Digital Landscape, Aurecon
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Understanding the current and ever-changing digital landscape

Nine out of 10 organisations have faced some sort of challenge in embracing ‘digital’, highlighting a pressing need for intervention and consultation.

The pace of digital change is unlike anything we’ve witnessed before and understanding the current – and ever changing – landscape is a critical step in planning for the path ahead.

According to Aurecon’s Our Digital Futures survey data, when it comes to the current state of play, ironically, ‘digital’ is exposing a lack of connectivity. Organisations are grappling with the complexities of the digital landscape, many fall short in understanding what ‘digital’ means and are also under pressure to demonstrate financial return on digital investment (ROI).

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Top organisational challenges

(top three, % ranked #1)

Alarm clockOnly 5% have not begun to embrace digital

Warning signOnly 4% are yet to face any challenges

#1
Question and discussion between two people

"Not many of my key decision makers understand what 'going digital' actually means"

29% Decision-makers lack understanding

#2
Growth graph

"Because any anticipated revenue uplift is currently academic. Hence there is uncertainty around profits while focused very strongly on initial costs."

24% Need to show immediate ROI

#3
Money bags

"The financial cost of moving to digital with peta-scale infrastructure is large. There are other priorities to be funded."

24% Cost

“Insights from the depth interviews suggest this is because many organisations are still preparing their internal systems and processes to ‘plug in’ to an increasingly digital business world. Also, many organisations believe that creating efficiencies will help to prolong the life and utility of existing assets, by leveraging technologies such as internet of things and approaches such as predictive maintenance.”

Dr Andrew Maher,
Chief Digital Officer, Aurecon

Narrow definition of digital

The data reveals a majority of organisations are focused ‘internally’ on the present and see analytics and organisational factors – such as changing how businesses operate and creating efficiencies – as the starting point for their digital journey.

When asked what ‘digital’ means for your business:

  • 82% of respondents said ‘Data and analytics’
  • 79% ‘Transforming how we work’
  • 76% ‘Creating efficiency’
  • Just 33% defined digital as ‘Creating new business opportunities’

Definition of digital

Diagram of the Definition of Digital Definition of digital diagram

Creating revenue opportunities

“It is not so much the technologies that are the challenges but it’s the adaptability of the organizations to actually pivot the business model in the face of disruption.”

Dion Chang,
Futurist, South Africa

Interestingly, despite the pressure to show ROI, factors directly relating to revenue streams – such as creating new business opportunities and unlocking new value – are less salient.

Currently, physical assets don’t play a major role in many of our clients’ digital strategies. They don’t see that digitising their assets can better support their overall business objectives and be a competitive advantage. This means those focusing only on digital ways of working to improve organisational efficiencies are missing opportunities to connect assets to business strategy, adapt and repurpose assets, and use it as a source of differentiation. Organisations who create strong business cases and invest in the right digital approaches are likely to be at less risk in terms of demonstrating future ROI.

Analytics might be a starting point for many, but there is so much more potential for business.

‘Digital’ driving core business outcomes

Diagram of ‘Digital’ driving core business outcomes ‘Digital’ driving core business outcomes diagram

Most respondents thought digital was a vehicle to ‘Reposition an organisation’ and ‘Restructure business operations’, whereas ‘Generating new revenue’ was thought to be the least likely outcome

Case studies

A line drawing of a dam
  • Australia’s SA Water faced challenges in identifying when and from which reservoir to transfer water across their treatment plants. With a digital strategy connecting assets, data is now being used to help make better decisions for this complex system, and to more efficiently distribute water across the state and through metropolitan Adelaide. SA Water is also in the process of using digital to regain control over one of their single largest operational expenses, by using solar and advanced analytic and optimisation tools to contribute to its goal of a zero cost energy future.

The importance of owning and understanding digital

29% of respondents believe decision makers’ lack of understanding of digital is their biggest challenge

The survey data revealed some concerning trends relating to understanding ‘digital’ and owning ‘digital’ within organisations – two factors which are critical in effectively preparing organisations to move forward in their digital journey.

Responsible for digital strategy

Responsible for digital strategy diagram

Digital ownership and strategy

The research reveals that although many have begun to embrace digital ways of working, responsibility and digital ownership is disaggregated in a majority of organisations, resulting in focus being only on specific areas such as IT or systems.

Responsible for digital strategy

Responsible for digital strategy diagram

A lack of leadership results in limited focus on new revenue and inward facing strategies, yet where organisations employ a chief digital executive to oversee digital strategy and implementation, the opportunities to connect strategy, performance, revenue and ROI are much clearer.

Andrew Maher and William Ruh talk digital transformation

This video features Aurecon’s Chief Digital Officer Andrew Maher interviewing the Chief Executive Officer of Lendlease Digital, William Ruh about his goals for helping Lendlease’s digital transformation since joining the company earlier this year.

Play video Andrew Maher and William Ruh
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Depth interviews suggest that a lack of ownership within businesses and ‘too many chiefs’ contributes significantly to a murky understanding of what ‘digital’ means, and ultimately reduces digital competency and value gained.

