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IT in the New Reality for Technology

As a sector better described by its sub-sectors, the technology industry continues to experience high-growth as well as diversification in membership. While there is no agreed composition of this industry, hardware, software, semiconductors, networks, and internet are the core of the segment. With the majority of survey respondents reporting a significant acceleration in business transformation powered by technology, many companies in the technology sector experienced a surge in demand for their products and services. The near-universal shift to remote working and new interaction models through digital channels as the only viable means of consumer interaction overnight caused an uptick in network, hardware, cloud solutions and collaboration tools which are now here to stay.

In the long-term, many sectors are looking to technology to digitally transform their businesses and achieve strategic goals. At the core, investments for key foundational technologies — such as cloud, modern networks, automation, data insights, and AI/ML — are being made as businesses strive to become digital leaders. For numerous technology businesses, these are boom times: nearly half the sector (43 percent) is in ‘surge’ mode, and the challenge is to service demand, keep ahead of competitors and remain agile to react to market developments. But while companies are benefitting from the surge, there are still challenges for a tech sector company, especially linking up their middle and back office functions to improve responsiveness and time to market. Some technology-based gig economy platforms have seen a drop-off in business due to lockdowns and physical movement restrictions. While start-ups who had not yet fully established themselves in the market may struggle to gain traction and face reduced capital and constrained budgets. It is not quite a one-way street — even if the traffic is in full flow. No matter how a business is faring post-pandemic, technology has become more crucial than ever in one way or another.

Board priorities & investment

The top three business issues boards in this sector are looking for the technology function to solve are telling: customer engagement (52 percent), new products and services (45 percent), and agility/speed to market (40 percent). It is all about delivery, innovation and the customer experience. As a result, two areas are set to dominate tech firm investment: software as a service and distributed cloud. Many tech companies are either cloud-native or at scale with their adoption of cloud and modern infrastructure. Further adoption of SaaS solutions to run and scale the enterprise is a clear priority for organizations that do not require application modernization. Expanding to everything-as-a service (XaaS) by stitching  together an ecosystem of solutions and external partners will be essential routes to agility and faster service delivery. Where IT and technology is often inseparable from the end-product, CIOs and CTOs in this sector are doubling down on a modern multi-cloud backbone that will have easy to connect applications and APIs that are streamlined from the user perspective and built on cloud-native, fast, and frictionless networks. The challenge for tech firms will be to continue innovating their offerings and bringing forward new, differentiated value propositions to rising customer expectations while still containing costs across a wide-variety of platforms. Partnerships, alliances, and acquisition activity will continue to be a core strategy to increase the best-in-class products and services that differentiate the leaders in this space.

CIO Report pages Technology

How KPMG can help

While KPMG member firms are some of the largest providers of services to technology organizations globally, we take a boutique approach to client issues with a focus on flexibility, adaptability, and innovation. We recognize that there are many on-ramps to supporting IT transformation and we’ve tailored our services accordingly:

Transform the business

  • Strategy and operating model
  • Organizational design
  • Enterprise architecture
  • Portfolio planning
  • Merger and acquisition
  • Integration and separation

Run the business

  • Scaling agile
  • Product management
  • DevOps tooling
  • IT financial management
  • IT service management
  • IT asset management

Modernize and protect

  • Cloud strategy
  • Data center strategy
  • Continuity and resiliency
  • Workplace transformation
  • Network modernization
  • Cyber, risk, and compliance