Tech leaders say they’re lagging on technology progress
Business moves fast, which means innovation must move faster. Why are tech leaders worried they’re moving too slowly?
When it comes to technology progress and innovation, the tech industry expects more—of itself.
This is especially true of the technology, media, and telecommunications (TMT) sector, according to the leaders we contacted for our latest KPMG U.S. Technology Survey Report. Somewhat surprisingly, many of them told us they have a lot of work to do in several key areas, including artificial intelligence (AI), automation, and cloud solutions. In fact, many tech leaders reported that their progress in these areas is lagging that of other industries.
Granted, big tech companies are the undeniable leaders in developing and deploying cutting-edge technologies, so this fear-of-missing-out sense of concern likely reflects an industry with high standards and a very tough grading curve. There’s an expert-level appreciation for technology’s ever-growing potential, but that inherent expertise also comes with a greater awareness of untapped tech potential.
Still, our survey identifies several real barriers and tension points—and, more important, the opportunities that exist as a result. Here’s more about what we learned.
One possible explanation is that these companies, with a deep appreciation for technology’s ever-growing potential, are more keenly aware than others of the gap between current capabilities and the future that lies ahead.
Excerpt from the KPMG U.S. Technology Survey Report and technology, media, and telecommunications industry insights
A mixed report card
For this survey, we connected with 1,052 U.S.-based, executive-level technology leaders across eight industry sectors to learn about their organization’s digital transformation journey, the challenges they face, and their technology goals and investment plans.
For the TMT sector, despite the overall sentiment of “work to do,” there were a few bright spots, and especially on the bottom-line impact of transformational technologies.
Indeed, 52 percent of TMT tech leaders say they are making tangible progress on digital transformation initiatives versus 44 percent for all companies (the second-largest delta of any category in our survey). And 72 percent of TMT respondents report that they are very effective at using digital technologies to materially advance the business, compared to 66 percent overall.
Rather strikingly, though, TMT leaders see themselves trailing other sectors in four key areas, which present opportunities that will shape their tech strategies and investments going forward.
52%
The percentage of TMT leaders who say they are making progress on digital transformation initiatives.
Opportunity #1: Cloud, AI, and automation
More than half of TMT executives say they should be farther ahead on their cloud agendas, and just 28 percent say their organization is progressing quickly enough in AI and automation. And in one of our survey’s biggest stunners, 4 in 10 of the TMT tech leaders say a lack of executive buy-in or investment is limiting progress against their AI and automation agenda, compared to 19 percent at all companies.
It’s possible, of course, that expectations are simply greater here than with other industries, or they reflect the sector’s relative maturity in these areas. But then it’s equally plausible these leaders are raising a red flag the industry cannot afford to ignore: Is complacency catching up?
Opportunity #2: Emerging technologies
The opportunities that emerging technologies present for TMT companies are virtually limitless, yet only 2 percent of leaders say their company is progressing proactively. Unlike in other industries, many companies in this sector have an opportunity to compete both horizontally and vertically: internally to drive agility and efficiency, and externally in products and services to drive top-line growth.
But one of the biggest barriers is an unwillingness to leverage new game-changing technologies from perceived competitors—especially among leading companies. This may mean a greater focus on partnering with or acquiring start-ups to build and own capabilities, rather than buying from a competitor.
Opportunity #3: Data management
Moving forward, TMT leaders say it will be crucial to build connective tissue between their data models and data orchestration infrastructure to generate insights that can drive both value creation and value preservation.
This gap between what models can do, in theory, and what they are actually doing with the data they are getting is a big opportunity for TMT overall. As one example, from one large business-to-consumer company, KPMG teams observed 15,000 machine learning models being used in various customer- and user-targeting applications, yet only 5 percent were leveraging a common data model that would have allowed them to identify valuable opportunities from end-to-end.
Opportunity #4: Metaverse
The looming opportunity presented by the metaverse is, for this sector, extraordinarily rich. KPMG foresees a continuous evolution toward a metaverse that in very short order will no longer be limited primarily to gamers, but rather will include consumer and business users of all stripes. And, indeed, 68 percent of TMT executives say their company will invest in the metaverse over the next two years versus 57 percent of all organizations.
Opportunities ahead
Call it what you will: Tough grading, budget positioning, or just an acute case of leading-edge angst from TMT companies. But it’s instructive that the very sector that many would expect to be fully confident about harnessing the power of advanced technology is also the sector that feels like it’s falling behind.
Based on our work with clients across a wide range of industries, though, we firmly believe that TMT companies remain uniquely positioned to propel their businesses with transformative new technologies. Yes, TMT tech leaders will need to double-down on investment cases and buy-in from the C-suite. But most TMT companies today are able to innovate from a position of strength, with huge first-mover advantages like extraordinary digital expertise and exceptional access to data. With the right digital strategy, the opportunities are almost limitless.
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