  • “There aren’t off the shelf solutions which you can just pick up and apply to your business. It requires a program of strategic business transformation and a dedicated full-time digital team to manage that transformation.”

    Simon Vaux
    ,
    Director Digital Engineering, Transport For NSW

  • “The biggest challenge is leadership and commitment and openness of the organisation to change HR processes and systems to support the digital aspiration. Sasol’s are now finding that to thrive in the digital world, one needs to develop and build in an ecosystem environment.”

    Natalie Naidoo
    ,
    Chief Digital Officer, Sasol

  • “UWA has an extensive IT team led by the Chief Digital Information Officer, who owns the digital strategy and is responsible for persuading the rest of us that our strategy has the right components that will fundamentally improve our competitiveness and the quality of what we deliver.”

    Simon Biggs
    ,
    Senior Deputy Vice Chancellor, University of Western Australia

  • “Many of us are comfortable in adapting a new technology but we still tend to use the same mindset.”

    Kristin Alford
    ,
    Futurist

  • “We were definitely at risk – we had no clear ownership, and projects were being conducted with isolated teams rather than organisation wide efforts.”

    Anonymous

Building overlaid with blue wash and connected dots

“The definition of ‘digital’ goes back to ‘ones and zeros’, though what we have done with this is re-platform our methods of communicating, storing, transacting from a physical platform into a platform of 1’s and 0’s. Ultimately, we’re seeing the world become more and more connected.”

Pete Williams, Futurist

“As an end to end property solutions provider; we have a vested interest in defining and owning the digital delivery process. It’s the way we maintain accountability for the highest safety and quality outcomes on our projects.”

Richard Kuppusamy, Head of Digital Integration, Asia
Lendlease

Defining and understanding digital

Aurecon’s 2016 research revealed ‘digital’ was used in a variety of ways and had a multitude of different meanings. Our latest research shows that while for many organisations the definition of ‘digital’ has become somewhat clearer in the last few years, this clarity is not necessarily shared deep within businesses, with just 1 in 5 feeling confident that their definition is shared across their organisation.

Understanding 'digital' diagram Diagram of understanding 'digital'

“To understand the meaning and the language of digital equates to digital competency.”

Dr Andrew Maher, Chief Digital Officer, Aurecon

Transport NSW case study

“The transformation opportunity that ‘digital’ brings is about a few different layers: how can you use the medium to inform; gather and disseminate information to create greater understanding, how you can use the medium in interactions and then transactions - and I don’t mean purely a financial transaction, but a transactional event. Then break this opportunity down between your consumer, your employees, your partners, your governance structures etc.”

Jithma Beneragama, Director of Digital, Victorian Department of Premier and Cabinet

Case studies

  • Transport for NSW observed disparate definitions and implementation of ‘digital engineering’, limiting data driven insights and opportunities for data exchange or re-use on transport projects. By leading in the development of the Digital Engineering Framework, they have transformed their business with a focus on managing data and information as an asset, ensuring that it is consistent, reliable and reusable. This long term strategy has the power to provide valuable insights, create efficiencies and enable more collaborative and productive methods of project delivery and asset management.
  • The world has witnessed significant major players fall by the wayside – Kodak, Blockbuster, Nokia to name a few. While these are complex stories of leadership, one commonality they all shared was the inability to work together as an organisation to solve challenges posed by digital disruption. Understanding digital, owning digital and making it meaningful and tangible for an organisation are all critical factors in moving from ‘at risk’ to ‘best in class’.

“We need to identify gaps in the digitisation journey. Understand where clients want to be, what their North Star is that they want to work toward. Then they need to understand how to fill those gaps, either with technology, with different skill sets, or a combination of both.”

Yvonne Lim, Futurist

“You can’t just close yourself off to new ideas and new approaches, but there needs to be some analysis before you dive in head first.”

Jithma Beneragama, Director of Digital, Victorian Department of Premier and Cabinet

Digital unreadiness

While there was clear consensus that digitisation will change organisations considerably – both immediately and increasingly into the future – the majority of respondents feel their organisations are not properly prepared to thrive currently.

When considering what they need to thrive, the issue of where to start was a common theme, yet many believed up-skilling staff and automating systems were potential key areas to address now before they can move forward. Digital unreadiness diagram

Digital unreadiness diagram

Make sense of the now, now!

The message from the first wave of Our Digital Futures is clear: the digital world can be complex and challenging and many organisations aren’t making the most of opportunities to grow revenue, reduce costs and risk, enhance user experience and create efficiencies.

As our clients continue to traverse an increasingly digital landscape, at Aurecon we are committed to ensuring these new insights pave the way for smart digital ways of working which will bring out the best in our clients’ operations and their people and help them thrive in the digital present and future.

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Explore our digital futures

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Our Digital Futures

Our insights lay a strong foundation to tackle challenges and realise the possibilities created by digital.

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The Future of Digital

COMING FEBRUARY 2020

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Your Digital Strategy

COMING JULY 2020

Watch this space for the last wave our research to be released early next year!

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