Businesses focused on transformation; few expect value | KPMG | TT

Ninety-six percent of global businesses focused on transformation, but less than half expect to reap the full value

Businesses focused on transformation; few expect value

Senior executives admit weakness in understanding customers and incorporating innovation.


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KPMG International today released its 2016 Global Transformation Study, revealing that, while most business leaders understand the importance of investing in continual business transformation and the need to execute these initiatives with urgency, most organizations struggle to achieve the desired results, and their top executives point to internal weaknesses that hinder their success.

The groundbreaking study, which surveyed more than 1,600 executives from multinational companies in 16 countries, found that 96 percent of organizations are in the midst of business transformation planning or execution, with 66 percent of them having started or completed a transformation program in the past 2 years. At the same time, less than half (47 percent) of business leaders say they can realize sustainable value from transformation.

“Business transformation can no longer be a ‘one and done’ initiative,” says Stephen G. Hasty, Jr., Global Transformation Leader, KPMG International. “Top executives realize that their organizations must create mechanisms to continuously evolve and respond to their external environment. Unfortunately, these business leaders are up against serious barriers to reaching goals, as well as massive disruptions in technology and customer preferences and demand.”

Transformation results stem from customer insights, innovation and organizational agility

Many of these concerns are rooted in organizations’ failure to deeply understand customers or convert those insights into differentiating innovation in a timely manner. “While customer insights inspire meaningful innovation, many companies are still not truly oriented around their customers’ expectations,” says Hasty. “Less than half of companies are placing strong emphasis on customer demographics and behaviors, so they may not be truly ‘in-touch’ with customer needs when they plan their transformation.” 

The survey findings also highlight that successful transformation may require fundamental business model, cultural and operational change. Innovation simply can’t be an afterthought. For example, nearly a third (31 percent) of survey respondents admit that their organization is incapable of implementing formal innovation processes, management and budgets.

Highlights of KPMG Global Transformation Study

KPMG’s 2016 Global Transformation Study provides a strong indication of threats driving corporate leaders to pursue business transformation programs, the challenges they face throughout the transformation journey, and the key elements yielding successful transformation results.

Among other key findings:

  • Four in 10 (38 percent) of business leaders expect their organization’s business model to be significantly disrupted in the short to medium term.
  • Almost half of companies (48 percent) state they are incapable of capturing signals of change in the marketplace to develop unique insights and hypotheses on customers’ preferences and demands.
  • Only 41 percent of organizations identify changing customer demographics, behaviors and expectations as the most influential source of insights and trends for their transformation strategy.
  • Only half (51 percent) of executives believe they can create short-term transformation wins.
  • Less than half (44 percent) of executives recognize data and analytics (D&A) as a driver and enabler of new business and operating models.
  • More than a third (37 percent) of executives say that the greatest execution barrier they face in transformation is underestimating the significance of changes to their organization’s operating model.

“Senior business leaders must improve their organizations’ ability to access deep customer, competitive and operational insights, to act with agility and embed innovation within their core business,” observes Hasty. “These are the top action items for organizations to achieve a higher level of transformation and have a sustainable impact on their business performance.”

To view additional information about the Study, please visit You can also follow the conversation on Twitter @KPMG, using the hashtag: #BizTransformation.

About KPMG's Global Transformation Study

KPMG’s 2016 Global Transformation Study offers a groundbreaking analysis of perspectives among global senior executives on business transformation. The survey targeted more than 1,600 respondents in 16 key markets (Australia, Belgium, Brazil, Canada, China, France, Germany, India, Italy, Japan, Mexico, Netherlands, Spain, Switzerland, UK and US). The survey, conducted between 28 December 2015 and 19 February 2016, included 54 percent from the ranks of C-level executives, with the remainder being managing director or above.

About KPMG International

KPMG is a global network of professional services firms providing Audit, Tax and Advisory services. We operate in 155 countries and have 174,000 people working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

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