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From transition to transformation
Cloud is becoming almost synonymous with digital transformation — a key enabler of not only bottom-line improvements, such as efficiency and cost reduction, but more engaging and seamless customer experiences. But even as companies make cloud an integral piece of the digital strategy, many struggle to realize promised value.
Bobby Soni, Principal, Global Lead, Cloud Transformation
Today, cloud adoption is like turning on the lights: Everyone knows they need to do it. Success will not come from moving workloads just for the sake of it. Companies will differentiate themselves by optimizing the cloud migration itself and then thinking more strategically about use of cloud to take advantage of all the things it can do for you.
Swami Chandrasekaran, Managing Director, Enterprise Solutions, KPMG in the U.S.
Cloud is becoming almost synonymous with digital transformation—a key enabler of not only bottom-line improvements, such as efficiency and cost reduction, but more engaging and seamless customer experiences. But even as companies make cloud an integral piece of the digital strategy, many struggle to realize promised value.
Bobby Soni, Principal, Advisory & Global Technology Consulting Leader, KPMG in the U.S.
Swami Chandrasekaran, Principal, Global Cloud Center of Excellence Leader, Lighthouse, KPMG in the U.S.
Satisfaction with cloud transformation is notably high
Enterprises are all in on cloud but few are realizing substantial ROI
35% say insufficient talent and/or skills is the biggest challenge their organization is facing or has faced on their cloud journey
Most are mature in their cloud journey, but there is more to do
Three in four respondents (75%) say they are currently migrating strategic workloads to the cloud; another 14% have completed migration and are now looking to optimize.
75%
14%
10%
1%
Evaluating cloud as an option, but remaining primarily on-premise
Piloting workloads and starting to leverage cloud, but at a limited measured pace
Migrating strategic workloads to the cloud
Completed migration to the cloud now focused on continuous optimization and modernization
Data drill down
How satisfied are you with the success of your cloud transformation programs?
Eight in 10 say they are either satisfied or highly satisfied with the success of their program. Top benefits include efficiency boosts and lowered total cost of ownership.
Highly satisfied
Satisfied
Neutral
Dissatisfied
33%
47%
12%
4%
reported that they were realizing substantial ROI from cloud investments.
Despite positive cloud momentum
only
From silo to golden thread
The research reveals troubling differences in how businesses are approaching cyber security investments and the escalating nature of cyber risk. Although technology leaders are highly confident in their cyber defenses, there are signs they are not acting proactively or strategically enough to protect the business from evolving cyber threats and create vital trust in consumer channels and interactions.
Akhilesh Tuteja, Global Cyber Security Leader, KPMG International
The market has recognized the need to embed cyber security in digital transformation and customer experience. Customer loyalty and stickiness are linked to how companies use and protect data and systems and drive trust in their technologies. As a result, cyber security is increasingly impacting growth and revenue, not just compliance.
After Covid, the cyber-threat landscape is shifting
Businesses may be underplaying key threats
As stakes rise for trusted digital enterprises, so are demands on the cyber security function
What developments pose the greatest cyber security challenges to your organization?
Remote and hybrid working (36%), combined with a related focus on digital customer experiences (35%), has created new cyber risks for businesses.
Adoption of remote/hybrid work environments
36%
35%
Cyber security is at the heart of driving holistic trust in the context of digital interaction and experience. Cyber capabilities, mechanisms, systems, and infrastructure support enterprise trust building by authenticating and validating users, governing access, keeping private data confidential, and preventing breaches to consumers.
Prasad Jayaraman, Principal, Cyber Security Services, KPMG in the U.S.
32%
24%
21%
Digitalization of customer channels
Growing complexity of operational technology/industrial control systems
Increasing interconnectivity of systems
Automation of services and processes
What are the most influential drivers for increased cyber security spending within your organization?
Customer or shareholder expectations
Government oversight/regulations
Crisis responses (e.g. breach/ransomware)
The need for new cyber security skills
Emerging threats
Adoption of new technology
Competitive pressures
Recognition of historic under investment
Third-party requirements
38%
31%
30%
29%
Improving customer service (42%) is a key driver for increased cyber security spend, but may be doing so at the expense of emerging threats (29%) and assessing third party requirements (21%).
