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Skills gap, lack of budget, and competing initiatives holding back innovation in A/NZ enterprises - report

Enterprises on either side of the Tasman are far more confident in their ability to innovate than their Asia-Pacific neighbours, according to new research from Boomi.

Boomi, a Dell Technologies business, has revealed the findings from its global research report, The State of Modernisation, Transformation, and Innovation in the Digital Age.

The report, commissioned with Vanson Bourne, found 27% of Australian enterprises and 20% of those in New Zealand ‘completely disagreed’ with the notion their organisations were struggling to innovate quickly enough, compared to the APAC average of only 12%.

The survey of 1,200 business and IT decision-makers around the world, including Australia and New Zealand (A/NZ), also found that despite A/NZ businesses showing the most confidence in their ability to innovate at a competitive rate, skills gaps continued to hold projects back.

For Australian respondents, insufficient in-house skills (35%), multiple competing initiatives (35%), and a lack of budget (34%) were the most cited organisational hurdles. 

The skills gap in New Zealand was far more pronounced with 56% of enterprises reporting that a lack of internal skills hampered innovation efforts, followed by insufficient budget (39%), and too many competing initiatives (33%).

Although Australian enterprises reported that a lack of internal skills was the most common handbrake on innovation, the nation was far better placed than its APAC neighbours, with 50% of enterprises across the region lamenting their levels of technical debt.       

Nicholas Lambrou, managing director A/NZ at Boomi, says the research showed enterprises across A/NZ saw the burning need to transform and many were turning to ‘low-code’ or code-free technology, particularly integration platform-as-a-service (iPaaS), to bridge internal skills gaps.

In both nations, iPaaS was the most popular solution when it came to integrating on-premise and cloud applications with 48% of Australian businesses and 35% of New Zealanders planning to leverage the technology in the next 12 months. 

“The time for change isn’t coming – it’s already here,” says Lambrou.

“More than 90% of Australian enterprises and 100% of our Kiwi counterparts agreed technology will redefine how their businesses operate within the next decade. The skills gaps that continue to hold businesses back from achieving their aims show that the code-heavy architectures of legacy environments become more of a liability every day," he explains.

“Tellingly, almost 9 in 10 Australian businesses and 95% of those in New Zealand have already begun their transformation journeys. As these projects progress, the need to easily integrate a mix of on-premise and cloud applications – while juggling multiple initiatives – will highlight just how complicated and costly manual integrations and legacy middleware are as they hold enterprises back from their desired future states.”

Interestingly, while Australian and New Zealand businesses showed the most confidence in their ability to rapidly transform, the two nations had different views on the nature of those journeys.

Whereas 34% of Australian enterprises reported they had almost completed transformation projects, this was true for only 10% of those in New Zealand. However, when asked if they were continuing to look for ways to improve transformation projects, only one quarter of Australian respondents said they were doing so, compared to 45% in New Zealand.

“Despite sharing many of the same values, it seems the outlook on what transformation entails is quite different,” Lambrou says. 

“This data may suggest that whereas Australians tend to see transformation projects as a journey with a defined final destination, New Zealanders think of transformation as more of an ongoing, continuing process of technological adaptation and evolution.”      

The report also revealed that across the Tasman, enterprises had different drivers behind innovation initiatives. Australian companies cited improving the customer experience (53%) and gaining a competitive advantage (52%) as the primary aims of innovation initiatives, while New Zealand businesses were more concerned with moving into new markets (50%) and gaining a reputation as an innovative brand (50%).

Hybrid Cloud approach favoured by majority of business across A/NZ in the short term, the report says.

In both Australia and New Zealand – as well as across the wider APAC region – a mix of on-premise and cloud applications was the preferred architecture. Looking to the next 12 months, only 4% of Australian businesses and 5% of New Zealand businesses said all their applications would be cloud based. While 82% in Australia and 85% in New Zealand favoured a Hybrid Cloud approach.

Despite Hybrid Cloud supremacy, A/NZ businesses most concerned in APAC on shifting applications to the cloud. Although a hybrid approach was the favoured application mix for both New Zealand and Australian businesses over the next 12 months, the two nations reported the highest number of organisations keeping all their applications on-premise in APAC. In New Zealand, 10% were keeping all apps in-house, while 8% were doing so in Australia. The next closest was Singapore with 5%, which was also the average across APAC.
 
While technology priorities were similar in both countries, New Zealanders were more enamored with IoT than Australians, according to the report.

When asked which technologies were receiving the largest investment as part of innovation initiatives, the top five priorities for Australian enterprises were Data Streaming (37%), Big Data Analytics (33%), Artificial Intelligence (31%), iPaaS (30%), and Security (29%). In New Zealand, the key technologies were Security (44%), iPaaS (39%), Big Data Analytics (39%), IoT (33%), and Artificial Intelligence, Machine Learning, and Robotics (all three were cited by 28%of respondents). 

“Whether those concerns are issues around data sovereignty, security, or even the lack of internal skills to manage such a transition, businesses in A/NZ showed the most trepidation about shifting workloads to the cloud across APAC,” Lambrou says.

“New and unexpected complexities introduced by the ‘new normal’ of work have made continued modernisation, transformation and innovation more important than ever," he says.

"It is imperative business and IT decision makers turn their attention to connecting their digital assets – whether all on-premise, cloud, or a mix of the two – to further reduce cost, accelerate time to value, and ensure business can stay productive in these uncertain times.”