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      KPMG’s latest Pulse survey of private enterprises shows us that business leaders remain intent on unlocking growth and realising value. Two thirds are planning to diversify their business by launching new products and services or entering new markets; a fifth have M&A on the agenda.

      This ambition comes despite a tough operating environment: a low-growth economy, elevated costs, volatile geopolitics, supply chain disruptions, political uncertainty at home… the list goes on. Resilience has become the new standard.

      It’s clear to me – and reinforced every week in the conversations I have with clients – that the UK’s mid-market leaders know they simply need to get on with managing their own businesses, whatever the economic or political weather. There is no time for sitting passively on the sidelines waiting for better conditions to come along.

      Simon Albrighton
      Simon Albrighton

      Partner, Head of Sectors Consulting

      KPMG in the UK

      Transforming through technology

      In particular, leaders have accepted that they need to transform through technology. That means digitisation, better data management, cloud migration, stronger cybersecurity and, increasingly, the deployment of AI. Again, the Pulse survey reflects this back to us very clearly: for two-thirds of private enterprise leaders, technology sits at the top of investment priorities.

      Bringing about tech transformation is not easy, especially when you are simultaneously managing your business in difficult conditions. Most private enterprises are still in the relatively early stages of the journey: it’s something they are trying to do, rather than something that’s complete.

      But the survey shows us – and direct experience tells us – that leaders are determined to make real headway in the transition.

      Tech in the hands of people

      There is a crucial element that sits alongside any tech transformation – and that’s people. The survey underlines that technology and workforce are fundamentally linked. People and skills have risen as the second highest investment priority, significantly up on our last wave of research six months ago (37%, up from 25%). This reflects that it’s technology combined with people that makes the difference. There’s a reason, for example, why Microsoft called their AI solution Copilot not Autopilot!

      When the right tech tools are in the hands of trained and fully equipped people, that’s where the magic happens. Businesses have understood that they need to invest in workforce to achieve return on investment in technology. This investment could take many forms – training, upskilling, re-tasking. It’s more likely to mean that than an increase in recruitment and overall headcount.

      Using the new electricity

      It’s worth thinking for a moment of AI as a new electricity. Are you going to use that electricity to do the same things you did before but a little bit faster and more efficiently? Or are you going to use it to actually do things differently?

      The real offer of AI is to reimagine your business. That means different ways of working, different process flows, different tasks. Using AI effectively means people can be freed up to focus on more strategic areas. So the key question becomes: what will those areas be and how will this be managed?

      With the cost of AI rising (per token costs have increased significantly in the latest models), it is also key to make sure you are using it in the right places for the most value-returning tasks. You wouldn’t want to use your new electricity vacuuming the canteen for example.

      Governance over how AI is used and how spend is allocated – for what tasks, by whom, with what checks and balances – is therefore critical.

      Re-engineering the business

      Perhaps the time is coming for businesses to have a Chief Resources Officer who takes strategic responsibility for both human and digital resources? Digital labour will become a bigger and bigger part of most businesses.

      That may be taking it an extreme, but the principle is clear: the future with AI will be different, so some degree of re-engineering is needed.

      My advice to private enterprises is: don’t avoid AI. Explore it, pilot it, deploy it in specific areas. Test and learn, keep an open mind. Most of all, though, see it as a tool that comes alive when your people use it. So, support your teams – get them involved and equip them with the skills and knowledge they need. That’s when your transformation efforts will really start to bear fruit.

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