By Emily Frolick
A tidal wave of digital disruption is redefining what it takes to compete and survive in business today. We’re at a critical inflection point where the nature of work and productivity is changing so dramatically and at such unprecedented speed that many business models have the potential to be rendered obsolete overnight.
In the face of this uncertainty, however, CEOs are embracing this new environment, rather than fearing it – and taking on new responsibilities to face change head-on. Traditionally, the CTO would drive the technology strategy for their organization, and own the responsibility for investment returns. But 91 percent of CEOs surveyed by KPMG who are prioritizing digital transformation indicated they are personally leading the technology strategy for the organization. Additionally, they are acknowledging that they are responsible for connecting their front, middle and back office strategies, with a digital-first agenda to achieve new productivity, efficiency and growth.
In spite of their passion, drive and leadership, 75 percent of CEOs agree the lead time to achieve significant progress on digital transformation is overwhelming – up from 54 percent the previous year.
Are CEOs taking on more than they bargained for?
Most CEOs are also becoming more self-aware of the time it will take – three to five years – to see an ROI on digital transformation. Last year, 12 percent of CEOs said they had already achieved significant ROI on their digital transformation. This decreased to just one percent this year. While alarming for some, this is unsurprising, to me.
CEOs seeking transformational change for their organizations are beginning to see that a rapid, wholesale rip and replace approach will not deliver. To achieve the lasting results associated with introducing and integrating new technology, they are realizing they are embarking on an evolutionary approach to build momentum for long term ROI for their organization and stakeholders.
As CEOs wait to prove the expected returns associated with digital transformation, they need a systematic way of bridging the steps in their journey to noticeable value drivers.
How will they deliver the returns on tech investments?
Agility. There is an increased recognition that companies need to improve their innovation processes and execution, and CEOs are taking action to achieve this. Key to innovating – and adopting new technology – is to move with speed, and 68 percent of CEOs agree that acting with agility is the new currency (up 14% from 2018).
Collaboration. Moving fast and with purpose often means a strategic partnership – versus an organic build or acquisition – that can allow them to innovate quickly, see new processes through, and uncover the value from digital assets. In fact, 65 percent of these CEOs agreed that third-party partnerships were the only way to achieve the agility the company needs (up from only 13 percent in 2018). They are also collaborating with startups (51 percent) and joining industry consortia focused on development of innovative strategies (55 percent).
Upskilling. Achieving digital transformation can’t be done alone, and CEOs should realize their employees will be a valuable asset to driving change associated with tech adoption. Interestingly, 59 percent of CEOs said that it is challenging to find new workers, yet just 39 percent of CEOs expect to upskill their workforce in the next three years. It’s important to embed culture change throughout the digital transformation process – so employees understand and support the organization’s goals.
While the CEO will always have holistic responsibilities in addition to technology transformation and delivering affiliated results – they can see the returns of their personal investment in digital strategies by acting with speed, partnering with other organizations, and advancing their workforce.
To learn more about CEOs’ perspectives on digital transformation and innovation, read the full report here..
For more information or to arrange an interview, please contact Stephanie Trefcer..