The digital divide

The digital divide
Published: 
February 2013

Ninety per cent of smart phone owners use their phones to look up local information. Sixty per cent then act on it to visit, buy from or interact deeper.

It’s about designing a differentiated end-to-end customer experience. It’s about integrating multiple channels of delivery, seamlessly, and accelerating the digitisation of business operations.

The gap between the haves and the have-nots of digital technology and internet access has a name. It’s the digital divide, and most people understand it to be the gap that distorts the playing field when it comes to opportunities in education, in career progress, social inclusion and political participation.

There’s a digital divide for business too, opening up as a chasm between those companies that have embraced digital and those that are still fiddling around the edges of the technology revolution.

Digitally mature businesses are more than twice as likely to innovate, and are almost five times more likely to export than companies that haven’t allowed technology to challenge and reshape their way of doing business.

This is what a recent UQ Business School study found in a survey of 500 Brisbane businesses. The study was designed to create a framework for measuring digital maturity and to identify stars in the Brisbane business landscape. It was undertaken with Ernst & Young for Brisbane Marketing in an attempt to identify gaps and to find the leaders when it comes to embracing digital opportunities, even when it means a radical rethink of how the business works.

STANDOUT STATS FROM THE BRISBANE DIGITAL AUDIT:

Stand-out innovators aside, Brisbane business was awarded a mediocre C according to the framework of digital maturity created for the study. Many businesses, it seems, are failing to join the dots between new technology and new commercial and operational opportunities.

The challenge, says Associate Professor John Steen, co-author of the report with Associate Professor Marta Indulska and Dr Martie-Louise Verreynne, is not technical:

“Irrespective of industry sector and business size, digital is transforming business. Traditional businesses are being disrupted and new models are emerging. The challenge that businesses must rise to is not technical.”

“It’s about designing a differentiated end-to-end customer experience. It’s about integrating multiple channels of delivery, seamlessly, and accelerating the digitisation of business operations.”

The attempt to understand a business’s digital DNA is not unique, and other studies suggest that Brisbane businesses are not alone in failing to fully embrace the challenges and changes that digital technology presents.

A US study by private consultants Jeffrey Rayport and Tuck Rickards, reported on Harvard Business School’s www.HBR.org, found that only nine companies in the Fortune 500 could be called ‘highly digital’. The four criteria used to assess this included: generating a high percentage of revenues digitally; leadership (both the CEO and the Board) with deep digital experience; doing business significantly enabled by digital channels; being recognised as transformational within its industry.

Rayport and Rickards suggest that leadership has a lot to answer for. To guide companies in innovative ways, they say, boards must know what innovation looks like. And while tech companies are awash with digitally literate boards, other sectors have not seen this as a critical attribute of at least some board members. It’s a situation that is changing. Pepsi, Procter & Gamble, Wal-Mart, Berkshire Hathaway and FedEx are just some non-born-digital businesses that have begun to add digitally experienced directors to their boards. It’s a trend Rayport and Rickards predict will take root.