Technology transformationTech CEOs think digital investment remains a priority, but external threats and organizational obstacles still exist. 64% prioritize capital investment in buying new technology, as opposed to 36% who prioritize investment in developing their workforce's skills and capabilities. What this means for tech companies:
- Start with the strategy: With 69% of tech CEOs saying the decision-making process on what technology to use is holding back their transformations, it's important to stay focused.
- Get close to the customer: Focus on direct investments to capabilities that propel strong customer experiences. To retain customers and market share, companies must think differently about how to use technologies to better deliver on audience expectations. Additionally, companies must carry out future scoping to ensure technology selection and workflow design align with customer needs and expectations. This will help integrate the kind of excellent digital experiences that encourage customer loyalty through good and bad times.
- Bring your people and technology together: Tech companies have invested significantly in new digital solutions and will continue to do so. But technology solutions alone will not achieve the business goals if they are only understood and utilized by a select few employees. The entire workforce must be brought on the transformation journey, through effective change management, to maximize adoption and use the new technologies to their full potential.
- Consider strategic M&A: It can be time-consuming to adapt new technologies in-house and (re)train existing employees. To open up new markets or acquire talent and new technologies, M&A can accelerate growth and digital transformation efforts.
Risk insightsTop five threats to the growth of technology companies over the next three years are Operational issues (14%), Emerging/Disruptive tech (12%), Reputational risk (12%), Political uncertainty (11%), and Interest rates (9%). What this means for tech companies:
- Mitigate operational issues by becoming a connected enterprise: A lack of alignment between functions and systems can hinder the ability to deliver smooth customer experiences. By harnessing technology and supporting organizational changes, tech companies can focus every operational process and function through the front, middle, and back offices on meeting customer expectations. Connected enterprises gain the insights, agility, and alignment to generate new levels of customer value in a digital-first world.
- Recognize cybersecurity as a strategic function: Cyber is no longer an IT issue. It's a pervasive, fundamental business imperative. The increase in cyberattacks, coupled with the difficulty of detecting an attack in time, calls for both automation technology solutions and building a human firewall.
- Emerging tech to drive growth: Should a recessionary environment emerge, it is likely to cause many tech companies to make tough choices about emerging technology investments. Digital leaders, however, are likely to accelerate emerging technology adoption to empower customer centricity. But digital leaders can also leverage core technology, namely automation, as a critical cost lever. Together, that spells not just growth but profitable growth.
- Climate change can't be ignored: Even though climate change ranks in the middle tier of perceived threats, if unaddressed, its impact can overflow into other risk areas such as operational issues, corporate reputation, regulatory concerns, and supply chain. There is only going to be one kind of economy in the future - a low-carbon economy - and investments tech companies make now will position them to thrive throughout the transition.
Talent insightsTalent is a top operational priority prompting tech companies to improve the employee experience. 67% see their workforce being fully remote or hybrid going forward, compared to only 35% across all industries. What this means for tech companies:
- Embrace different ways of working: As some industries and organizations launch return-to-office plans, it's important for tech CEOs to develop working structures that suit their people. Active listening, empathetic communication, and a commitment to finding the right approach over the long-term will be key to delivering an exceptional employee experience, reducing burnout, and retaining skilled workers. Remote work options, especially, expand the talent pool geographically.
- Avoid short-sighted workforce decisions, even in a recession: Intellectual prowess is the greatest resource for tech companies. Regardless of the economic climate, leaders need to invest in developing their top performers. For companies considering tough workforce options, making short-term decisions to let talent go can have negative long-term consequences.
- Use technology to develop and retain talent: The investments that tech companies have made into tools, and their own custom platforms, during the pandemic have paid off in terms of employee productivity and collaboration. The sector has readily engaged automation technology, in particular for transactional tasks, freeing employees to be upskilled to deliver other knowledge-based work that is in high demand but short supply. Automation technology creates opportunities for learning new skills, exposure, and career growth.
- Explain your purpose: A business's purpose is increasingly seen as a differentiator. According to 75% of tech CEOs, corporate purpose will be important for strengthening employee engagement and value proposition over the next three years.
ESG insightsESG is good for business, yet challenges remain. 55% agree that ESG programs improve financial performance, up from 38% last year. What this means for tech companies:
- Openly acknowledge ESG's importance to the business: Tech CEOs increasingly agree that ESG programs improve financial performance. It includes securing talent, strengthening the employee value proposition, attracting loyal customers, and raising capital.
- Do not skimp on ESG during a recession: It may be tempting to consider cutting ESG spending, but now is the time to take a long-term approach and double down on ESG efforts. Tech CEOs that keep up their ESG momentum stand to not only improve financial performance, but also gain greater trust with their employees, investors, customers, and other stakeholders.
- Invest in real-time supply chain technologies: Tech companies should monitor their supply chains more deeply. To do this, global supply chain leaders are starting to double down on investing in technology - including real-time, end-to-end analytics to identify where issues exist and improve visibility across the entire value chain.
- Strive to measure the progress and effectiveness of ESG initiatives: Increasing measurement and governance to build a more robust and transparent approach to ESG initiatives is among the top accelerators of ESG strategies at tech companies. Stakeholders increasingly want to know how companies contribute to society, and regulatory bodies are implementing mandatory climate disclosure rules.
- Build strong connections among functions: Resilient organizations have well-connected internal teams, allowing, for example, the finance function to know what the ESG team is doing. Consider moving some ESG reporting to the financial function to imbue ESG reporting with the same rigors and controls as financial reporting.
"Digital is one of Thailand's S-Curve industries that is causing changes in the business sector and the country's overall economy. Tech companies that make a concerted effort to hold onto their people and continue to drive value by investing in cyber and ESG stand to gain the most over the long term," say Supachate Kunaluckkul, Head of Technology, Media and Telecommunications, KPMG in Thailand.Read the full report here.
Source: KPMG Thailand