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Is digital transformation different in New Zealand?

Is digital transformation different in New Zealand?

The success of digital transformation programmes should be the same in New Zealand as anywhere. Shouldn’t it?

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Mike Clarke

Partner - IT Strategy & Performance Advisory

KPMG in New Zealand

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KPMG New Zealand’s latest CEO Outlook Report shows that New Zealand CEOs are becoming less optimistic about the impact of their transformation programmes. A year ago, 54% of New Zealand CEOs surveyed agreed there were long lead times for achieving significant progress from disruption, and in 2019 that has increased to 96%.

Whatever the geography, digital transformation is about business change; from changes to the operating model, implementing new business processes and deploying the supporting technology.

We have learnt that business transformation can be challenging, as, by definition it means doing things differently. This is often easier said than done. Successful transformation requires significant leadership and change management and New Zealand CEOs agree.

So, what about the returns expected from digital transformation? Our global counterparts have higher expectations for the benefits. 40% of New Zealand CEOs surveyed expect it to take longer than three years to achieve a return on investment (ROI) on their overall digital transformation programme. Only 8% of Global CEOs expect it to take that long.

So, what are the drivers behind these views? Let’s take a look at innovation.

An innovation culture includes elements such as trust, accountability and agility, which embraces a ‘fail fast’ mind-set. The positive is that 58% of New Zealand CEOs agree that they want their employees to feel empowered to innovate without worrying about negative consequences for them if the initiative fails. This compares favourably to Australian CEOs at 40% and is similar to UK CEOs at 57%.

However, that intent may not yet be embedded. This could result in teams working on initiatives that should be stopped or changed. Only 4% of New Zealand CEOs agree that their organisation has a culture in which ‘fast failing’ unsuccessful innovation initiatives is celebrated. This compares to Australia at 40% and UK CEOs at 19%.

Where does digital leadership fit? The data shows that 70% of New Zealand CEOs are personally leading the technology strategy for their organisation, compared to 89% in the United States, 81% in the UK, and 74% in Australia.

So, there is a risk that digital transformation becomes less about business change and more about technology delivery. Are our C-suite executives sufficiently engaged in the leadership of digital transformation programmes?

I have been reflecting on a number of successful transformation projects and while in different industries and with different solutions, they have three things in common:

  • engaged and effective business leadership (referred to above)
  • strong and well-resourced change management work streams to embed the business process changes
  • fully resourced work streams

These organisations took the pragmatic view that transformation was a journey, and getting the first steps right was key. In all cases the technology would be in place for many years, and was designed to deliver strategic change and/or significant ROI. They also resisted the temptation to reduce resources, or to accelerate phases of the project. Their experiences made it clear that, any business case should support a complete and thorough implementation.  

Every programme is different, but the success of digital transformation programmes should be the same in New Zealand as anywhere. Shouldn’t it?

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If you would like to discuss any of these topics in further detail, please don’t hesitate to get in touch. 

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