Can automation grow your business? | KPMG | GLOBAL

Can automation grow your business?

Can automation grow your business?

New technologies are rapidly transforming how companies develop, produce and sell goods.

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Child watching robot

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If you don’t have an AI strategy you’re going to die

That was the bold claim made by Devin Wenig, President and CEO of e-commerce platform eBay, at the ecommerce event ShopTalk in March in Las Vegas. David Neely, KPMG’s Managing Director, Technology and Process Enablement, doesn’t go that far but he does say: “Any companies in the consumer goods industry who aren’t using the latest technologies – not just AI but the internet of things and robotics – within two years will find themselves at a serious competitive disadvantage.” On recent evidence, regaining a competitive advantage in a consumer marketplace that is changing so rapidly – and on such scale – is significantly harder than it was even five years ago.

The fifth annual Top of Mind Survey shows a discrete array of technologies at different levels of maturity – AI, mobile computing, cloud computing, internet of things, virtual/augmented reality, robotics and 3D printing – are already transforming the businesses of manufacturers and retailers across the globe. The internet of things has attracted investment from 33 percent of the 526 surveyed, while 34 percent say they are using 3D printing and 32 percent have installed robots to perform basic repetitive tasks. A surprisingly high number – 38 percent – say they are using chatbots (though it is possible that many companies are not distinguishing between bots and other automated voice products) and 21 percent have embraced virtual/augmented reality. The fascination with these technologies is remarkably consistent globally, though North America has led the adoption of robotics and drones, while virtual/augmented reality is particularly popular in the Middle East and China.

The survey suggests that many manufacturers and retailers have joined what is called the Fourth Industrial Revolution but are they moving fast enough? The International Federation of Robotics estimates that 40 percent  of the robots installed worldwide in 2016 worked in the automotive sector, while as few as 4 percent are deployed in the consumer industry. The planned level of uptake is, Neely says, a cause for concern. “From what we’re seeing in other industries, we would expect about half of companies to be using these technologies over the next two years,” he says. “But if you take robotics, only about a third of those surveyed said they will be using this technology.”

The curiosity about AI and robotics in the C-suite is immense – as is awareness of possible risks – yet Neely cautions that companies need to look further than hiring a few robots in the warehouse or spending US$25,000 on a robotic sales assistant such as Pepper (tens of thousands of which have been installed across Asia and Europe). “Companies have to think strategically about this. How do they want to leverage these technologies across the business? Where is the value? How are they going to organize to support this? What are the resources required? What are the new processes and governance they need to put in place? You need to think through those issues before you build a technological capability that can have a significant impact on your business.”

More on automation on page 48 of the 2017 Top of Mind Survey >>(PDF 1.33 MB)

We spoke with consumer and retail executives to find out how they are responding to the challenges of automation. Read their interviews here:

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