How do we step into digital transformation and promised return?
26% of New Zealand CEOs are confident that existing leadership is fully equipped to oversee digital transformation.
The KPMG CEO Survey shows that something has changed for CEOs in New Zealand around Digital Transformation. And it’s a step backwards.
Compared to their global cohort, and their own responses from a year ago, New Zealand leaders have lost confidence in their organisations to deliver digital transformation.
If transformation is focused on enhancing customer experience, developing new products and services or re-inventing internal processes, the survey data tells a concerning story for New Zealand organisations.
In the 2017 CEO Survey, 88% of New Zealand CEOs were confident they were disrupting their sector rather than waiting to be disrupted. In 2018 that has dropped to 28% - major change in sentiment.
A little more than half of New Zealand CEOs (58%) are “personally prepared to lead their organisation through a radical transformation of its operating model to maintain competiveness” compared to a global metric of 71%.
Perhaps more concerning is that only 26% of New Zealand CEOs are “confident that existing leadership is fully equipped to oversee the transformation” compared to a global response of 44%.
Yet, the data suggests that New Zealand CEOs understand the challenge, with nearly all (98%) positively viewing digital transformation as an opportunity rather than a threat. However the majority (64%) acknowledge that their organisation is struggling to keep pace with technology innovation (global response 36%).
So where to from here? We believe that New Zealand organisations can reap significant rewards from taking a digital approach, and need solutions that are appropriate to the market. To achieve this the survey reveals both a change we need to make to our perceptions of transformation and also how we can navigate a path forward.
First, nearly all New Zealand respondents (96%) saw lead times as overwhelming (global 65%). Secondly, there is a clear view (held by 76%) that “Board has an unreasonable expectation of ROI on digital transformation”.
These indicate that digital programmes are being contemplated as large scale, with matching high investment, longer lead times, and higher execution risks. Clearly, when presented with these business cases, Boards are seeking significant returns.
The business returns exist. We suggest that most organisations will reduce cost by using robotic process automation to replace simple repetitive data entry tasks. Others will increase revenue by using customer analytics to deliver appropriate offers. The secret to success is to start with a small investment and clear scope to deliver the first ‘wins’.