The Innovation vs. technical debt tug of war

Technologies:

The technologies being used to drive innovation are similar in Australia to other markets, with strong focus in Australia on cloud, IoT and 5G. 

• Australia lags in investment in blockchain, quantum computing, and AR/VR, but has plans to invest in all of these.
• However, more than 25% of Australian organisations have no plans to invest in edge computing, robotics or the metaverse.
• Data indicates that these executives have yet to find compelling uses for these technologies in their organisation and/or industry, something that is similar to other markets for the metaverse (but not the others).

Enablers

While Australian organisations are slightly behind other markets in having established their innovation strategies (42% vs 54%), they do have them under development to close that gap (50% vs 41%). 

• Their priorities are similar with optimisation topping the list for 2023 (41% vs 42%), followed by building resilience (31% vs 29%) and growth (28% vs 29%).
• They are enabling these strategies with similar elements – a dedicated lab (56% vs 58%), a chief strategy / innovation officer (46% vs 47%) and activities to maintain an innovative organisation.
• On the latter Australian executives are relying more on culture (46% vs 36%) and an agile environment (30% vs 25%) than processes (18% vs 23%) and talent (6% vs 16%).
• 50% of Australian companies that use design thinking to enable innovation aren’t achieving desired results. Of the companies that use the lean start-up method (both Australia & global), almost 54% aren’t getting the value promised from using this methodology
• In all markets, a recession is more likely to slow down innovation investments (46% vs 48%) than increase it (34% vs 32%).

Challenges:

The impediments to innovation are similar in all markets, and all ranked regulatory and compliance requirements as the highest (48% vs 42%).  Security risks were viewed as the next biggest challenge in other markets but was equal 5th in Australia, although recent data / security breaches might have changed that view.  Architectural constraints (including technical debt) were the 4th most significant challenge in Australia (vs 8th in other markets). 

When asked more detailed questions on technical debt, again Australia was similar to others. 100% of Australian executives (vs 98%) reported a moderate to significant impact to innovation, with significant budget (31% for both) and people effort (17% vs 21%) dedicated to addressing technical debt.  Australia showed the most divergence from other markets on the technologies used to address technical debt.  

Skills gaps were also a common challenge, particularly in areas of design thinking, solution architecture and enterprise agility, although Australian executives rated strategic thinking slightly more important than technical knowledge (the next most important elsewhere).  Close to two thirds in Australia and globally believed agile was enabling innovation. Only 50% of Australian organisations using design thinking said the same thing.

Security risks such as data loss, improper controls and poor access management associated with implementing new technologies is a concern for majority of companies in Australia and abroad.

Key takeaways:

Innovation is a top priority among executives both in Australia and global markets. However, in Australia, innovation efforts continue to be constrained by ‘red tape’ from both internal and external forces. Australia’s current policy environment doesn’t do much to incentivise R&D and entrepreneurship.

Creating an innovative environment through culture, processes and technology is perceived to be of higher importance for driving innovation within an organisation than specific skills and capabilities of individuals.

Investment in emerging technologies such as blockchain, quantum computing and metaverse is on the rise, however, Australian companies in particular are looking to increase their uptake of low code/no code tools. This fast adoption of new technologies will require organisations to invest in upskilling.

About the Global Technology Executives Survey

Protiviti surveyed more than 1,000 CIOs, CTOs, CISOs and other technology executives and leaders (n = 1,050) to ascertain the status of several concepts around innovation and technical debt across numerous regions, business types, revenue classes and management roles.

The respondents answered 18 survey questions which were collated and then transferred into reportable elements with totals, averages, and divisions based upon the size of the organisation, the location of the organisation, the industry and the role the respondent played within the organisation.

Read our report. The Innovation vs. Technical Debt Tug of War, here.