated their Digital IQ as ‘strong’.
While technology is often associated with ‘disruption’, PwC’s researchers found that this was generally not the intent for businesses when investing in new technologies. Just 1% of global executives said their biggest expectation for digital was to disrupt their own or other industries, while no respondents in New Zealand said they expected digital investments to enable disruption.
Instead, global respondents were seeking more immediate returns: 45% say the top priority is growing revenue; 25% are expecting better customer experiences; and 12% expect to see an increase in profits.