More than 83% of Australian businesses surveyed for a new study by IDC and Canon confessed to still using still using paper based document processes in 2016, although around the same number claim to have begun their digital transformation journey.

This figure breaks down to just 14 per cent having completely digitised business processes, 57 per cent with low to moderate digital transformation in their document environments, and 28 per cent still having completely paper based document processes.

The IDC-Canon Transformation Study 2016 is based on 170 phone based interviews with Australian organisations ranging in size from 100-999 employees including the legal, utility, insurance, construction and manufacturing sectors.

IDC Research Director Adam Dodds said the study shows the perception and the reality of where businesses are at is different.

“Whilst the study shows businesses have started down the path, the results indicate they’re not as advanced as they think they are and could use a digital reality check.

“We predict by 2020, one third of top market share leaders will be significantly disrupted by competitors using new technologies. They are the driving force behind digital transformation and in order to stay relevant and competitive organisations must be willing to transform or go out of business.  The rising cost of operations, new business models and changing customer buying patterns are all factors in the disruptive state of affairs right now.”

More than half of businesses surveyed said they currently acquire more data from digital sources than from paper.  The skew to digital is anticipated to grow to nearly 80% by 2020, which still leaves a significant requirement for digital capture.

Priorities for digitising document-based processes lean heavily towards back office, administrative and operational areas.  In particular, financial processes such as accounts payable and receivable were seen to be the most critical to transform.  These processes are viewed as “low hanging fruit” because they are both document and resource intensive and readily digitally transformed.

IT decision makers in particular saw improved decision-making as the main benefit of digital transformation, with 89 per cent of businesses citing this.

“The key here is about improving the visibility of business information to inform decision-making processes.  Efficiency dominated the other top factors being increased speed, reduced human error and reduced cost,” Mr Dodds said.

A higher number of respondents cited improving employee experience as a main benefit over improving customer experience.

Canon Australia Head of Customer Marketing Nitya Padman believes this is because businesses realise they need to transform their processes and workflows if they’re going to attract and retain young talent.

“Employees are a critical part of the transformation process, if employees aren’t on board it’s very hard to change processes and practices.  The study shows 47 per cent of businesses feel change management is a barrier to digital transformation and successful change hinges on employee experience.

“If you get change management right and succeed in improving employee engagement that should translate to a better customer experience which will recoup the investment in process change.

“We found a strong interest in improving HR and Procurement operations in particular,” said Padman

“This is particularly to improve employee engagement and the reporting demands presented by OH&S compliance. Businesses need to automate these processes to ensure they do not fall below the compliance standards that are required.”

“Logistics and supply chain management is also another area with a major focus on automation particularly in the manufacturing sector.”

“Trends in the study also point to differences between small to medium sized businesses and larger businesses.

“Small to medium sized businesses are heavily reliant on IT to help them stay agile, counter costs and improve productivity.  Their needs are immediate and they’re more readily able to transform to create more efficient workflows and improve ways of interacting with customers.  In short, smaller businesses are punching above their weight and moving ahead in the digital race.

“A big motivator for larger businesses to transform is the rising cost of doing business.  Larger organisations are heavily impacted by legacy systems.  This is a major deterrent to progressing at a faster pace along the digital transformation journey.

“What is clear is whatever size the business it’s critical to understand and be realistic about where you’re at in the digital transformation journey or risk getting left behind,” said Padman.