The digital imperative

AICD CEO Angus Armour FAICD and Microsoft Australia and New Zealand Managing Director Steven Worrall share their thoughts on the Directors on Digital podcast.

A key part of a modern board’s role is to drive the adoption of technology and processes to improve services for customers and to innovate, disrupt and spur growth. This guide features case studies of successful digital transformations, including Foxtel’s launch of the Binge platform and how technology contributed to the Commonwealth Bank’s response to the APRA report into its governance and culture.

Generally, the AICD’s 2019 research Driving innovation: the boardroom gap found that Australian boards lacked technical and innovation expertise. That has likely improved over the past three years as directors have made a concerted effort to skill up, and because of the rapid change brought about by the pandemic. The AICD has initiated several new programs, including the Directors on Digital podcast collaboration with Microsoft, to help directors bridge the gap. The take-up of that podcast, with more than 17,000 downloads at time of print, has been tremendous. Australian directors are hungry to learn and we will be releasing follow- up research later this year to measure progress.

But Australia will need more than a firm-level response if it is to improve its international competitiveness. We continue to lag in international technology rankings. Accenture’s Digital Performance Index ranks us second-last of 37 OECD countries for investment, uptake and output in digital technologies. According to Accenture, we trail other developed countries in cloud computing, automation, machine learning, big data, Internet of Things, 3D printing, blockchain and drones.

Even in an area where we have an abundance of talent, quantum technology, we are falling behind, according to a report by the Australian Strategic Policy Institute. In 2015, we ranked sixth in investment among the nine largest economies in quantum technology. Today, we’re ninth.

For our national prosperity we need a co-operative effort, economy-wide, between government, the private sector and drivers of research like our universities. We must harness these critical technologies to determine the future success of our organisations and our economy. Funding is only part of the answer. We need culture change across that entire ecosystem to drive stronger results.

We hope this guide can play a part supporting your digital capability and you find it useful in implementing your own digital strategy. Thank you particularly to Microsoft and all of the directors and experts who have contributed their knowledge to this work.

Angus Armour FAICD

AICD CEO

It might have become a cliché to say that COVID-19 has accelerated digital transformation. Yet it’s unavoidable. For the past two years, the boards of all Australian businesses – from start-ups to incumbents, scale-ups to conglomerates – have steered their organisations through a period of uncertainty, disruption and innovation by necessity.

But the Directors on Digital podcast isn’t just about the challenges and opportunities Australia’s company directors have had to navigate over the past two years.

The imperative to innovate has been gathering strength for more than a decade now, powering the emergence of digital natives across industries and forcing incumbents to digitalise at pace. Well before the pandemic, directors could see the writing on the wall: evolve or be left behind.

From moving back-end systems to the cloud to rolling out digital-first products and services, organisations know that digital transformation is the key that will unlock better customer experiences, open up new markets, enable more efficient ways of working and, ultimately, guarantee stronger shareholder returns.

Many, however, lack a blueprint. Digital skills, experience and expertise are in short supply in Australian organisations, including in our boardrooms. That’s why so many company directors tuned in to the first season of the Directors on Digital podcast – and it’s why we have created this guide.

This is a compilation of insights from some of Australia’s leading boardroom luminaries, who spoke to the podcast about their failures and their hard-won lessons in all things digital transformation. Packed with practical advice and actionable next steps, think of this guide as your blueprint for digital transformation – the ‘How to’ for the digital director.

We hope you find this guide useful as you steer your organisations into the next phase of transformation, in which digitalisation will become ever more hardwired into the DNA of corporate Australia.

We would like to thank all the directors who joined the podcast to contribute their insights – your generosity in sharing your experiences will empower many others to follow in your footsteps along the often challenging but always exciting digital transformation journey.

We look forward to seeing you in Season 2.

Steven Worrall

Managing Director

Microsoft Australia and New Zealand