How leading companies are thriving in the new reality
The digital agenda has long been recognized as critical. Now, it’s even more important than that.
Successfully executing digital transformation has become a matter of either prospering or struggling to survive as an organization. There is no longer a question of pursuing a digital agenda or not—rather, there is a growing divide between digital leaders and everyone else. KPMG research shows that digital leaders are twice as likely to be very effective at scaling innovation as their peers and three times better at providing positive customer and employee experiences. Surviving in the digital economy is about bridging this divide so as not to be left behind.
The COVID-19 pandemic accelerated what was an already occurring event, an era defining shift from an industrial economy to an information-centric one. The disruption to traditional market channels and ways of working has super-charged the significance of the digital agenda.
According to our recent study of IT leadership, companies that had already made meaningful investments in digital technologies such as cloud, automation, and artificial intelligence, are poised to accelerate those investments in the coming year. In contrast, companies that were in the early exploratory phases or had not yet started, are less likely to invest in the near term—their hands tied by limited capital, poor execution, or an inability to change rapidly enough.
In the new reality, the accelerated shift toward new technology-powered products and business models is set to become ever more pronounced. IDC predicts that by 2024, over 50% of IT spend will go towards digital transformation and innovation, up from 31% in 2018. Organizations will also look for greater efficiency in their budgets by shifting to less labor—and capital-intensive operating models, notably by leveraging cloud. KPMG research finds that nearly half (47%) of IT leaders believe COVID-19 has permanently accelerated the adoption of emerging technologies.
According to Steve Bates, Principal and global leader of the KPMG CIO Center of Excellence, "We are seeing an accelerated and widening gap between the "digital-haves" and the "digital-have nots." The result is a growing competitive chasm, between companies and across sectors, countries, and territories. Even more profound is the divide between the digital leaders and the rest of the pack, with our data showing that they are spending 25–50% more on technology than their competitors."
For more information, download the full report below.
- The widening digital divide (PDF/1.8MB)