Chief executives in the UK face “unrealistic expectations” in demonstrating tangible return from digital transformation projects, according to research by professional services firm KPMG.
A survey of 150 CEOs from leading British businesses found that the majority (72%) are frustrated by pressure at board-level to prove return on investment (ROI) from multi-year digital transformation projects, which can include the integration of technologies such as cloud services, artificial intelligence and blockchain.
Leaders instead urged boards to take a longer-term view of tech investments, with 64% advising that their company would only begin to see ROI in from AI technology in “three to five years” from initial outlay. Over half (52%), agreed on the same timescale for process automation technologies like robotics.
While 86% claimed to be overwhelmed by the time needed to make progress, the vast majority (95%) welcomed disruption from new technologies, agreeing that it is more of an opportunity than a threat.
The optimism comes in spite of a recent statement from the Bank of England’s chief economist, Andy Haldane, who warned that AI threatened to make many jobs obsolete. In fact, 71% of the CEO cohort believed that in the short term AI would create more jobs, with firms needing to onboard relevant experts to use the new technology.
“Digital transformation is no longer a choice, it’s an essential driver of revenue, profit and growth,” commented Lisa Heneghan, partner and digital transformation lead at KPMG UK. “Business leaders need to move away from simply fulfilling client needs, in sometimes laborious ways, to using technology achieve results with more depth, efficiency, and decrease the probability of error.”
The tensions didn’t end at board-level, however. One in two CEOs expressed doubt in the skills of their wider management team, confessing they were not confident their immediate team had the right experience to oversee the “radical change” organisations need.
“The reality is that digital transformation isn’t a simple change that can be implemented overnight and deliver results straight away,” Heneghan commented. “It requires embracement of innovative breakthrough technologies, investment in digital skills, and retraining the existing workforce.”
Off the back of IDC research that 70% of digital transformation initiatives were destined to fail owed to lack of defined strategy, insufficient collaboration and limited skills, ClickSoftware’s Paul Whitelam shared seven tips for managing tech-driven change recently on Marketing Tech.
“Digital transformation within any business can become more complicated when many people are involved – especially when the change is organisation-wide,” said Whitelam. “Prioritising and planning for change management early on will give you the tools to tackle problems as they arise, and anticipate and neutralise them ahead of time.”
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