KPMG Global tech report 2023

• The appetite for leadership to embrace emerging tech has more than tripled from 10 percent to 38 percent in the last year.
• AI considered the most important technology for achieving short-term ambitions.
• 72 percent of digital leaders recorded improvements in employee productivity, a huge uplift attributed to digital transformation.
• Advancing ESG priorities remains the primary innovation goal for technology functions across the world.
• Customer experience and cyber continue to be a significant driver for technology innovation and digital investment.
• Economic turbulence means 67 percent claim they are expected to deliver more with a smaller budget.
• Lack of coordination across technology functions cited as the main obstacle to transformation progress..

KPMG International published its KPMG global tech report 2023, that explores the technology strategies employed by organizations across the globe as they embark on the next stage of their digital transformation journeys. It also examines the opportunity presented by emerging technology to drive value and gain a competitive edge during a sustained period of unprecedented market volatility.

According to the new report in which more than 2,100 technology executives were surveyed and a series of in-depth discussions conducted, digital transformation leaders committed to their innovation priorities, continue to realize value at pace.

The largest group of respondents see technology investment driving profit or performance improvements of more than 10 percent, up from last year’s most common rate of improvement of around 2.5 percent. Buy-in across leadership for the deployment of emerging tools and technologies has more than tripled with the top three areas of investment being artificial intelligence, data and analytics and XaaS (“everything as a service”)

Organizations that perform strongly on security will secure competitive advantage: 63% of the organizations in KPMG research said that improving cybersecurity and privacy helps them to provide a loyalty winning customer experience.

“Enhancing resilience and trust through cyber is nowadays one of the top goals for technology functions”, said Gabriel Tănase, Cyber Partner for KPMG in Romania. “Organizations should automate, streamline and embed security into the core of the business and overall integrate “security by default” in all processes for the benefit of both the company itself and its customers” he concludes.

The report shows that ‘security by design’ is becoming an embedded principle in technology implementation: 62 percent of businesses have discovered that managing risk in the early stages of projects, with security and control by design, significantly increases the success rates of transformation programs.

Among those leading businesses where investment in technology is driving confidence and profitability most quickly, AI and machine learning are even bigger priorities. More than two thirds (68 percent) say these technologies will be vital in helping them to achieve their short-term business goals, compared with 57 percent of the total sample.

But it’s not all plain sailing, the biggest threat to many organizations digital transformation ambition is linked to poor collaboration across teams - often a result of negative work culture and poor communication. Nine in ten respondents think collaboration with the wider business would be stronger if their tech function was more diverse.

One key result of our survey showed that 55% of the organizations say progress toward automation and instruction of AI have been delayed because of the concerns about how AI systems make (and in a not so far future take) decisions.

“Introduction of AI raises significant and legitimate concerns, notes Gheorghe Vlad, Director for Cyber services provided by KPMG in Romania. “While there is still a gap and a need for more regulations in the area, organizations will need to put together policies and procedures on their own, that will help them and their users to understand both the risks and challenges of AI systems as well as the benefits that come with these disruptive technologies” he continues.

This year, 96 percent of the leaders say their technology function can help the enterprise to confidently explore the potential of emerging technologies, compared with 81 percent of businesses overall. Two-thirds of these leaders have reached at least the implementation stage on projects connected to emerging technologies, XaaS, data and analytics and AI and automation, compared with less than half of the total respondent base.

With 72 percent of digital leaders recording improvements in employee productivity from digital transformation, compared with only 48 percent of the other businesses the potential benefits are huge. 71 percent say they have enhanced customer engagement, compared with 49 percent.

Today’s challenging times demand innovation tied to clear business outcomes, carefully monitored for bottom-line returns. Opportunities exist for agile businesses that are able to adjust at speed and respond to internal drivers as well as the changing environment around them to optimize outcomes and achieve a competitive advantage.

For more information, visit our website: kpmg.com/techreport2023