39%
42%
Close
Changing business models
Improving customer service
Digital to the core
A powerful way to drive growth in the digital world is to reengineer front-, middle- and back-office systems around customer experience. Harnessing a broad set of centralized enterprise applications, such as CRMs and ERPs, enables businesses to build a connected enterprise in which every process and function is aligned and focused on meeting customer expectations.
Patrick Fenton, Global Executive Sponsor for KPMG Powered Enterprise, KPMG International
Enterprise technology is reaching an advanced state
Streamlined and integrated enterprise-wide
of respondents say that enterprise applications have been streamlined
88%
Streamlined for each function
50%
From outcome to starting point
We're using tech to address pain points we know our visitors have to make their experience far more customer-centric and seamless.
Sedef Gavaz, Head of Product, Natural History Museum
It would be wonderful to have a perfect predictive model showing where to direct investments, but unfortunately that’s not realistic. A productive approach is to focus on customer desires and behaviors and consider what technologies could support these areas. Assess technologies and concepts against four key customer needs driving demand: security, speed of execution, choice and flexibility.
Rowena Everson, MD of Digital Transformation, Standard Chartered Bank
Growth and the customer are the key tech drivers, but ESG is on the IT agenda as the initiative grows in importance
Tech enthusiasm high for customer engagement
What are the key drivers of your organization’s digital transformation and corresponding investments?
Accelerate customer-centricity and engagement
Improve enterprise agility and modernization
Reduce risk
Increase revenue
More than one in 4 say advancing ESG is top priority
Drive growth, efficiency, and resiliency
Advance ESG priorities/ commitments
56%
52%
45%
27%
Amplifying customer centricity is the primary goal for investing in enterprise technology, according to 46% of survey respondents
What is the primary goal for your organization’s investment in enterprise technology?
Amplify customer centricity
Accelerate agility
Rethink/ reduce risk
Create new value
Create capacity
46%
26%
22%
From constraint to enabler
Do not be complacent with the talent you currently have. I would encourage businesses to look at what is happening with the market, and really understand where the benchmarks are. Don’t wait to give people pay increases once they’ve resigned. Address problems, talk to employees, understand their pain points.
It’s great having this big tech strategy, but employers are struggling to find the people to execute their plan. Siemens is paying a lot of attention to making ourselves an attractive employer, to retain people and to attract new staff. Even at Siemens, it has become hard to find new recruits with the appropriate skill sets. It must be very hard for small- and medium-sized companies to attract young talent.
Andrew Whytock, Head of Digitalization, Pharmaceutical division, Siemens
Enterprises will need to overcome budget constraints to attract in-demand talent
Talent and culture are top sticking points across all areas of transformation
say the high cost of adding necessary talent is a top challenge of technology adoption.
One of the biggest issues right now is under-employment, shortage of people to service businesses. Touch points with customers can be critical; leveraging automation can really help where there is particularly staff shortages in play.
Phil Fersht, CEO, HFS Research
What are the biggest challenges you face in your adoption of new digital technologies?
Lack of capable talent to carry out key roles (data scientists, engineers, etc.)
44%
25%
23%
19%
16%
15%
of respondents state that lack of capable talent to carry out key roles is the number one challenge faced by organizations in the adoption of digital technologies. This will prove problematic as respondents look to deliver on their plans to invest in digital technologies.
11%
Lack of skills within our organization to either implement or fully take advantage of new systems
High cost of purchasing and implementing new systems
Sub-optimal data management
Risk-averse corporate culture that is slow to embrace change and disruption
Inability to secure data housed by systems
Lack of clear and transparent digital governance policies
Legacy technology and/or technology debt
None of the above
From dollars to action
The only drivers of digital transformation should be ROI measured through reputational impact, customer experience, or money. As an industry, we should be past the point where strategies are driven by nice-to-haves and because our competitors are doing it. If you don't showcase value and impact, why are you doing what you're doing?
Konrad Dobschuetz, Head of Digital Innovation, Novartis
Respondents say their organizations are effective in using digital to advance the enterprise
Digital transformation is living up to its promise
Overall, how effective has your organization been in using digital technology to advance its business strategy?
