“Continuous Reinvention”: Why Tech Leaders Are Caught in a Never-Ending Digital Transformation

According to KPMG, less than a third of business leaders believe their level of technology readiness is very high, even though a majority believe advanced technologies are essential to drive digital transformation.

In a new report, KPMG said three-quarters of senior executives believe generative AI, neural networks and digital twins will significantly increase their chances of transformation success.

These transformation efforts are happening at scale, with nearly nine in 10 large companies working on at least two transformation programs at the same time, the report notes, and more than half running three.

But companies’ approaches to digital transformation are changing, the report says.

Tash Moore, global transformation leader at KPMG International, said digital transformation is no longer seen as a one-off activity, but rather a perpetual process of upgrades after upgrades.

The rapid evolution of the global technology landscape, combined with the emergence of new technologies, means that technology leaders must continually evolve.

“Transformation is no longer a periodic initiative but an ongoing journey. Our research highlights the importance of trust in leadership and the strategic use of partnerships to navigate this complex landscape,” Moore said.

“Companies that effectively integrate the adoption of advanced technologies with strong leadership and good judgment are well positioned to thrive.”

According to KPMG, the top five barriers limiting digital transformation are lack of resources, skills or expertise, stakeholder resistance to change, stakeholder and employee resistance, competing business objectives, and lack of funds or an unclear business case.

Successful companies tend to have a resilient culture of trust, shared values and alignment with the company’s strategic vision, with 73% of digitally mature companies having high levels of trust in their leaders.

However, KPMG warns that many companies are not making the most of their data, technology and people. Two-thirds of executives believe their technology foundations are no more than adequate, while most expect the impact of technology on transformation to increase in the next one to three years.

At the same time, leading companies are leveraging partnerships to accelerate their go-to-market strategies, overcome supply chain challenges, and advance their technology capabilities – even though only a third of executives believe their current partner ecosystem is strongly aligned with their transformation goals.

About 60% of senior executives and operational managers believe that adopting advanced technologies will increase the chances of transformation success.

Similarly, nearly half of digitally mature organizations plan to spend up to $25 million to support their transformation efforts, while 46% of their digitally immature counterparts are only willing to spend $1 million for the same goals.

Successful digital transformation requires a long-term vision

KPMG has advised organisations to ensure they see the big picture when embarking on transformation projects.

This includes strengthening digital culture and technology infrastructure, fostering a resilient organizational culture, aligning their transformation and ecosystem strategy, and adopting AI across the enterprise.

“We are at a real inflection point in the digital revolution,” Moore said.

“Businesses can leverage this to create and unlock more value and gain competitive advantage, including by being deliberate about how digital and data are used, managing risk, and driving product and service innovation.”