CEOs are keeping technology risk front of mind and worldwide, disruptive technology has emerged as a significant threat to organisational growth over the next 3 years.
When we look at what’s keeping CEOs concerned in the next 6 months, despite economic challenges such as rising interest rates and inflation, CEOs continue to prioritise digital investment — with 76 percent of CEOs in ROI and 80 percent in NI (71 percent worldwide) saying they have an aggressive digital investment strategy, intended to be the basis for their business model transformations.
For CEOs in NI, advancing digitalisation and connectivity across the business is the top operational priority for achieving growth over the next 3 years and is tied in second place as a priority for their counterparts in ROI. KPMG’s Dublin-based Consulting Partner Owen Lewis says this focus on digital transformation is driven by a combination of factors but “is primarily led by a belief that the competitive advantage gained by getting it right on technology is a game changer - especially in fast-moving sectors where consumer-focused tech solutions can be the difference between success and failure.”
Digital at Fujitsu
At Fujitsu Limited, President and CEO Takahito Tokita is on a mission to transform the organisation from a traditional IT company into a purpose-driven digital experience organisation. “We have always been confident in our technology and innovations but in our conversations with clients, we realised they needed more than just products — they needed integrated, value-adding capabilities to help advance their own digital transformations. I said that we would change from an IT to a digital experience company to meet that demand and reflect a sense of urgency that we are not going to be a company that just follows old traditions.”
CEOs with an aggressive digital investment strategy
Pausing for thought?
Given the concerns about recession noted especially by our global respondents, there is evidence that many organisations worldwide are reconsidering their strategies.
Four in five global CEOs note that their businesses are pausing or reducing their digital transformation strategies to prepare for possible recession (40 percent have already paused or reduced activity, and 37 percent plan to pause or reduce activity over the next 6 months). However, in contrast in Ireland, there is somewhat less pessimism with only 20 percent (ROI) and 16 percent (NI) planning a similar approach.
Technology and talent
In fact, 70 percent of global CEOs (64 percent in ROI and 64 percent in NI) say they need to be quicker to shift investment to digital opportunities and divest in those areas where they face digital obsolescence. Digital transformation has become more expensive in recent years, so more than ever, investment should be prioritised in those areas that help drive growth — and potentially slowed or reconsidered on efforts that may be considered non-critical. In uncertain times, it’s imperative businesses focus their digital investments on impactful, and measurable, value-creation opportunities most able to support their strategic goals.
On a global basis, CEOs continue to narrow the gap between their digital transformation objectives and investing in their workforce. CEOs were offered a binary choice in our report: whether they were investing more in placing more capital investment in new technology (56 percent) or developing their workforce’s skills and capabilities (44 percent).
This gap has narrowed from 2021, when 60 percent prioritised technology investment over workforce-related investments (40 percent). As businesses have implemented their digital tools, their attention has shifted to adoption, engagement and change management in order to support their people working in a very different world. To drive their growth, CEOs may be looking to make their existing people more productive through transformation.
Building successful partnerships
Few organisations can succeed on their own. Businesses rely on their ecosystems, as building successful partnerships can help a company deliver a competitive edge.
Increasingly and on a worldwide basis, CEOs view partnerships as an important means to continue the pace of their digital transformation (71 percent, compared to 59 percent in February 2022). CEOs also say that building strategic alliances with third parties is the most important strategy to help them reach their growth objectives over the next 3 years. It has become more important for businesses to partner with companies (e.g. start-ups, fintechs) that can help them bring agility and resilience to growth.
To bring everything together and drive a successful transformation, CEOs need the right partners — and the ability to connect it all.
Cyber as a strategic function
While cyber security risks haven’t remained a top concern for global CEOs, the cyber environment is evolving quickly, and worldwide 77 percent see information security as both a strategic function and a potential competitive advantage.
Such sentiment is echoed even more strongly in NI where over 9 in 10 (92 percent) share similar views reducing somewhat in ROI (72 percent). Geopolitical uncertainty is also increasing concerns about corporate cyber attacks for many CEOs worldwide (73 percent) compared to previous years (61 percent in 2021). In fact, three out of four global CEOs (76 percent) say that protecting their partner ecosystem and supply chain is just as important as building their own organisation’s cyber defences.
Preparation for cyber-attacks
Geopolitical uncertainty may have also heightened awareness around cyber security concerns, giving CEOs a clearer picture of how prepared — or underprepared — they may be. More CEOs worldwide recognise they’re underprepared for a cyber-attack, with 24 percent admitting so in 2022, compared to 13 percent in 2021.
Dani Michaux, KPMG’s EMA Cyber Lead and Head of Cyber Security in Ireland says “Think about your broader supply chain risks. The increasing interdependence of businesses and government have led to an increase in supply-chain attacks. In the new digitalised and interconnected world, they are becoming more prominent and more disruptive. Frequent attacks raise concerns around an organisation’s ability to remain resilient and trusted by shareholders and customers cyber resilience will be a key foundational pillar of the digital trust future.”
This exponential increase in cyber attacks, coupled with the difficulty of detecting attacks on time, calls for automation and innovation in dealing with cyber incidents. Alexis George, CEO of AMP, acknowledges that cyber security risk is increasing as AMP grows its digital capabilities. “Cybersecurity is absolutely one of the biggest risks for our industry as we face the future. We manage our risks well, but like any organisation, our data is a target. Privacy breaches and scams are threats, and cybercriminals are increasingly sophisticated, but that is the nature of the digital financial landscape. We must continue to adapt, prepare and respond.”
CEOs who see information security as a potential competitive advantage
Growth strategies in turbulent times
Growth strategies in turbulent times