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Companies have come to terms with digitization, but they are still waiting for truly revolutionary changes

Digital Transformation 2023
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Despite unprecedented market fluctuations, technology leaders around the world are confident that the technology will live up to expectations. THE KPMG Global Tech Report 2022 In its research, almost all technology leaders reported that digital development has contributed to increased performance and profitability in the past two years. Despite the rapid growth and openness to emerging technologies, the survey of more than 2,200 technology executives and industry experts also points out that there are still factors hindering further development, such as the lack of competence in technological fields or the increasing cyber security challenges. Overall, however, companies continue to approach emerging technologies with enthusiasm, commitment and confidence.

Digital transformation brings the expected results, the main driver of which is increasing the customer experience

Over the past few years, senior executives have experienced the successes of digital transformation and remain optimistic about future opportunities. Almost all respondents mentioned that the digital transformation of their organization in the past two years had improved effectiveness and performance: nearly 60% from more than 5% growth report thanks to this.

Among other things, the KPMG Global Tech Report 2022 research highlights that one of the most important drivers of digital transformation is improving the customer experience. Customer focus means designing and implementing effective processes, products and services that best serve the needs of customers. Companies assign a key role to corporate technology in their strategic plans to enhance the customer experience. Since customer relations require the cooperation of several areas, if the front-, middle-, and back-office areas do not work in coordination, it leads to overly complicated and slow processes.

The respondents According to 62 percent, there is still work to be done in terms of breaking down the silo-like operation. By technologically redesigning the company and breaking down barriers between departments, companies can contribute to improving the customer experience. Those companies that are committed to creating unhindered cooperation and breaking down the boundaries between organizations stand out from the rest.

Companies are counting on emerging technologies such as metaverse, but the majority have not yet made concrete investments

Respondents recognized the potential of emerging technologies and are working to lay the groundwork. 46 percent of those surveyed plan to invest in new technologies in the future, but the majority of them have not yet, or have only made little progress.

In relation to the metaverse, even the digitally advanced companies have admitted that for the time being they are either waiting for their competitors or for the demands of their customers before they themselves invest in the development of products or services based on such technology. Compared to other industries the financial services market shows the greatest demand for investments in the metaverse next year. The energy and chemical industries show the least interest in the concept.

The introduction of cloud-based technologies is no longer a hallmark of digitally leading companies, but IT is an evolutionary stepping stone

The KPMG survey shows that the transition to the cloud is already well underway. The widespread trust is indicated by the respondents According to 88 percent, their company is already in an advanced state with the introduction of technology. 80 percent of respondents are satisfied with the results achieved so far thanks to the transition to the cloud. According to 35 percent of respondents, the main advantage of such solutions is that they are cheaper than in-house operated systems and than maintaining your own IT infrastructure. 33 percent of the respondents see the increase in efficiency as the biggest advantage.

An inflexible organizational culture and a lack of qualified professionals are the two biggest challenges of digital transformation

According to KPMG research, the biggest challenge that companies face when implementing digital technologies is the lack of professionals. This is most noticeable in the healthcare sector (52 percent) and the manufacturing sector (48 percent).

Companies are increasingly in need of employees who have both business acumen and digital skills. According to most respondents, it is a serious challenge to find applicants who, on the one hand, understand business processes and, on the other hand, have the in-depth technical knowledge required to introduce new digital solutions. The limited budget available for employee training and recruitment further exacerbates this situation, and experience has shown that this affects the entire organization. All of this makes it difficult to introduce new systems, to move towards cloud-based solutions, and also hinders information security initiatives.

Digital innovation is also threatened by an organizational culture resistant to change. A risk-averse corporate attitude is one of the biggest challenges of the digital transition, and the responders It hinders digital initiatives for 24 percent.

“These two areas are a good example of how, despite the available know-how, successful pilot projects and an abundance of resources, the digitalization of an area can fall behind just because of the shortcomings on the human side,” points out Zsanett Tillinkó, KPMG’s Technology and Director of its project consulting area.

The lack of skilled labor is also felt in the area of ​​cyber security

Increasing threats put cyber security teams under constant pressure, while a shortage of professionals often hampers security efforts. According to companies, the lack of key capabilities is the main obstacle to achieving their cyber security goals. The respondents 58 percent admit that their company is behind schedule – this may also indicate the ever-increasing responsibilities of cyber security teams.

The digitization of customer contact channels is the second biggest cyber security challenge, after the introduction of hybrid working, that companies face today. In the absence of adequate protection, more and more vulnerable points may appear in the system, potentially putting customer relations at risk. According to KMPG’s 2022 cyber security research (Mission: Trust. How to unlock the true value of the CISO), data protection concerns are the most likely to undermine customers’ trust in the company and its data management. In order for the introduction of technological innovations to increase customers’ trust and loyalty to the company, cyber security requirements must be incorporated into the new systems during projects already at the time of planning.

According to the survey, despite the mentioned problems, the respondents have confidence in their own cyber security capabilities. More than 50 percent of them say it very confidentlythat your company is prepared against cyber security threats.

Seven defining signs of digital maturity

According to KPMG research, the majority of technology leaders now believe that digital transformation initiatives implemented to increase their competitiveness will pay off. In the last two years, either their profitability or 2 other metrics have increased as a result of the digital transition. Thus, the confidence invested in the effectiveness of digital transformation reached a record high level, and the transition itself became a basic requirement.

The research lists seven important factors of digital maturity. These are the following:

  • It is inevitable to break down the silo-like operation and establish communication between the areas
  • Companies must find proactive solutions to the problem of a shortage of professionals, broaden their search base, and be open to applicants with a variety of backgrounds and experiences.
  • Close cooperation between various business areas involved in the introduction of the cloud and IT is necessary in order to create uniform, cost-effective cloud-based solutions at the company level
  • Cyber ​​security professionals should be involved from the start in technology decisions and building IT security awareness within the company
  • When introducing new technologies, the focus should be on those that most promote the growth of customer satisfaction
  • For the sake of customer satisfaction, you must be able to switch between platform providers
  • You have to dare to experiment and accept a certain degree of uncertainty

Digital transformation makes companies crisis-proof

The victory achieved in the field of digital transformation makes companies confident in the face of the uncertainties and challenges experienced today. The results achieved and the increase in performance made customer-oriented technological strategies almost a means of “survival”. KPMG plans to examine the behaviors that show digital maturity observed in the Global Tech Report 2022 survey in detail later in a new research.

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Digital Transformation 2023

Whoever misses out, misses out! The subject of artificial intelligence will be a priority at our Digital Transformation conference on May 3rd. Registration and details here!

Cover image source: Getty Images