For every company, digital solutions are becoming the oxygen which allows a business to breathe and run at market speed. Digital is now mainstream in every business and across every sector -it isn't just about those tech giants or unicorn start-ups that we all recognize. IDC predicts that by 2022 fully 80% of revenue growth will depend on digital offerings and operations. For the IT function of the future, this means your organization can live or die by the way it delivers technology services, responds to issues and manages expectations.
It seems the world has now moved on from arguing about what digital means to actually using it to deliver some value. Our recent study of IT leadership found that 61% of companies that are effective at using digital technologies see higher revenue growth than their competition. In fact, in manufacturing, a sector not known for digital innovation, the figure goes up to nearly 70%. According to Steve Bates, Principal and global leader of KPMG’s CIO Center of Excellence, “We are seeing businesses which have existed for tens / hundreds of years starting to successfully digitally transform their business, integrating their front, middle, and back offices into what KPMG calls the connected enterprise, all laser focused on the customer.” Companies demonstrating a greater ability to execute on a customer-centric strategy spanning the organization are eight times as likely as their less-successful peers to deliver experiences that consistently exceed customer expectations. Customer-centric organizations are also 38% more likely to report greater profitability than ones that are not. “If you’re like many organizations, you may struggle to deliver value to customers while delivering a meaningful return to the company. This is often due to a focus only on customer-facing operations,” continues Bates. CEOs are taking notice and taking action, with over half (54%) saying they are actively disrupting the sector in which they operate, rather than waiting to be disrupted by competitors. Whether it is called disruption or digital transformation, the future of IT will be inexorably intertwined with this concept of the connected enterprise.
“The companies that are winning in the market are not asking IT to keep the lights on. The importance of technology in driving growth and reducing risk is fully recognized in the boardroom,” Bates notes.
While there is a great deal of investment and senior leadership interest in keeping pace with tomorrow’s customer, more than 80% of the leaders polled are concerned about their organization’s ability to both design and implement the operating model of the future. And unfortunately, 78% of CIOs believe their digital strategy is only moderately effective, or worse.
The excerpt was taken from the KPMG publication entitled Creating a future-ready IT function -today.