CEOs worldwide and in Ireland believe that the time for change is now or never.
CEOs worldwide and in Ireland believe that the time for change is now or never. Industry-specific transformations, along with new technologies, connected customers and convergence are driving a rapid pace of change.
Change is everywhere and no industry is immune whether in Ireland or overseas. According to Paul Toner, Head of Management Consulting with KPMG: “There was a time when business was in a relatively steady state and change was incremental - now it’s exponential and centre stage.” Toner highlights the point that identifying sources of competition is not always easy. “Over half of the Irish based CEOs we surveyed are worried about new entrants that are not currently perceived as competitors disrupting their business.”
From highly regulated sectors like financial services looking to secure their future to consumer goods companies using digital to attract and retain more customers the constant is change. In retail banking, mobile technologies already allow consumers to conduct transactions online while services that use Touch ID and NFC technology allow consumers to avoid using PINs for in-store transactions. In the motor trade, how well a car integrates with a consumer’s mobile device is becoming part of the buying decision.
Meanwhile, in-store sensors connect to customers’ smart phones, collecting data and giving retailers a better understanding of the journey from entry to check-out. Streaming services like Netflix are disrupting entertainment, while robots are taking over elements of jobs in the services sector that were previously thought to be incapable of automation. What seems impossible today becomes mainstream tomorrow.
It’s in this context that Paul Toner believes that some of the biggest change drivers are technology, connected consumers and sector convergence; “These particular forces are upending business models and demanding a new way of thinking about business.”
As the lines between industries, companies, technologies and customers converge, CEOs see technology as both a trigger for - and an enabler of - their transformative strategies. Traditional industries understand that digital is integral to survival and that they must become software and digitally-enabled to sharpen their competitive edge.
Companies are utilising digital technologies like cloud, mobile, big data, and social as well as their own disruptive technologies to bring about transformational change. Organisations are also acquiring new skill sets and competencies and embarking on collaborative partnerships, alliances and joint ventures with suppliers, customers, investors, government, academia and even competitors. The ability to manage relationships in this new ecosystem is becoming a core competence for CEOs.
So what are the main worries for CEOs in terms of transformation? 60 percent of Irish CEOs are concerned that their organisation is not disrupting business models in their industry (53 percent globally). Meanwhile, new entrants or competitors disrupting their business model are a concern for 56 percent of Irish CEOs (65 percent globally) and almost half (48 percent) of the Irish CEOs who participated in our research are concerned about the amount of time they have personally to think about the forces of disruption and innovation shaping their company’s future. A significant number (40 percent) also expressed concern about integrating basic automated business processes with artificial intelligence and cognitive processes.
The speed of transformation is, quite literally, inhuman as the advance of data and analytics (D&A), and cognitive and machine learning drive forward change more quickly than humans alone could ever achieve.
Whilst there isn’t a significant difference between Irish and global CEOs in terms of those who see themselves as leaders in the use of D&A (24 percent in Ireland v’s 30 percent worldwide) 44 percent of Irish CEOs state that they are still evaluating their use of D&A when compared with only 6 percent internationally – suggesting that there is still some way to go for many Irish based businesses in extracting the full value out of their data.
As the volume of information flowing into companies from internal and external sources increases, trust becomes very important. Of the Irish CEOs surveyed, only 20 percent have a high level of trust in the accuracy of the data they use in comparison with 41 percent of their global peers.
According to Paul Toner, addressing this trust gap will allow companies to have greater confidence in their decision making: “Many Irish CEOs have told us that they’ll be leading significantly transformed businesses and experience shows that they’ll need to trust their data before moving to unlock the value contained in the information at their disposal.”