Business transformation is one of the most critical issues facing CEOs today.
The rapidly changing digital landscape, increased adoption of new, game-changing technologies, and their ability to drive customer value make business transformation one of the top priorities for CEOs today.
KPMG’s recently published 2017 CEO Outlook revealed a high degree of focus on specific types of transformation currently being pursued by global organizations. Customer-focused and innovation-led transformations top the chart at 53 percent for each of these business-transformation initiatives. This can be compared to more traditional transformation efforts, such as those resulting from merger and acquisition activity and changing market or competitive forces, which CEOs list as drivers only 24 percent and 20 percent of the time, respectively.
As such, chief executives are not only embracing the use of advanced data and analytics, cognitive technologies, and cyber security, but are also treating these as an opportunity to differentiate themselves and drive future growth.
A significant number of respondents say the rise of new digital technologies is providing an opportunity to fundamentally change how they do business and provide value to their customers. With 77 percent of respondents saying they plan to invest in the Internet of Things (IoT) and 74 percent planning to invest in cognitive technologies over the next 12 months, CEOs understand that the adoption of new digital assets and digital labor solutions is an increasingly important part of driving value for their organizations.
Interestingly, while CEOs are expressing their need to adopt new technologies and create corporate cultures that embrace change, they are furthering their organizational planning to include a balance of existing human talent with new digital labor solutions. Some respondents also agree that the transformative effects of technology can help lower costs and improve analysis and decision making but are quick to point out that they don’t expect digital labor solutions to completely replace human workers.
“The future focus will be on developing resilient careers, not just jobs,” says Jonas Prising, chairman and CEO of Manpower Group, adding that transformation will result in employers creating new jobs for workers who are replaced by technology. “Employers will shift from consumers of work to builders of talent. This is how companies will compete,” Prising says.
Customer attraction, loyalty and retention remain key priorities for CEOs who are increasingly turning toward advanced data and analytics solutions to better understand which products and services are meeting user expectations, and which are underperforming.
“Recognizing that advanced analytics can help them proactively transform their offerings to better address their customers’ future desires, CEOs are placing greater value on improving their market positions and gaining competitive advantage,” says Rob Arning, KPMG’s vice chair, Market Development. “CEOs know that for companies to deliver a differentiated client experience, they must anticipate customers’ needs and demands,” he said.
With 70 percent of respondents saying they feel a growing responsibility to deliver on specific customer interests, customer focused investment remains a top priority for executives. More than half of respondents have already re-aligned their back- and middle-office processes to help provide a simpler, more convenient, and friction-free customer-centric approach to front-office operations. Their focus is now shifting toward maintaining customer loyalty and increasing retention in an increasingly disrupted marketplace.
For more about our findings, please read the 2017 CEO Outlook, (PDF 2.10 MB) learn from the results, and engage in a discussion with us. We will be publishing a Global Transformation Study in the upcoming months, which will expand upon what we’ve learned in the CEO Outlook Survey, and provide guidance about how organizations succeed in this changing business environment.