OPTUS RESEARCH SHOWS CUSTOMERS DEMAND BUSINESSES GO DIGITAL

Entertainment and retail businesses forecast the greatest increase in online revenue Digital innovation key to drive growth, according to Deloitte Access Economics

Australian organisations are embracing new digital technologies to meet customer expectations, provide products and services and create new business opportunities, according to the Optus Future of Business Report released today.

The report found that meeting customer expectations (72 per cent) is business’ number one driver for offering digital or online applications, followed by being more innovative at 53 per cent. This is well ahead of reducing costs (39 per cent), increasing revenue (34 per cent) and matching competitor offerings (22 per cent).

It also uncovered that 29 per cent of organisations now offer mobile websites to customers, up from 12 per cent a year ago. This is expected to rise to 47 per cent in three to five years. Forty eight per cent of organisations plan to make mobile applications available to customers in three to five years, up from 18 per cent now. Fifty per cent plan to interact over social media in three to five years, up from 39 per cent currently and more than double what it was a year ago.

“Our research shows that digital technologies can help business and government organisations create new revenue streams and improve engagement with clients and stakeholders,” John Paitaridis, Managing Director, Optus Business, said. “We believe Australian organisations should start reviewing their digital preparedness to ensure they have the right strategies and technologies to capitalise on these opportunities, or risk losing their competitive advantage – especially in a global marketplace. Our research shows businesses are taking action, with 90 per cent of organisations expecting to deploy digital applications in three to five years.”

Entertainment and retail sectors ambitious for online growth

The report demonstrates that some of the industries most exposed to pressure from customers, suppliers and international competitors are among the fastest to embrace digital business initiatives. Entertainment services and retail businesses expect the greatest increase in revenue from the online channel and are leading the way in making available peer-to-peer and mobile payment systems.

On average, entertainment services expect to increase revenue from the online channel by 10 percentage points over the next three to five years, while retail businesses anticipate an 11 percentage point rise over the same period.

Mobile payments are expected to increase, with the report finding 37 per cent of retail businesses and 39 per cent of entertainment services businesses intend to offer mobile payment services in three to five years. This is up from 4 per cent and 8 per cent of companies respectively that offer these services now.

Collaboration key to digital strategy

The report exposes the need for business units to collaborate more effectively on their digital strategy. Findings highlight a lack of coordination between the teams responsible for delivering digital projects. While 70 per cent of marketing respondents saw the marketing function as leading development of the digital strategy, only 34 per cent of finance respondents and 41 per cent of IT respondents had a similar view about the role of marketing.

In addition, finance departments may not be aware of marketing and IT’s plans to build mobile websites and applications, potentially threatening funding for these projects. About one-third (33 per cent) of finance respondents said their organisation planned to offer mobile applications to customers in three to five years, well below the 59 per cent of marketing respondents and 51 per cent of IT respondents that had the same view.

Digital innovation key to drive growth, according to Deloitte Access Economics analysis

An Industry Preparedness Index developed by Deloitte Access Economics based on the Optus Future of Business Report reinforced the findings – with the entertainment services industry topping the index in digital strategy with a score of 0.58 out of 1.00, followed by retail (0.48) and the finance and property sector (0.47). Manufacturing scored lowest (0.35).

Ric Simes, Director, Deloitte Access Economics, said: “Digital innovation is key to drive growth and efficiency opportunities, and will enable industries to build more value into their services and create new market opportunities for organisations. Based on the survey results, we predict that the investment in mobile apps will increase three fold to $600m by 2016.”

Further key findings – digital business:

• Customers are driving application deployment: 35 per cent of organisations believe customers will want to interact with them via mobile applications within three to five years, up from 18 per cent today. Eighty-one per cent of organisations have already deployed digital applications (online purchasing and ordering, online self-service, online service delivery, social media and mobile applications), up from 63 per cent in 2011. This is expected to increase to 90 per cent in three to five years.
• Social media engagement becoming widespread: Twice as many organisations now offer social media applications to customers today (39 per cent) than they did a year ago (19 per cent). Sixty-eight per cent of organisations currently have a customer-centric social media strategy, or are developing one.
• Businesses demand ROI on digital technology: While the majority of businesses (60 per cent) expect to measure the impact of digital applications by customer satisfaction, 40 per cent expect to measure increases in revenue and 33 per cent rises in profit in three to five years.
• NBN to deliver broad business benefits: 39 per cent of organisations expect the National Broadband Network (NBN) to increase bandwidth usage as part of selling to and servicing customers. Respondents also believe the NBN will improve productivity (35 per cent), increase market coverage (27 per cent), reduce costs (22 per cent) and drive them to optimise their online presence (21 per cent).

Further key findings – transforming the workplace:

• BYOD trend accelerates: Currently, 43 per cent of organisations allow employees to use personal tablets to access company information and systems, up from 23 per cent a year ago. Fifty-six per cent of organisations allow employees to use their personal smartphones to access these systems, up from 46 per cent a year ago.
• Cloud computing set to rise: Eighty-seven per cent of organisations expect to use some sort of cloud computing service in three to five years, up from 60 per cent a year ago.
• Internal collaboration on the rise: The number of companies using internal blogs, wikis and discussion forums has risen over the past 12 months. 59 per cent either have a staff-centric social media strategy or have one under development.
• Organisations relaxing work social media usage policies: 35 per cent of organisations currently allow employees monitored access to social media, up from 26 per cent a year ago. This figure is expected to increase to 40 per cent in three to five years.

To download a copy of the Optus Future of Business Report, please click here.

For media enquiries and to receive a copy of the report:
Kasia Ciszak/Derek Lau
Optus Corporate Affairs
Tel: (02) 80827850

Simon Fitzgerald/Mihika Gujral
Text 100 Public Relations
Tel: 02 99565733
E: sydneyoptusteam@text100.com.au

Simon Rushton
Deloitte Corporate Affairs & Communications
M: 0450 530 748

Note to editors
*About the Optus Future of Business Report: Stancombe Research & Planning surveyed more than 500 finance, IT and marketing decision-makers in government organisations of any size and private sector organisations with more than 200 employees about their current activity and plans to deliver digital solutions to both customers and staff. Survey respondents were not informed that Optus was conducting the research. Deloitte Access Economics used Stancombe Research & Planning’s findings as the basis for its analysis as well as consultations with selected stakeholders. The research took place between January and March 2012. The research expands on the Optus Future of Work Report, first launched in 2011.

**About The Industry Preparedness Index: The Industry Preparedness Index by Deloitte Access Economics provides an overall benchmark of how industries compare, based on selected indicators from the Optus Future of Business Report: Those with an NBN strategy; measuring the direct benefits of their online and mobile services; using mobile or online payments methods; with an external social media strategy; that conduct online sales; and those with a mobile website.