Wednesday, July 24, 2024

Businesses turn to partnerships for technological change needs

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As businesses press ahead with multiple technological transformations, a two-thirds majority are not sure their systems are ready for the change. A new study suggests many firms are heading toward ‘partnership models’ to help cope.

Advancing technology has continuously dominated the business agenda in the last decade. But even as the latest wave of excitement around the potential of AI washes over the world’s boardrooms, there is a suspicion that most firms are still somehow not in a position to successfully implement digital transformations efforts.

KPMG’s ‘Transforming the Enterprise of the Future’ study draws on data from a global survey of over 480 senior leaders and 1,600 line leaders from companies with at least $500 million in annual revenues. And the firm’s findings show that as much as executives expect technology to have a major impact their operations, under one-third feel they are actually ready for change.

Over the past 12 months, 28% of respondents said technology had significantly changed the landscape and how they operate and execute transformations. That figure grew to 43% when looking ahead over the coming three years. At the same time, just 15% felt that technology would have little to no impact over the same period. Reflecting this, 88% said they were now pursuing two or more concurrent organisational transformations.

Commenting on those findings, Tash Moore, global transformation leader at KPMG International, said, “We’re at a real inflection point in the digital revolution. Enterprises can capitalise on this to create and unlock greater value and achieve competitive advantage – including the deliberate choices on how digital and data is utilised, to risk management and driving product and service innovation.”

But when asked about the readiness of their technology foundation to keep up with this, just 29% said they were well-prepared. That included 25% who were highly prepared, and just 4% who were “very highly” prepared. A 58% grouping gave a middle-ground answer on the subject, and 14% were convinced they were not prepared at all, suggesting the majority are at least uncertain about how ready they are.

Organizations acquiring technology are moving from capital investment towards partnership models

As firms look to improve these foundations, many are changing tack when it comes to operating alone. Previously firms had mostly looked to attract investment to build technology in-house, or sought to obtain a licensing cost on technology they could then adapt – but the number of respondents still doing that has fallen by 3% and 16% respectively over an eight-year period. 

Now, many firms are instead moving toward bringing in partners to help realise their technological transformations, without having to re-invent the wheel every time an innovative form of tech emerges. The number of firms seeking strategic partnerships has risen by 11% over that same period to 40%, while those seeking full partnerships have more than doubled to 28%.

Moore added, “Transformation is now a continuous journey. Our research underscores the importance of trust in leadership and the strategic use of partnerships in navigating this complex digital landscape. Enterprises that effectively integrate advanced technologies and complement with digital literacy, strong leadership, and sound judgment are well-positioned to thrive.”

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