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The pandemic has significantly accelerated the pace of digital transformation among Australian businesses. The past 18 months have seen organisations across the country acting rapidly to digitise business processes and move their businesses online. 

This drive towards online business is a necessary and considered response to the changing needs of customers, staff and suppliers during the pandemic – but it also has more far-reaching implications and benefits.

Jerry Macey, CommBank’s Head of Consumer and Diversified Industries, has been watching consumer behaviour and trends for many years. He says customers have increasingly come to expect seamless online service, becoming more impatient with friction and inconvenience.

At the same time, the drive to digitise and move online has exposed key issues these businesses need to overcome to derive maximum benefit from their investment in new technologies – from guarding against cyber-threats, to avoiding technical debt.

Increasing digital investment

As the pandemic started to bite in 2020, Australian businesses responded by enhancing their technological capabilities. CommBank research shows 3 in 5 Australian businesses increased their investment in new technology in FY2021, with 56% focused on developing their online capabilities.

Health and education businesses (68%) were among the most likely to increase their use of technology – a finding confirmed in the latest CommBank GP Insights Report, which shows that 59% of patients surveyed had a telehealth consultation with a GP in 2021, up from 35% in 2020. Some 53% of practices spent more than originally budgeted on technology during the pandemic, and most expect to maintain or increase that level of investment in future.

That investment has created additional flexibility for both practitioners and their patients. “You can now have a work-from-anywhere GP,” GP Todd Cameron says in the report, adding that patients’ telehealth experiences during the pandemic has altered their expectations of how consultations and medical services can be provided. Cameron also says new technologies help to mitigate rising costs: “Automation is one mitigation strategy, plus directing low-value work to distributed teams outside the practice.”

Building the digital backbone

CommBank analysts say the proliferation of digital platforms and software as a service has enabled organisations to scale rapidly and reliably, adopting a range of ready-made solutions for everything from processing and payments to legal, accounting, logistics and marketing. However, they also caution that effective digitisation involves more than simply bolting digital services on to an existing business model.

“We do see businesses looking at how they can optimise parts of their operations through technology – basically doing what they were already doing, but online,” says Adam Smallhorn, CommBank Cyber Community and Education Manager. While this highly focused approach can speed up implementation, it can also mean missing out on the more profound productivity benefits that can result from methodically rethinking each step of the business’ operating model.

Businesses that take a piecemeal approach also risk incurring an ongoing technical debt. “Whenever you bring on new tools and systems, you've got to consider the long tail involved in managing them, making sure they're configured correctly, keeping them updated,” says Smallhorn. 

“And when one system reaches end of life, or when it requires an upgrade, then you've got this technical debt – keeping multiple systems running in a much more complex environment than you're used to.”

Digitising business processes – the productivity dividend

Done well, digitisation can generate enduring financial benefits. In its 2020 Australia Rebooted report, PwC says that, over the five years to 2020, the adoption of cloud services yielded an estimated $9.5bn benefit in improved productivity.1

Yet the productivity gains from digitisation are neither automatic nor universal. The OECD’s 2019 Economic Outlook found that the biggest beneficiaries of digitisation were firms with well-developed technical, managerial and organisational skills – firms that already enjoy a productivity advantage.2

These businesses at the ‘technological frontier’ are among those most likely to use technology as just one element in a larger operational transformation – by creating connected and autonomous supply chain ecosystems, for example. In a separate report, PwC found organisations digitising supply chains typically save 6.8% a year in supply chain costs, with a payback period of just 1.8 years.3

Making digital systems secure by design

As businesses digitise, they are exposed to a growing range of cyber-threats. In a recent X-Force Threat Intelligence Index, IBM Security found that cyberattacks rose last year as criminals sought to profit from new vulnerabilities created by the pandemic, with incidences of ransomware, data theft and server access attacks all increasing.4

Smallhorn echoes messaging from the Australian Cyber Security Centre5 when he says the key to protecting your business is to get the basics right, by building security into the foundations of your infrastructure and your operations.

“The biggest risks happen when businesses move swiftly to get their operations online, without taking the time to review their strategy, and put the right safeguards in place” he says.

“It’s really essential to do an audit of all the systems and platforms you’re using, what data you hold, where it's stored, and where the data flows in and out of the organisation. You also need to make sure the technology is configured securely and is up to date, so you can be sure you’re building on strong foundations.”

Staff education is also essential, since social engineering remains a key attack vector, especially when much of the workforce is working remotely with increased reliance on online systems.

“Ransomware has been the headline attack of the past few years,” says Smallhorn. “We’ve seen multiple reports of large companies falling victim to attacks that can start relatively innocently with people clicking on emails, downloading and opening attachments, or using the same old favourite passwords.

“There are some relatively quick wins that are easy to implement – multi-factor authentication on your important accounts like accounting and emails can help prevent data breaches and payment fraud. Using a strong password and considering a password manager, and turning on auto-updates for your devices, where available.

“Sometimes smaller businesses are in a better position to get the basics of their security right because they have fewer personnel, fewer devices, and less complexity in their digital footprint.”

Our digital transformation experts

Jerry Macey is CommBank’s Head of Consumer and Diversified Industries. A Chartered Accountant with masters degrees in Applied Finance and Leadership, he has more than 15 years’ experience in digital transformation, sales strategy, change management and product development across a range of industries in the Australian and UK markets. He currently leads the bank’s specialisation in consumer-facing industries (retail, entertainment, leisure and tourism, and franchising), delivering strategies to help clients grow and succeed in an unpredictable operating environment.

Adam Smallhorn is a CommBank Cyber Community and Education Manager, part of a team dedicated to raising awareness of digital security best practice and helping clients make the most of their investment in digital transformation. A sought-after presenter and speaker, he plays a key role in CommBank’s security awareness capability, speaking to hundreds of Australian organisations and businesses each year. Adam holds an honours degree in Computer Engineering, and in addition to his CommBank role, helps to educate the next generation of cyber security professionals as a tutor and industry advisor to UNSW’s cyber security courses.

This article is part of the CommBank Foresight Spotlight Series.

Things you should know

1 PwC, Australia Rebooted, 2020.
2 OECD Economic Outlook, Volume 2019, Issue 1.
3 PwC, Connected and Autonomous Supply Chain Ecosystems 2025, 2020.
4 IBM Security, X-Force Threat Intelligence Index 2021.

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