Artificial intelligence keeps the spirits up during the pandemic – The Australian Financial Review

The days when technology strategy was the sole preserve of IT specialists have long gone, and businesses are looking to have digital leaders across departments and dotted around the boardroom table.

However, that doesnt mean that business tech has become homogenous. There is significant competitive advantage that comes from doing things smarter than rival operators.

ADAPTs director of strategic research Matt Boon says well-established retailers are turning to tech solutions after their business models were upended by the pandemic.

It is always remarkable to me as I go around the world that companies are at different stages of digital transformation, in terms of their migration to the cloud, and in terms of their usage of data, CEO of global tech services giant Cognizant Brian Humphries tells The Financial Review.

In basic terms, every company in the world is trying to accelerate growth, protect themselves from next-generation companies, trying to upsell and cross-sell, and trying to maximise customer and employee satisfaction.

Big companies know that whether they are in insurance or healthcare, there are start-ups that are so disruptive, that they have to become much more digital if they want to survive.

Humphries was in Australia to visit local clients, including Telstra and Australia and New Zealand Banking Group, and says across industries, the emergence of easily accessible software-as-a-service, with AI-based functionality on tap means companies have adopted a fail fast culture, more associated with start-up disruptors.

Humphries says even organisations that have previously been tech laggards have had a change of attitude in recent years.

Ill probably have met 15 to 20 clients in Australia and New Zealand on my visit and every single one of them no longer thinks of IT as a cost, Humphries says.

They think of it as an investment and as core to the business; it is now the difference between winning and losing.

For a report entitled Embracing the Future: Top 12 Strategic Priorities for 2022, technology research firm ADAPT conducted a study based on interviews with over 650 senior Australian executives about their attitudes towards tech investment and how technology is being deployed.

Like Coles adoption of software to streamline and prioritise stock ordering, ADAPT found a desire to become data driven and improve operational effectiveness were the key aims of most of the execs surveyed.

Well-established retailers saw their business models upended by the pandemic, and have been compelled to re-imagine business functions and develop new product and service lines only possible through accelerated digitisation programs, ADAPTs director of strategic research Matt Boon says.

Those leading the pack now realise digital transformation isnt an end goal, but a constant state of flow needing executive support.

Hampering efforts across Australian businesses to achieve these aims of being data-driven, according to ADAPT, are a number of main hurdles. First, data often resides across disparate systems and applications, making it hard to analyse effectively.

There is also a general lack of sufficient data skills in many organisations, a lack of executive ownership from non-technology focused business leaders and insufficient budget dedicated to making it happen.

Boon says that while 60 per cent of Australian IT leaders have indicated a focus on developing IT culture in their organisations, ADAPT considers just 43 per cent of C-suite executives and board directors to be digitally savvy.

Companies need to adopt emerging technologies, but are being held back by low levels of digital literacy from the boardroom all the way down through an organisation, Boon says.

IT leaders are right to prioritise the development of their organisations digital savviness, as the success of new initiatives in the future depends upon their teams willingness to support them.

While a broader shift of systems on to cloud-hosted infrastructure, and the installation of myriad systems to try and protect against cyber security threats are responsible for a significant portion of tech budgets across all companies, ADAPTs study shines a light on the relatively nascent technologies also being trialled.

Machine learning, artificial intelligence and robotic process automation are the most common of these areas to be attracting funding, ahead of chatbots, blockchain, the internet of things (IoT) and virtual or augmented reality.

Australian companies including Lendlease and Newcrest Mining have both spoken in recent times about how the combination of IoT sensors with cloud-based systems and virtual and augmented reality have allowed them to reap significant benefits from building digital twins.

These virtual representations of real-world conditions at their various assets, such as building sites or gold mines, can be analysed from the safety of an office, with potentially lucrative benefits.

Newcrest estimates that a digital twin of its flagship Cadia mine in NSW could unlock hundreds of millions of dollars of untapped value a year, through more efficient maintenance and enabling the mining of more gold.

Mikko Krkkinen, the CEO and co-founder of Relex Solutions, the software firm helping Coles get the right drinks on its liquor store shelves, says that while his company focuses on the retail sector, the focus on supply chain planning and the use of AI and machine learning-based technology is relevant across industries.

Were seeing a need for retailers to be able to analyse and integrate unprecedented amounts of data across various parts of their business, and we know AI to be a powerful tool for optimising wider parts of the business, Krkkinen says.

The pandemic made retailers, along with everyone else, realise how unpredictable the world has become.

Its impossible to predict every twist and turn the market will take in the future, whether near or distant. Companies committed to long-term future success understand this and invest in solutions that help them remain agile and adaptive in their approach and plans, regardless of how the market evolves going forward.

Top 10 business priorities:

(Source: ADAPTs Embracing the Future: Top 12 Strategic Priorities for 2022 report)

Top challenges to technology initiatives

(Source: ADAPTs Embracing the Future: Top 12 Strategic Priorities for 2022 report)

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Artificial intelligence keeps the spirits up during the pandemic - The Australian Financial Review