Benefits and Challenges of Adopting Transformational Technologies

Companies across virtually every sector are positioning themselves to outpace their competition by implementing innovative, technology-based business models. Against this backdrop, respondents to KPMG’s 2019 Technology Industry Innovation Survey again ranked Internet of Things (IoT) as the top driver of business transformation and long-term value over the next three years.

The fact that IoT reigns again should come as no surprise, given how broad and far reaching the category is. From wearable health monitors to connected homes and cites, everything feels “smart” these days and is interwoven with a myriad of devices and applications. In fact, International Data Corporation (IDC) forecasts that global IoT spending will reach $745 billion this year and a whopping $1.2 trillion in 2022. 

Robotic process automation (RPA) and blockchain rising

We compared the results from 2018 to 2019 (see chart below), showing that RPA and blockchain rose the most rapidly to help organizations improve their performance. Having RPA as the biggest mover in KPMG’s survey may mean that companies want to ease their way onto the spectrum of artificial intelligence (AI).  

Blockchain’s rise into the top four aligns with recently released KPMG findings showing that 41 percent of tech industry leaders surveyed expect to implement blockchain over the next three years, with nearly half saying it will change the way their company does business. 

This increased pace of change means it is more important than ever for tech leaders to make strategic, long-term investments in innovation, and pay close attention to the impact new technologies are having on the business model and labor dynamics.

Key benefits and challenges

Regardless of the individual technology, tech leaders most frequently cited “improved business efficiencies” and “increased profitability” as the top benefits for companies adopting transformational technologies. Surprisingly, “increased market share” and “new revenue streams” were much farther down the list. This implies that business leaders are uncertain about how new technologies can transform their business models to grow revenue and market share, and are instead more focused on leveraging them to take costs out of their business. 

This point is reinforced by the fact that “unproven business case” was the top cited challenge of adopting new technologies. Another popular challenge was “technology complexity”. Following are several charts providing a more detailed overview of the top three key benefits and challenges of adopting each of the four key technologies: IoT, RPA, AI and Blockchain.

Recommendations for leveraging technologies

Armed with this information, how can financial executives and their boards gain a competitive advantage using these technologies? Following are some of KPMG’s key recommendations:

• Assess the impact on their business model, including value proposition, key stakeholders, workforce, current processes, and legacy technologies. 
• Prioritize funding for new technology adoption to create long-term value.
• Engage in strategic mergers and acquisitions and partnerships to accelerate implementation of transformative technologies.
• Ensure their business model is adaptable to the new technologies.
• Explore adopting technologies that millennials are comfortable with as millennials are the largest contingent of the future global workforce and can provide a competitive advantage.

For more information on the study, click here. 

Tim Zanni is KPMG’s Global and U.S. Technology Sector Leader and Chair of Global and U.S. Technology, Media & Telecommunications. With more than 35 years of significant global experience, he builds relationships and advises the firm’s largest technology accounts.