Published on the 01/02/2024 | Written by Heather Wright

Multiple technologies are coming into play for A/NZ business…

Talk to Deloitte’s Matt Dalton about the current state of technology across Australia and New Zealand, and his advice for businesses for the year ahead, and the phrase ‘thoughtful and deliberate’ peppers his conversation.

With generative AI continuing to be ‘the story of the year’ [yes, it’s only February, but we’re making the call now!] Dalton, Deloitte New Zealand partner, is clear that overfocusing on any single technology risks failing to see the forest for the trees.

“Hype equals words not practical technical capabilities.”

Dalton was talking to iStart for the release of Deloitte’s 15th annual Tech Trends report which highlights advancements across six macro technology forces which the professional services company says are critical to business transformation.

It’s a snapshot of the growing business imperative to balance today’s tactical needs with tomorrow’s strategic ambitions, split between trends that are more forward focused and innovative, supported by a set of foundational trends which have evolved over time.

It’s getting the foundations set which Dalton believes is currently key for Australian and New Zealand businesses.

“Across Australia and New Zealand, many organisations are going through the activity of renovating their core,” Dalton says.

After years of investments in once-cutting-edge innovations, companies are grappling with an expanded set of core technologies – mainframes, networks, data centres and other systems in need of modernisation.

But here, the trend around technical debt to ‘technical wellness’ is ‘very pertinent’ and today’s more fiscally constrained times see organisations looking to be more selective and deliberate about where they modernise – what can I keep for the future and wrap with other technologies – rather than renovating everything, he says.

He notes many local banks are currently either considering or doing core replacements, but being very selective in their process.

“It’s about trying to break it down and be very thoughtful and deliberate about what you mean by core modernisation. It could be retaining a level of the capability and doing a modernisation away from a mainframe into a more modern application stack but not doing a big bang replacement for a packaged technology, for example.”

Also in the ‘grounding forces’ category of trends from Deloitte is the move from DevOps to DevEx – or developer experience – a new focus Dalton says is emerging as local companies look to a developer-first mindset to improve software engineers’ day-to-day productivity and satisfaction.

“DevEx points to a future of integrated platform choices, intuitive toolchains, development pods and cultural shifts that together better enable both traditional and ‘citizen developers’ to drive tech value,” Deloitte says.

In New Zealand where talent for some specialist technologies and leading technologies continues to be constrained, Dalton says DevEx is particularly relevant.

“There’s a real focus on how you can really look after your developers and ensure you have got what is the core of technology delivery, happy and productive.”

And what about the more forward looking trends?

Deloitte calls out spatial computing and the industrial metaverse, Generative AI as a growth catalyst and a move ‘beyond brute force compute’ with pioneering businesses leveraging a heterogeneous mix of hybrid architectures, private and public clouds, hyperscale, niche and edge platforms to provide the increasingly sophisticated code and computing power required for deep learning, complex simulations and digital twins.

Dalton brings it down to the local level: In New Zealand the moves by hyperscalers to open local data centres will enable businesses to ‘think about things in a different way’, he says.

It’s not a game changer, but it is, he says, an opportunity to take advantage of something different, having hyperscalers in market – and not just with storage and compute, but with some of the other innovations which sit on top of the platforms.

And what of AI and its importance for A/NZ businesses?

“Should you be considering it, experimenting with it and understanding how to leverage it – absolutely.

“Should you be jumping in boots and all right now? I would say care needs to be taken because when you look at the typical tech hype cycle Gartner talk about it is right on the precipice of the trough of disillusionment.

“As I look across many technology alliance partners, everyone has a voice in the market place around this, and you need to have a voice, but cutting through what is real from what is talk is really important.”

He likens it to the early days of robotics process automation, when companies quickly discovered that their RPAs weren’t scalable and weren’t sustainable.

“Focusing on experimentation where enterprise-wide deployment is a possibility and you can actually get value from it is important because if you look at the cost of some of these investments now versus the value return, going all in is a risky proposition.

“Hype equals words not practical technical capabilities so just making sure you approach things in the right way is important.”

He says while many A/NZ companies are wrestling with the question of AI at a board and executive level, with a cohort going on to experiment, not many local organisations are going all in – something he notes is ‘probably ok’ because being at the bleeding edge can be very expensive and not necessarily value accretive.

But he cautions that even though companies may not be jumping into generative AI, staff most likely are already experimenting, and he’s urging companies to ensure they have enforceable policies in place to protect the business, while enabling experimentation.

He’s also urging companies to ensure their sights aren’t too fixed on AI.

“We’ve all got our eye on emerging technologies, but to ensure we can capitalise on the rapid technology evolution we’re experiencing, we need to spread our focus beyond one singular hero of the future – namely AI.

“It is not a silver bullet and it is the coming together of multiple technology capabilities to allow you to deliver something, that is really important. If you don’t create a technology environment that is an adaptable foundation for the future then you are not positioning your organisation in way that it going to allow it to be successful.”

One trend Dalton believes is flying below the radar across Australia and New Zealand is the issue of AI’s impact on cybersecurity.

“Many people are geared up to traditionally respond to cyberthreats, cyber breaches and you hear about the traditional ransomware attacks which have plagued a number of companies across A/NZ, but as AI gets smarter and the ability to impersonate gets a lot smarter, the ability to fool and drive a level cybercrime through that approach is something that I don’t think has been quite considered across Australia and New Zealand.

“You can impersonate voices and faces, so the old world mode of I can impersonate an email becomes the new world of I can impersonate someone’s voice.”

That throws up whole new areas of concern – consider the finance manager receiving a call from the CEO telling them to make a specific transaction.

“Technology is a great value enhancer when done right, but a cyber issue is reputationally huge to organisations.

“Organisations should be keeping quite informed and being very deliberate and thoughtful about where they choose to invest in new technology or experiment with technology such as GenAI, and ensure that they are also doing the third leg of the stool, which is to keep yourself safe.”

He says often organisations need some external challenge to allow them to confront those realities and make sure they are actually identifying these threats.

“That’s one thing that is absolutely encouraged. You don’t want cybersecurity to be a handbrake on innovation but being kept safe through the process is an incredibly important piece so staying informed and ensuring you have cyber safety baked into everything you do is a way to be able to progress without putting yourself at risk,” he says.

“Technology provides an enabler for tremendous value when done right. But done wrong it can be very expensive, not deliver what you are seeking, destroy value and really impede your organisations journey for the future.

“So you need to be very thoughtful with your efforts and don’t outsource your thoughtfulness to technology vendors. You want to experiment and prove it out and not do it in a scattered approach because you want to make sure the investments you are making are going to have a return and be scalable. And you want to ensure you keep safe throughout the process.

“It’s an exciting time to be in the technology industry, but let’s just make sure we approach things in the right way.”