What sets top-performing Australian companies apart and how a cloud-native, API-first approach can help.

11 factors differentiate the top 20% of Australian companies from the remaining 80%
How a cloud native and Application Programming Interface (API) -first approach helps top-performing companies
4 steps to shift from legacy platforms to smaller, modular apps connected via APIs

Ever wonder what leading companies do differently? PwC surveyed more than 3,000 business leaders globally, including 464 in Australia, to find out. We focused on their transformation priorities. What are they prioritising? And what benefits can be gained from an enterprise-wide investment into transformation, as ‘business as usual’?

PwC’s Accelerating Performance research reveals 11 factors differentiating the top 20% of Australian companies from the remaining 80%. We found that these 11 factors enable dramatic performance premiums — and taking an integrative approach to all of them helps leading companies generate outsized advantage.

Our research found that top-performing companies:

Seek the value upside in business ecosystems by using new business models.

Upgrade their operating models through managed services partnerships and technology.
Keep transforming by investing in opportunities and threats as they emerge.

Companies in the top 20% gain super-sized rewards, achieving more than 4.6 times the performance premium — the combined effect of profit margin and revenue growth, adjusted for industry — relative to the bottom 80% of businesses.

Cloud native and API first: a deep dive

Among these 11 factors, the top 20% of companies have transitioned to a cloud native approach and follow an API-first strategy.

It can be challenging to upgrade from legacy systems, especially if those platforms are core to the way a company functions. But the data is clear: top performers are 1.2 times more likely to have made those upgrades and shifted from ‘monolithic’ legacy platforms to smaller, modular apps connected via APIs.

What’s more, Australia’s top-tier companies are outperforming their international counterparts when it comes to connecting internal systems through APIs (92% versus 84%). They’re gaining a competitive advantage as a result:

Better digital experiences for customers, supported by improved digital experiences for employees.
Better use of AI, data science, and advanced analytics for improved decision making.
More streamlined connections with external and ecosystem partners.

So, how to shift from legacy platforms to a cloud native, API first approach?

1. Set up micro-services

Moving from a legacy system (that is, anything built using old architectural principles) to an agile API-based, cloud native system requires breaking up functions into stand-alone ‘micro-services’.

Developers can achieve a strong level of modularity by dividing an application into smaller, self-contained services. Each microservice can be independently developed and maintained, enabling teams to work on different services concurrently. This modular approach also facilitates simpler testing, deployment, and scalability, as modifications to one microservice do not impact the entire system.

To achieve this is no mean feat. Organisations need a deep understanding of the business functions to work out the best combination of tech to meet their needs. The closer a legacy platform is to the core business, the harder it can be to change.

2. Embrace a standardised approach

Leading companies are ‘letting go’ of what may have previously been regarded as core intellectual property. They are instead adopting standardised processes in some areas to increase agility inside and outside of their organisation. In this way, cloud apps and APIs are like building blocks — standardised components that businesses can configure in a way that best suits their unique capabilities (i.e. coming up with their own innovative designs).

3. Build in cybersecurity from the start

Using cloud-based apps and APIs can introduce additional risk from a cyber perspective and it is imperative that companies have robust third party risk management programs in place. Digital leaders embed cybersecurity and data privacy into their processes when engaging with third parties and implementing new technologies. This not only allows them to maintain a ‘secure by design’ operating model, but serves to reduce cost and complexity from having to remediate cyber security issues down the track.

4. Reskill and bring people along on the cloud journey

Cloud transformation and effective cybersecurity also require rethinking the people strategy. To rise to the challenge of reskilling existing workers, as well as securing new talent for tech delivery, the best-performing companies include employees as part of the broader strategic change. Of course, not every company can hire and retain all the specialised talent it needs. Those who can’t, often look to managed services partners to bridge the gap. Leading Australian companies are, in fact,1.2x more likely to turn to managed services partners to gain access to talent and expertise.

To start a conversation or to find out more on Accelerating Performance, see https://www.pwc.com.au/consulting/accelerating-performance.html

_{About the research

PwC surveyed 464 respondents in Australia at director level or above with anonymised responses, in November 2022, from the following industries: consumer markets; financial services; technology, media and telecommunications; industrial, manufacturing and automotive.}