The digital age and artificial intelligence have revolutionised how organisations do business. Leading directors say companies that don’t embrace change now will be left behind.
Businesses are using data to enhance their understanding of what customers want. From this they are rethinking their digital transformation strategies. The key for directors is to make sure technology enhancements align with the company’s overall strategic vision.
“This is not a drill, this is not a little AI test case, it is a freight train coming at every organisation,” says Tim Trumper GAICD, shareholder and adviser to Quantium, former NRMA chair and author of AI: Game On: How to decide who or what decides.
The need for collaboration within the organisation is essential to be certain of the right focus being placed on change. Change should not be without purpose. Customer experience enhancement, driving efficiency, reducing risk and creating new opportunities should all be on the agenda.
Deciding how to measure success and refining needs and outcomes are ways that boards should approach digital transformation in their organisations, whether they be listed, private or not-for-profit.
The internet may have kicked off the digital age, but smart devices have taken it to the masses. The past 20 years have revolutionised how customers interact with businesses, and if those businesses don’t adapt or better still, lead the way, they will soon be left behind.
Harness digital tech tools
“Whatever business you’re in, your customers are using Amazon, Spotify, Netflix and Apple,” explains Trumper. “They’re experiencing real-time personalisation and one-click optimisation. They know what great looks like and they expect it from you.”
At the same time as ramping up customer expectations, digital tech is also providing the tools with which to meet them — because as customers interact with businesses now, they provide them with data.
“You need to put the customer at the centre of everything you do, with as much intelligence as you can, so you can find the future need of that customer before someone else does,” says Trumper.
Setting a company up to meet these challenges is loosely termed “digital transformation” and embracing it has quickly become a matter of survival for most companies.
Top concerns for leaders
In a KPMG report released in January this year, Keeping us up at night: The big issues facing business leaders in 2025, digital transformation — and extracting organisational value from it — rose from fourth place in the 2024 edition to first. More than half (53 per cent) of Australian business leaders nominated it as their main concern for the coming 12 months.
It's gone beyond the notion of an IT project, says Daniel Sekers GAICD, co-chair of Votiro Cybersec. “It requires a shift in culture. A digital-first mindset isn’t about technology. It's about thinking differently. It’s about seeing digital as a way to enhance customer experience, drive efficiency, reduce risk and create new opportunities.”
As such, it needs to be fully aligned with a company’s overall strategic vision. “Sometimes, leadership teams chase technology for the sake of it,” says Sekers. “They haven’t aligned it to the company’s strategy and long-term vision. The most important thing for the board to do is to collaborate with their executive team to form that alignment and agree on the success factors.”
Strategy and culture alignment
However, it goes beyond strategy and senior management, because with technology developing so rapidly, adapting to that change requires the right culture throughout an organisation.
“Culture eats strategy for breakfast and digital transformation is no different,” says Sekers. “Boards need to champion a culture that sees change as an opportunity and not a threat. If you don’t have a board driving that from the top and showing it’s a priority for the business, then barriers start to form creating resistance to change, which can derail a transformative project.”
Boards can drive these imperatives through communications with staff, but also by continually emphasising their importance in discussions with management.
“Many management teams are so busy running a company’s day-to-day operations, it’s hard to step back and think about solving the big strategic challenges,” says Michael Fingland MAICD, director of the Australian Restructuring Insolvency & Turnaround Association and founder and CEO of business transformation specialists Vantage Performance. “The board needs to ask how they will meet those challenges and how AI may provide the solutions.”
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Have the right skills
To find the right questions, directors need to have the right skills. That requires a process of continuous learning and engagement with the digital world. “You don’t need to have a board comprised only of tech-savvy people,” says Sekers. “What you do need are directors with a curious and open mindset, who are prepared to educate themselves and ask the right questions.”
Trumper recommends using AI tools. He credits Quantium for its pioneering work with the Claude language model, his adaption of which, together with publicly available information, enables him to frame better questions to ask management. As answers become cheap via AI, he explains, the right questions become much more valuable.
“I can say, ‘Based on these criteria, what would be the three best questions I could ask the CEO about this situation?’ Sometimes they miss the mark, but they’re mostly very incisive and often go beyond what I may have thought of alone.”
Fingland suggests creating a team from different areas of an organisation, who stay abreast of developments in AI. Task them with reading news, listening to podcasts, attending seminars and trialling apps — and putting their findings into a monthly one-page report to the board.
Customer relationships
“You have to think from the outside in, as opposed to just building things and thinking customers will come,” says Cheryl Hayman FAICD, non-executive director of Ai Media Technologies, Silk Logistics Holdings and HJ Langdon & Co.
“Who are our customers? What do they have today? What are they going to want? How might we pre-empt some of what they might want in the future? Then align the needs to deliverables using quality data and strategy alignment.”
Data on customers and mobile phone usage, for example, enabled CommBank and Telstra, together with Quantium, to develop a warning system to help protect against identity theft.
Obstacles to opportunity
What might stand in the way? “The number-one obstacle is apathy,” says Fingland.
There can also be outright resistance to change, because people fear job losses or are more comfortable using legacy systems. The board and management must try to counter this by explaining strategic necessity and communicating the benefits. “One of the greatest benefits of the enhanced use of automation or AI,” says Hayman, “is that it can reduce the need for staff to spend time on menial tasks and work on higher-order-thinking and insight-driven opportunities, which should drive greater work fulfilment”.
Another potential hazard is data infrastructure and privacy — and concerns among customers and staff. “You can’t rely on third-party software to do it,” says Sekers. “Ask, ‘Where is our data domiciled? How does that impact our data privacy and regulatory obligations?’”
The greatest risk is doing nothing.
“If you blink, you’re going to be overtaken,” says Fingland. “Because if someone can adopt all these tools, improve the customer experience, get products to market quicker and take 30 per cent out of their cost base, you’re never going to catch them. You’re going to see some big names start to drift over the next five years, because they didn’t get it — they had too big a risk lens and too small an opportunity lens.”
Essential points
- Put the customer at the centre of everything
- See digital as a way to enhance customer experience, drive efficiency, reduce risk and create new opportunities
- Align digital transformation strategy with the company’s overall strategic vision
- Collaborate with the executive team to form alignment
- Agree on success factors
- “This is not a drill, this is not a little AI test case. It is a freight train coming at every organisation.”
This article first appeared under the headline ‘Digitial transformation’ in the April 2025 issue of Company Director magazine.
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