Digital IQ Survey: Ten years of digital-driven change
Australian PwC Digital Services Leader John Ricco shares his views on how leaders can keep pace with digital.
Are Australian organisations maximising their profit from technology investments?
The world was a simpler place when PwC first set out to measure Digital IQ a decade ago. “Digital” was just another name for “IT” and the CIO was not generally regarded as a strategic leader. Putting new technologies to work was a relatively straightforward and siloed job.
Today, the scope and scale of digital-driven change has grown immensely and organisations are investing time and money to keep up. Despite the investment, our survey suggests that in some ways, leaders are no better equipped to handle the changes coming their way than they were in 2007. Organisations aren’t so much falling behind as struggling to keep up with accelerating standards.
How can you consistently unlock value from digital investments in a rapidly advancing world? The answer is at once simple and infinitely complex: Focus on the human experience. This entails rethinking how you define and deliver digital initiatives, considering employee and customer interactions at every step, investing in a culture of innovation, and more.
Across the globe, business executives are struggling to keep up with the pace of change.
When respondents were asked to rate the digital skills of their leadership, CIOs scored the highest both in Australia and abroad. But Australian executives rate the digital skills of their leadership lower than their global counterparts with companies who do not have CDO stating digital is not a significant part of company strategy (22%, vs. 2% globally). This suggests that the Digital IQ of Australian leadership is lagging because it fails to seriously incorporate digital into the fabric of the business.
Globally, responsibility for setting digital strategy falls to the CEO and CIO (48% and 44% respectively). In Australia, however, 84% say the CEO drives digital strategy and just 10% say that power rests with CIOs.
The human experience is a critical dimension of Digital IQ to be successful in the digital economy. Organisations must create agile cultures that adapt to change, focus on customer and employee experiences and develop the right mix of workforce skills.
Improving the customer experience is a key concern for Australian companies in our survey who strongly believe new technologies will affect human experiences (82%, vs. 69% globally) and are more likely to invest in customer experience initiatives (22% rank it as top investment vs. 11% globally).
Australian executives are also investing to support a digitally savvy workforce (30% rank it as a top-three initiative, vs. 24% globally) and they have greater confidence than their global peers that their employees are equipped with the necessary skills for the digital economy.
When we started measuring Digital IQ in 2007 technologies like social and analytics were still entering the mainstream. Today a fresh wave of powerful technologies, what we call the essential eight, Tech breakthroughs megatrend is emerging to merge physical and digital realms.
Most companies are no better prepared in 2017 to adopt emerging technologies than they were in 2007 but Australian firms are ahead of their peers in some areas: they are more likely to take a systematic approach to evaluating emerging technologies (86%, vs. 75% globally), and 80% say they have a way to measure the value of their efforts, compared with 64% globally.
For now, Australian companies in our survey are focused on investments in IoT (70% are investing heavily today) and artificial intelligence (60%). In three years, however, the internet of things will start to make way for greater investment in robotics (50% say they will invest heavily, vs. just 10% today) and augmented reality (22% in three years, vs. 12% today).
Your leadership should view emerging tech as a core competency of the organisation. Get your C-suite and your board excited by showing demos or encourage hands-on homework to experiment with new technology.
While emerging technology needs broad support, it also needs a single individual who has ownership over your emerging tech initiatives. Identify who are passionate about different technologies and create a team responsible for scouting and experimenting.
As you experiment with emerging technology don’t short-change the customer or employee experience. Make sure you think through issues like whether you’ve created the necessary trust and transparency.
Most organisations don’t look broadly enough to identify how and where emerging technology can make a difference. Look to underutilized sources such as the startup ecosystem for new ideas.
We’ve been conducting Digital IQ research since 2007. The 2017 edition was fielded September through November 2016 and included 2,216 respondents from 53 countries.
Respondents were evenly divided between IT and business leaders. Reflective of the distribution of respondents globally, 62% work in organizations with revenues of $1 billion or greater, and 38% have revenues between $500 million and $1 billion.