How tech-first strategies are creating new opportunities
Business leaders say tech is the most dependable catalyst for driving growth, profitability, and trust today. Here’s why.
For many companies today, faced with an unending array of pressures, technology innovation is the consistent strength that has helped them navigate uncertain times while preparing for whatever turbulence lies ahead.
In fact, tech-first enterprise initiatives are starting to generate real results, as we detail in our 2023 KPMG US Technology Survey Report, which is based on data from 400 enterprise technology leaders.
The report, which also includes analyses and perspectives from industry and KPMG thought leaders, demonstrates how tightly focused digital acceleration and investments are enabling businesses to capitalize on technology’s promise, even as they navigate economic, geopolitical, regulatory, and customer volatility.
The research also reveals confidence about the value technology can deliver. In a time of unceasing headwinds, here’s why many business leaders believe that tech is the strongest port in the storm—the go-to engine of growth, profitability, and trust—as well as their playbook for the year ahead.
Tech ascendant
Technology is ubiquitous—its possibilities endless. Using it as a business enabler is a crucial competitive challenge, but doing it effectively is how companies are winning.
Against this backdrop, digital effectiveness is strong today, as measured by the outcomes versus expectations 24 months after deployment:
Today, technology underpins and enables the end-to-end operations for most businesses. Tomorrow, it will unlock a seemingly endless realm of capabilities, opportunities, and possibilities. Despite market challenges, there’s little hesitation on the part of technology leaders to use emerging tools to advance their business strategies. An impressive 32 percent have full leadership buy-in, compared to just 10 percent a year ago.
That said, when economic headwinds are tightening budgets, not every project enters the pipeline. Indeed, 65 percent of technology leaders say they’re expected to do more with less budget compared to last year.
If ROI is the guiding light for placing technology bets, it’s shining brightest on artificial intelligence (AI). AI and machine learning—which includes fast-advancing and highly disruptive generative AI tools—is seen as the most important technology for achieving short-term ambitions over the next three years, according to 52 percent of respondents.
The top three benefits of AI for businesses cited by our survey respondents: enhanced customer engagement, increased employee productivity, and new business development.
On average, 56 percent of respondents say returns on their digital transformation investments exceeded expectations, and 45 percent say they improved profitability or performance in some way.
Findings from the 2023 KPMG U.S. Technology Survey Report.
In transformation we trust
We know digitization is rampant across businesses. But what specifically propels companies to transform with technology?
The answer is clear: There’s no better way to build and maintain digital trust. Digital trust is the expectation that digital technologies and services, and the organizations providing them, will provide safe and secure interactions for stakeholders—from customers, to suppliers, to communities.
The need for digital trust is the common linking factor across the top three main triggers of digital transformation selected by the survey respondents: security concerns and regulatory obligations (56 percent), converting prospects into customers (53 percent), and upselling and cross-selling optimization to boost spend volumes (53 percent).
As digital tools play an increasingly large role in stakeholder interactions, enterprise leaders recognize that secure, compliant businesses are much more effective at building and maintaining trusted relationships with their stakeholders. In fact, two-thirds of respondents say that improving cybersecurity and privacy helps them provide a loyalty-winning customer experience.
Still, transformation isn’t a slam dunk. Success hinges on how technology leaders address collaboration, talent, and cultural weaknesses across the organization. Organizational bottlenecks are even greater transformation hurdles than technical ones. The evidence:
47%
Leaders who say their technology function lacks the governance and coordination it needs to effectively support transformation initiatives.
61%
Respondents who think the technology function needs to get better at helping the board understand the potential of new emerging technologies.
68%
Organizations that percent still struggle with executive buy-in, which is essential to inspiring change and unlocking investment.
Strategic integration fuels acceleration
Business strategy and technology strategy are no longer distinct. How organizations win today is almost always underpinned by technology investment.
In addition, leaders are determined to derive return on their investments. Doing so means prioritizing trust, collaboration, and agility. They should:
1
Squeeze more from their stack
Survey respondents are clear that they will be doing more with less next year, partly due to lack of confidence in the markets. Rather than battening down the hatches, they hope to get more from the investments they’ve already made. In fact, most respondents say they can realize their digital aspirations with their current technology stack.
2
Marry customer experience with trust
Cybersecurity and customer experience are the primary drivers of digital transformation. Businesses cannot create and maintain long-term customer relationships without trusted solutions. Ensuring data is secure and people have control over how it’s used is the new guiding light.
3
Expand data beyond the scientists
The bigger the investment, the harder it is to manage the data. Leaders plan to harness the horsepower of more of the organization’s talent, and that starts with a rigorous assessment of data and analytics use cases. This will help data scientists and engineers deliver more bang for their buck while democratizing the set of outcomes for more of the business.
4
Revisit AI foundations and strategy
Generative AI is one of the most exciting technology developments in recent history, but it’s evolving faster than it can be implemented. Leaders must step back and carefully consider how it fits into their strategy and what foundational technical and policy changes are required to deploy it.
5
Improve coordination and agility with better governance
Companies not seeing consistent returns on their digital investments are now in the minority. The most likely reason is a failure in governance. Knocking down barriers to collaboration—the biggest hurdle for transformation progress—will be critical to enterprises delivering for enterprises to deliver better outcomes, faster, and with fewer resources.
The tech train is leaving the station
One thing that was abundantly clear from our survey: Digital transformation is too important an opportunity to miss. As technology reshapes businesses and societies, it sheds light on how intentionality—focused efforts aligned with strategic ambitions—can propel businesses toward their growth and resilience goals, now and in the future.
2023 KPMG US Technology Survey Report
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