Digital transformation in uncertainty

In the KPMG 2022 CEO Outlook report, disruptive technology was ranked the top risk and greatest threat to organisational growth over the next three years. And while pandemic fatigue and economic factors, like rising interest rates and inflation, remain a key concern for the next six months, emerging and disruptive technology is a close third — similar to the concerns of CEOs in Singapore.

In the face of these risks, Singapore CEOs continue to prioritise digital investment. Three in five (60%) say they have an aggressive digital investment strategy in place to secure first-mover or fast-follower status. About 48% believe driving digital transformation at a rapid pace will be critical in competing for talent and customers. 

The looming recession may be pushing businesses to reconsider their strategies over the short term. Close to four out of five CEOs (76%) in Singapore note that their businesses are pausing or reducing their digital transformation strategies to prepare for the anticipated recession. Meanwhile, more than half (56%) say they need to be quicker in shifting investment to digital opportunities and divesting in areas of digital obsolescence.

Digital transformation has become more expensive in recent years, so investment should be prioritised in areas that help drive growth — and potentially slowed or reconsidered for efforts that may be deemed non-critical. In uncertain times, it’s imperative that businesses focus their digital investments on impactful, and measurable, value creation opportunities most able to support their strategic goals.

CEOs globally continue to narrow the gap between digital transformation objectives and investments in their workforce. The gap between CEOs who are pumping more capital into new technology (56%) and those who are developing workforce skills and capabilities (44%) has narrowed from 2021, when 60% prioritised technology investment over workforce-related investments (40%).

Businesses have shifted their attention to tech adoption, engagement and change management among their people to support a vastly different world of work. To drive their growth, CEOs may be exploring ways to increase their people's productivity through transformation.

Increasingly, CEOs view partnerships as an important means to continue the pace of their digital transformation (71% globally, 56% locally). CEOs also see building strategic alliances with third parties as an important strategy to help them reach their growth objectives over the next three years.

Many are finding it more useful to partner with the likes of start-ups and fintechs to bring agility and resilience to growth. To bring the business together and drive successful transformation, CEOs need the right partners and the ability to connect it all.

The cyber environment is evolving quickly, and so are business leaders' focus on cyber capabilities. In our survey, 60% of Singapore CEOs see information security as a strategic function and a potential competitive advantage. Geopolitical uncertainty is also fuelling concern over corporate cyber attacks among many CEOs globally (73%), up from 61% in 2021. 

Singapore CEOs are more confident in their cyber defences this year than their global counterparts, with 72% saying they are prepared for a cyber attack. More than three-quarters (76%) say their organisation has a plan to deal with a ransomware attack.

The rapid increase in cyber attacks, coupled with the increasing difficulty of detecting attacks on time, calls for automation and innovation in dealing with cyber incidents.