Australia's digital economy is less advanced and behind its global counterparts, according to a study by Ernst & Young in 2014 (State of the Nation Report 2014). Controversially, Australian consumers are very well connected and digital front runners: 65% of Australians own a smartphone, compared to only 56% in the USA and 40% in Germany (measured by Google's Our Mobile Planet).
Although many Australian businesses focus on local, regional or national markets, in an environment where digital perception is influenced globally, Australia, and many other economies, need to focus on digital transformation to compete and survive even in small or oligopolistic markets. With increasing access to digital information, services and products, consumers’ expectations and behaviours towards digital experiences develop based on global trends. To be able to compete and furthermore follow consumer demand of digital experiences, Australian businesses need to increase their efforts to revolutionise the way they operate in an increasingly digital environment. Changed digital environment Initiatives like Facebook’s internet.org, which is intended to provide internet access to the world’s population that live without an internet connection, will accelerate connectivity across local communities and global markets and increase disruption. While this doesn't seem to impact local Australian businesses immediately, it liberalises the access to consumers globally and disrupts commercial behaviours of local consumers short-term. Digital transformation has been a progressing topic within the digital industry as consumer behaviour has changed significantly. Many businesses, however, still try to practice their traditional business approach in a changing digital environment. The fact is, a successful and proven business or product does not perform the same way within a digital environment. Uber, as a recent example, successfully changed consumer travel behaviour and demand, while the taxi industry still applies their traditional business approach with shrinking success. With evolving technology, consumers demand a more sophisticated approach to digital engagement. Businesses must develop new values for consumers to deliver transparency, local, individual and tailored real-time information and authentic 1:1 interaction. The key to sustainable growth in a strong digital environment is to understand the behavioural shift in consumers and act accordingly. To do so, businesses have to expand their thinking of what 'digital' means from an operational, market and customer perspective to deliver a product and customer experience that is digitally sustainable. Need for digital transformation Digital transformation is revolutionising the way businesses develop products and markets, acquire and retain customers and disrupt themselves. Digital disruption is heavily driven by divergent thinking and the evolution of technology. Brands like Amazon, Airbnb and Uber have proven that even mature industries can be disrupted by creating new consumer experiences, values and needs. These businesses challenge existing revenue methods, eliminate cost structures and focus on operational flexibility. In the USA, Millennials recently overtook Baby Boomers as the largest living generation, with a buying power of $1.4 trillion annually, according to hispanicad.com. Millennials embrace technologies, demand personalisation and respond to engaging authentic online experiences. The current ‘share-economy’ phenomenon, which is heavily driven by Millennials, emphasises the need for digital transformation to secure long-term success. Digital transformation is required in order to compete in a global environment of digital disruption and ongoing behavioural shifts. Why businesses fail to digitalise Digital transformation involves risk. It impacts the current business and resources and requires a well-planned scope and financial resources – areas that many businesses are afraid to challenge. Combined with slow digital innovation, a risk averse bottom-to-top approach and a general misunderstanding of social media and digital technology are major internal roadblocks to build a digitally focused environment. Furthermore, it shows a lack of digital understanding in the top management to create a framework for digital transformation and digital growth. Paradoxically and controversially, businesses believe staff fall short in making the most of digital investment and to drive digital innovation, according to Econsultancy’s Marketing Budgets Report 2015. How to persuade digital shifts and create a digital transformation framework
Finishing with the recent statement of PM Malcom Turnbull on ABC News: "We have to recognise that the disruption that we see driven by technology, the volatility and change, is our friend ... if we are agile and smart enough to take advantage of it", there is hope that NBN and digital policy reforms will incentivise Australian businesses to look at how to operate strategically in digital environments.
1 Comment
20/4/2016 04:48:38 pm
Mirko, as I commented on FB, you've really nailed this here. Well argued, good examples and justification and provocative.
Reply
Leave a Reply. |