Innovation and technology driven disruption will remain key priorities for Irish CEOs in 2018, according to KPMG managing partner Shaun Murphy.
While the dawning of a new year inevitably brings heightened interest in where businesses will focus their priorities, there is a challenge inherent in making predictions.
Murphy does enjoy a considerable advantage when it comes to forecasting due to his firm’s varied client base as well as the research it carries out among CEOs both in Ireland and worldwide. Even then, he agrees that understanding what businesses should be doing to develop profitable opportunities which arise from innovation and new technologies whilst protecting their core business can be challenging.
“CEOs often have to manage issues that they don’t have direct personal experience of and they are increasingly concerned about being blindsided by technology led disruption,” he says. “Many business leaders started their careers in more conventional times when themes such as artificial intelligence (AI) and cybersecurity were in the realms of science fiction. They’re everyday terms now.”
Murphy highlights the growing challenges faced by many Irish business leaders: “In most cases, successful companies have decent revenue streams from reasonably well-established products or services that are well into their lifecycle. Yet they are also driven to innovate, develop new products and services and promote efficiency.”
In the robotics area for example, he notes the ambition of many organisations to automate repetitive tasks and to process large amounts of data quickly and cheaply as a continued priority in 2018. Despite the clear benefits - from cost minimisation and waste reduction to improved productivity, Murphy also cautions that it can take time for theoretical benefits to become a reality. “The impact of technology is usually overstated in the short term and underestimated in the longer term.”
Yet ironically, if business leaders are to keep abreast of developments in areas such as robotics, AI and blockchain, they will need to draw on the often expensive expertise and guidance of individuals with specific knowledge. Such expertise can be costly to acquire – either because there is strong competition for talent, or because upskilling existing staff is time-consuming and creates new gaps to fill.
It is this competition for talent, especially in the next few years, that is highlighted by recent KPMG research on CEO attitudes to technology driven, disruptive game changers. The findings showed that whilst the popular view of AI and associated technologies is that they will make some positions redundant, almost four in five (79 per cent) of Irish CEOs expect to increase specialist headcount in some roles in the near future in order to realise the potential in areas such as AI.
Murphy believes it’s a significant challenge for business leaders to be certain they are following the best approach: “CEOs need to balance the economic cost of pursuing these opportunities versus the potential growth it may generate for the business. We’re seeing more and more clients looking for support to help chart a course through issues such as the often competing challenges of data availability, innovation and security.”
He also believes that Irish business leaders are well positioned for fairly radical change and highlights the example of the explosion in the volume of data generated by business as well as the associated new legal obligations regarding such data - most notably in the context of GDPR (General Data Protection Regulation).
“Data can be a double-edged sword as technology provides potentially significant opportunities in terms of new customer insights, but equally it creates a major challenge in terms of potential breaches and the need to comply with regulation.”
According to Murphy, it’s about more than just regulatory compliance, it is also about “getting to grips with the vast volumes of information that most large organisations collect, store and process and the associated risks.”
Should anything go wrong with data, the problems can be serious. For example, the penalties for a breach of the forthcoming GDPR are very significant. There is also the challenge of protecting reputation and rebuilding and maintaining trust.
Unsurprisingly, he also expects a continued focus in 2018 on IT and cyber risk and the associated issues of business continuity and disaster recovery.
Finally, Murphy believes that in 2018 successful business leaders will continue to show themselves to be good listeners. “Staying curious about what motivates your customers and clients and their changing behaviour has always been worthwhile” says Murphy. “What makes it more essential now is the role and potential of technology. Successful businesses do many things well, but one perhaps underrated quality is that of listening for signals through the noise – for example talking directly to customers to find out why they are changing their behaviour and if and how technology is driving that change.”
This article originally appeared in the Irish Times on 11/01/2018 and is reproduced with their kind permission.