KPMG: Digital Transformation Presents Challenges, Opportunities Going Into 2023

As 2022 draws to a close, businesses are justified in turning a skeptical eye toward the new year. Industries buffeted by record high inflation, the Russian invasion of Ukraine disrupting energy markets, and a COVID pandemic that stubbornly refuses to go away, are finding that the need to streamline and modernize operations has become critical to success in an uncertain world. CIOs are feeling the pressure to succeed at digital transformation, and a global survey of more than 1,300 executives by KPMG has laid out some of the operational barriers they will face as they continue their transformation efforts.

Overall, emergent and disruptive technology poses both an opportunity and a threat to businesses, with no shortages of advances that sound promising, but ultimately prove too expensive or complicated to deploy at scale — with companies pursuing them burning crucial resources at the expense of other priorities. CEOs and their companies can avoid wasting valuable time and money by developing management and transformation teams that can quickly identify opportunities, shift investments, and cut losses as needed.

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“In today’s digital age, technology is not only an enabler of business functions but also a critical driver of competitive advantage in many organizations,” said Harsha Bellur, Chief Information Officer at jewelry manufacturer James Avery Jewelry. “This means the CIO and CEO — and honestly the entire C-suite — need to work closely to embed technology into the business strategy and operating model.”

As always, top-down support remains critical to the success of transformation efforts. Executives must serve as champions of change, following a data-driven approach to develop an ongoing evolution that is responsive to customer needs and insights. Support is needed for the human element of companies as well: accelerated digital transformation is also speeding up the burnout of IT staff that have been putting forth maximal effort to meet the challenges of the past several years. Strong leadership must work to prioritize IT demand based on expected business outcomes and a shared vision of the organization’s future.

To best overcome the challenges and embrace the opportunities, CEOs and CIOs will have to collaborate on a regular basis to set priorities, develop a process for evaluation of new technologies, and provide the support and leadership needed to ensure successful transformation efforts. With visions and priorities aligned, CIOs will be in a strong position to embrace opportunities, take on challenges, and ultimately deliver business value and a competitive edge to their companies.