Business survival emerges as the number one reason to invest in emerging technologies as Australian executives re-evaluate strategic priorities.
In their immediate response to the onset of the COVID-19 pandemic, Australian companies are prioritising investments in AI, Cloud, Blockchain and Edge Computing, according to new KPMG International research.
The report, a collaboration between KPMG International and HFS Research, Enterprise Reboot, surveyed 900 technology executives* to explore the current and future state of emerging technologies and showed while the majority of global organisations are increasing investments in emerging technology compared with a few months ago, others are pausing and re-considering the impact of COVID-19.
Specifically, 59 percent of executives surveyed say that COVID-19 has created an impetus to accelerate their digital transformation initiatives, yet approximately four in 10 say they will halt investment in emerging technology altogether as a result of COVID-19. Executives have shifted their focus to must-have technologies, and 56 percent of those surveyed say cloud migration has become an absolute necessity due to COVID-19.
The biggest issues preventing technology initiatives delivering value in Australia are predominantly not technical, but related to organisational culture, commitment to the expected benefits and worries about the risk of failure. One in five (20 percent) of Australian executives reported challenges with changing the culture of their organisation, far higher than globally (12 percent). Australian respondents are also further away from seeing value from emerging technologies — particularly in 5G and edge computing compared with organisations in the rest of the world.
"Australian respondents are driven to emerging technology because it is seen as essential to business survival — they are driven by a desire to improve decision making and customer experience. Cost reduction was a secondary driver for investment for the Australian respondents," said Jon Stone, Partner, KPMG Digital Delta.
“Emerging technologies and new ways of working can play a significant role in the transformation to a more digital economy. These technologies are helping Australian organisations build customer, citizen and stakeholder trust, keep remote workforces connected, increase business resilience and build a strong foundation for future product and service innovation."
Australian businesses have a more variable approach to cloud technologies, with lower maturity for containerisation and hybrid cloud, but a greater focus on building micro services. The results also indicates the majority of organisations will continue to focus on uplifting the maturity of data platforms and analytics — 73 percent of respondents stated the need for further investment in enterprise data platforms.
"The COVID pandemic isn’t affecting all industries equally, but for many of the industries facing the crisis, managing the transition to a digital business model is imperative. However, doing so is made more complicated in a time where investments are critical, but cash must be preserved,” said Shane O’Sullivan, Partner, KPMG Digital Delta.
“Now more than ever, organisations need to make smart investments in emerging technologies if they are to prevail in the medium- to long-term. Those who don’t, risk threatening their own survival."
Over half (57 percent) of global respondents say COVID-19 has significantly changed their organisation’s strategic priorities. The immediate focus is now on survival, which has become the number one objective for most emerging technology investments. The first phase of KPMG research showed that many organisations were deterred from significant emerging technology investment because of obstacles in the organisational culture to enterprise-wide adoption, and a fear that projects will fail. Since the onset of COVID-19, respondents in the second phase of research are more focused on making a strong business case for extending existing technology investments.
Other key findings include:
*Survey methodology In March-June 2020, KPMG International and HFS Research conducted two global, cross-industry quantitative surveys. Comprised of 900 total technology executives, the surveys sought to uncover investment and adoption of emerging technology. All respondents held executive-level positions at Global 2000 enterprises with $1B+ annual revenue, operating across nine business sectors and nine countries, including the U.S., Germany, U.K, Netherlands, Japan, Australia, India, France, and Canada. Survey data was supplemented by qualitative interviews with enterprise leaders who oversee the investment and adoption of these emerging technologies in their organisation.
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