Australia earns mixed record in IT agility

Australia earned a mixed record in a recent survey that revealed how slow some enterprises can be when it comes to digital transformation.

The inaugural Built to adapt: Benchmark report, commissioned by Pivotal Software, found that while Australian businesses were quick to apply updates to software, some sectors seriously lagged their international counterparts when it came to deploying new applications.

The benchmark, developed by Longitude and Ovum, surveyed more than 1,600 IT executives globally – including 200 in Australia – and found that Australian companies performed well on incremental improvement, taking an average 7.1 days to deploy a simple change to software, compared with 7.6 days in the UK and 7.8 in Singapore.

However, when asked how long it took to get a new business-critical application into production, Australian telecommunications companies took 17 days – compared with UK peers, which needed just one day and the US where it took two.

Retail businesses were even more sluggish – taking around 20 days, compared with just a day for UK and US retailers.

Overall, Australia ranked fourth out of the six markets surveyed.

Pivotal’s benchmark reinforces the findings of another recent report commissioned by Data61, which revealed that although the nation could gain A$315bn of additional economic activity over the next decade from digital innovation, Australia’s track record is poor.

The report, which was prepared by Alpha Beta Advisors, noted that Australia has captured a third less value than its advanced economy peers, with the total economic value derived from digital innovation representing 7.4% of its total GDP over the past two decades. This compares to 11.2% of GDP in advanced economies.

It also noted that only 8% of capital investment since 2000 had been directed towards information and communications technology.

Adrian Turner, Data61 CEO, said the fact that Australia was 34% behind its OECD peers in digital innovation was concerning, even though there has been some progress.

“There are pockets of unbelievable digital transformation going on,” he said. “We are seeing companies that are more information centric or data centric – like financial services institutions, telecommunications – and they are the ones that are feeling the challenge of multinationals.”

Turner also acknowledged the challenge some of these businesses faced when looking to innovate and transform: “They are working hard, there is a culture piece and a strategy piece and a technology piece and a lot of these big institutions have legacy systems that they are evolving. It’s a complex thing.”

A bright spot in Pivotal’s research was that Australian enterprise was performing well in terms of cloud migration. Around 38% of Australian applications have been built or refactored to run in the cloud, second only to the US.

Pivotal’s senior vice-president of services and customer success, Edward Hieatt, said: “Businesses across every industry need to innovate at the speed of startups to succeed in a world increasingly defined by software. As a result, fast organisations are best positioned to develop and deploy software that successfully responds to demanding and evolving consumer expectations.”

Anthony Wiseman, head of innovation at EnergyAustralia, said the challenge for incumbents is not only the legacy technology that they have, but also legacy culture and processes.

“Fear of failing is why in big businesses you will often see internal approval processes that stifle speed and rapid scaling. There is comfort in taking time to make decisions, in being thorough and getting input from a range of experts and stakeholders,” he said.

“More often than not, corporates are set up to eliminate risk, rather than manage it. Startups will take calculated risk and move quickly. Founders are empowered decision makers.

“At EnergyAustralia, we employ lean startup methodologies for our innovation activities to capitalise on great ideas with fit for purpose governance, dedicated funding and resources – which captures the best of both worlds between a startup and a corporate.”