99%
of executives have reported a positive impact on profitability and performance over the past 24 months.
2%
Extremely effective
Very effective
Moderately effective
Slightly effective
Most report significant growth in profitability from digital transformation over the last 2 years
11%+ increase
6-10% increase
1-5% increase
No increase
We will see stronger and more powerful content in the metaverse space… because that is why customers will go to the trouble to buy metaverse hardware.
Ioana Matei, Chief Metaverse Officer, P&G
Organizations are poised to invest heavily in technologies of the future
Customer demand is what will trigger investment into metaverse and is the main goal for integrating enterprise apps and reducing points of friction.
58%
From pie-in-the-sky to real value
of respondents are planning to invest in the Metaverse in the next 2 years
of respondents plan to invest in Web3 in the next 2 years
62%
plan to invest in both technologies
37%
Enterprise leaders are bullish on how emerging digital technologies will fundamentally change how businesses function across every part of the value chain.
Barry Brunsman, Principal, CIO Advisory, KPMG in the U.S.
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admit that they are behind schedule with their position on cyber security.
The biggest cyber security challenges faced by organisations are the adoption of hybrid working and digitalisation of customer channels.
Companies must remember they are not just exposing their own businesses, but also the privacy of their customers. You have a duplicated negative impact if that information is leaked or gets hacked.
Customer experience is reliant on customers trusting the technologies they need to use to engage with a company. Businesses must build in cyber security and CISO involvement into digital transformation initiatives as early as possible.
To navigate the shortage of cyber security skills and democratise accountability, CISOs should work to build multidisciplinary teams that support digital transformation security across the enterprise. It is not just the CISO who should be driving cyber resilience — this is a broader business issue.
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was the most
was the most influential driver of cybersecurity investments for Healthcare and Technology respondents. [Q25]
Meeting customer or shareholder
expectations
of operational technology and industrial control systems is the greatest cyber security challenge for the Government and Public Sector, Life Sciences, and Telecom. [Q28]
The increasing complexity
Data protection
was the top area for cybersecurity investment over the next 2 years in France, Israel, and the UAE, with the majority of respondents in each country selecting it as a priority [Q26].
55%
Spain’s most popular area for cybersecurity investment over the next 2 years is network security, with
of respondents noting it as a priority. [Q26]
respondents in Israel (64%) indicate that they are behind schedule in advancing their cybersecurity strategies. [Q2]
The majority
of
of UK respondents say that the adoption
of remote/hybrid working environments is their greatest cybersecurity challenge compared to the global average of 37%. [Q28]
Streamlined and integrated enterpise-wide
Swami Chandrasekaran, Global Cloud Center of Excellence leader, Lighthouse, for KPMG in the U.S.
Enterprises are all-in on cloud but few are fully capturing value
Deploying cloud across the enterprise is a lengthy and complex undertaking
Robust governance models and mechanisms to bring right stakeholders to the table will help enterprises to take full advantage of what cloud offers
of companies have yet to realize significant ROI from cloud investments.
67%
What are the top challenges your organization is facing or has faced in your cloud journey?
of organizations do not have corporate-wide alignment on outcomes pertaining to their cloud transformation journey.
Insufficient talent and/or skills
Security and compliance requirements
Business / IT / stakeholder misalignment on outcomes
Cultural resistance
Existing infrastructure and technical debt
Disjointed management and practices across operating model
Lack of funding / business case
Complexity of managing hybrid / multi-cloud environments
Lack of strategy
34%
20%
17%
13%
of respondents indicate they are behind in their implementations.
Talent is a significant barrier.
From forced loyalty to value-led switching
efficiency gains
Cloud adoption is no longer the mark of a digital leader, merely the logical evolution of IT.
Stakeholder misalignment creates a very disjointed cloud implementation. A unified strategic vision of the organisational returns the cloud offers stakeholders should drive the implementation and enablement of cloud-based systems.
least satisfied
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From skills shortage to talent pipeline
From playing the long game to banking wins along the way
Digital Transformation
From pie in the sky to real value for customers
Emerging Technology
