Business survival has emerged as the number one reason to invest in emerging technologies as Australian executives re-evaluate strategic priorities, according to new research from KPMG International.
In their immediate response to the onset of the COVID-19 pandemic, Australian companies are prioritising investments in AI, cloud, blockchain and edge computing, the research has found.
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% 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% 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%) of Australian executives reported challenges with changing the culture of their organisation, far higher than globally (12%). 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," says Jon Stone, Partner, KPMG Digital Delta.
"Cost reduction was a secondary driver for investment for the Australian respondents."
Stone says 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% of respondents stated the need for further investment in enterprise data platforms.
Shane O'Sullivan, Partner, KPMG Digital Delta, says the COVID-19 pandemic is not 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," he says.
"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."
Global picture: the case for emerging tech
Over half (57%) of global respondents say COVID-19 has significantly changed their organisations 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:
- Those organisations realising greater value from emerging technology have focused on generating greater trust by investing in uplifting their business skills related to technology, set guidelines for the responsible use of the technology, developed policies around data ethics, and established clear roles and responsibilities for emerging technology related activities.
- Nearly 65% of respondents believe that the combined use of emerging technologies is much more beneficial than using any of the technologies in isolation. AI-powered and cloud-enabled are emerging as the foundation and are featured in more than one-third of all technology solutions.
- Organisations making the highest investments see greater returns than those making the smallest; in fact, those in the highest quartile of investments were significantly more likely to say they have already realised tangible value.