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Fourth Industrial Revolution set to overturn Australian business

4IR set to overturn Australian business

There is a concerning lack of readiness for technological change amongst Australian organisations, with most business leaders unprepared for the Fourth Industrial Revolution (4IR), the convergence of the physical, digital and biological worlds, according to a new report by KPMG Digital Delta.

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  • Large organisations predict a "very high impact" due to new technologies.
  • Less than half of business leaders feel their organisation is strongly prepared for change.
  • Two-thirds of those surveyed aren’t confident their staff have the necessary skills.

The Fourth Industrial Revolution Benchmark Report, produced in collaboration with global analytics platform Faethm, surveyed 198 Australian business leaders, gauging their organisations’ uptake and understanding of technologies such as artificial intelligence (AI), robotic process automation (RPA) and the Internet of Things (IoT). It found that most Australian business leaders lack a deep understanding or experience with the technologies, with 47 percent having "little" knowledge and 9 percent having "never heard of" the concept.

Less than half (46 percent) of Australian business leaders feel their organisation is strongly prepared for technological change. On average, respondents rated the maturity of their organisation’s adoption of Fourth Industrial Revolutions technologies below 3 out of 5 (as siloed and inconsistent in implementation). Cloud services was the only technology to rate highly (3.9 out of 5), indicating it is the gateway 4IR technology for most organisations.

Leaders who do understand the 4IR concept well, however, are more prepared for it. They spend a higher proportion of research and development (R&D) expenditure on these technologies compared to those with a weaker understanding (30 percent vs 20 percent). They also rate their readiness for change much higher (57 percent rate high preparedness vs 36 percent).

"The rapid acceleration in the capabilities, usage and effects of AI, robotics, automation and machine learning represents a fundamental change in the way we live, work, and relate to one another. The lack of readiness among Australian organisations is concerning. Change is already taking place, and it’s critical that business leaders understand these technologies and how to harness them to remain locally and globally competitive," says Piers Hogarth-Scott, Partner at KPMG Digital Delta.

There are many reasons for adoption of 4IR technologies, but customer experience (CX) improvements is the current key driver (selected by 75 percent). CX is seen as the area of greatest impact on businesses (4.3 out of 5), over products and services, innovation, operating model (all 4.1) and workforce (3.9). Increased productivity (67 percent), innovation (64 percent) and process automation (62 percent) are other key drivers of adoption.

Staff readiness is polarised – about one third feel their staff do have the necessary skills to implement new technologies, one third feel they do not have staff with the necessary skills, and one third is unsure. Building necessary staff/skill capability is the top challenge in adopting 4IR technologies (47 percent rate this in the top three).

"While the approach to implementation depends largely on the business model and needs, a business-wide technology strategy is necessary to reach more mature levels of implementation. Regardless of the industry and the position, life-long learning will be a necessary condition for future employment and companies that support strategy-building in this regard can add great value for businesses and employees alike. Without a clear company direction or dedicated resources, employees are unlikely to have a distinct career path to transition into the work of the future through upskilling or reskilling," says Michael Priddis, CEO, Faethm.

For further information

Ash Pritchard
+61 411 020 680
apritchard2@kpmg.com.au
 

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