Companies have long seen new technologies as a competitive advantage – and a way of attracting and keeping talent – but new research suggests that after four years of heavy IT investment, Australian and New Zealand companies need to find new ways to stand out, now that modern technologies have become “the minimum cost of doing business”.
Fully 88 per cent of ANZ companies had modernised the way they build applications by using APIs and microservices, according to the Infosys Digital Radar 2022, which found them to be the most widely-adopted of 19 technologies embraced by companies reinventing themselves for the new normal.
Most companies also invested heavily in Internet of Things (IoT) (implemented in 80 per cent of firms), augmented and virtual reality (78 per cent), cloud technologies (77 per cent), and enterprise applications (77 per cent).
That was a big change from the 2018 survey, when around a third of respondents said they still hadn‘t started embracing DevOps and Agile development, enterprise service management (ESM), legacy modernisation, data and analytics, cloud or IoT.
By 2021, almost none of the 2,700 C-level and senior executives from eight countries had invested in these areas.
Once seen as a way of breaking through a ‘digital ceiling’, those technologies had defined a new ‘digital floor’ – table stakes for any company hoping to be relevant in today’s digitally-enabled, customer-focused business environment.
“The technologies more readily adopted in Australia and New Zealand are those that promote enterprise agility via the rapid deployment of apps and microservices, as well as those that enrich customer experience to the greatest degree,” noted Andrew Groth, executive vice president and ANZ region head with Infosys.
“This new concept of the digital floor…. means that it’s no longer considered innovative or industry leading for companies to invest in digital. It’s now a prerequisite – and locally, investment in 5G, DevOps and Agile, and ESM are the minimum cost of doing business.”
Consistent with reports that digital transformation accelerated during the pandemic, Infosys also found many companies started implementing technologies like automation, cloud, and AR/VR between 2019 and 2021.
Significantly, AI investment appeared to have stalled during the pandemic – with 18 per cent of respondents saying they had yet to start AI implementations in 2019 and this proportion moving only marginally, to 16.4 per cent, last year.
Companies piled onto the AI bandwagon between 2018 and 2019, but the new numbers suggest many were forced to hit the pause button as two pandemic years forced them to divert resources to operational issues such as ESM.
Whereas 15 per cent of companies hadn’t started implementing ESM in 2019, by 2021 every company had done so.
ESG as a differentiator
When three-quarters of companies have implemented a particular technology, just buying that technology is no longer a strategic differentiator.
Differentiation, Infosys argues, will come more from the potential business value of human-focused investments in areas such as environmental, social, and governance (ESG).
Companies with strong ESG commitments were also the most effective users of technologies, Infosys found, estimating that improving the effectiveness of the average transformation could unlock $494b ($US357b) in incremental profits.
To realise these benefits, companies should focus on people-centric experience goals like better customer engagement, data-driven business culture, and increasing employee engagement.
They should also train and motivate employees to work in an agile way with “small behavioural nudges” that improve project delivery, Infosys recommended while also encouraging companies to build intellectually diverse, purpose-driven culture and evaluate business initiatives against ESG targets.
“The most successful businesses are no longer early digital adopters, nor those that invested the most in AI, blockchain, and IoT,” said Jeff Kavanaugh, vice president and global head of the Infosys Knowledge Institute.
“The most successful firms now see value in the relationship between digital technologies and the people they serve – and the companies best prepared to enter the post-pandemic era have already realised that technology itself isn’t a differentiator, but a commitment to people and purpose.”