Digital transformation transforms into … digitally determined

IDC says by 2020 more than half of New Zealand businesses will have become 'digitally determined', having transformed their markets with new business models and developed digitally enhanced products and services.

As a result, the role of chief digital officer will become redundant. IDC says the CDO role will be declining by 2023, as “digital will be fully embedded in organisations and no longer regarded as something special.”

IDC says that 60 percent of NZ organisations do not presently have any digital KPIs but expects 85 percent will have digital KPI sets by 2023, and by the end of 2020 to be allocating capital budget equal to at least 10 percent of revenue to fuel their digital strategies.

A/NZ research director for IDC, Louise Francis, said by the end of 2020 that 55 percent of NZ enterprises would have created data management and monetisation capabilities, enhancing enterprise functions, strengthening their competitiveness, and creating new sources of revenue.

"The other 45 percent will be in trouble if they cannot break free of their digital deadlock. Now, more than ever, speed and flexibility will beat size every time,” she said.

Customer advocacy will be key to success for these digitally determined organisations, and 40 percent of NZ workers will be using bots or some other form of AI, according to Francis.

“We estimate that by the end of 2020, more than 60 percent of New Zealand business-to-consumer organisations will have adopted Net Promoter Score as their leading success metric," she said.

"In the same time period, at least 20 percent of businesses will have created digital twins, which will enable flatter organisations and reduce the number of knowledge workers they need by 33 percent."

She said there had been some misinformed comment about AI coming to ‘steal all the jobs.’

"In reality, many roles will be augmented and extended with smart bots or some form of AI. This trend will require company leaders to redesign operational processes, performance metrics, and recruitment strategies.”

IDC is also tipping blockchain to gather momentum in New Zealand enterprises.

"By 2022, prominent in-industry value chains, enabled by blockchains, will have extended their digital platforms to their entire omni-experience ecosystems, thus reducing transaction costs by 35 percent," it says.

"By 2022, approximately 25 percent of large manufacturers and retailers in NZ will have built digital trust through blockchain services that enable collaborative supply chains and allow consumers to access product histories."