Fewer than a third of business leaders think their technology foundation readiness is very high, according to KPMG, even though a majority believe that advanced technologies are critical to driving digital transformation.
In a new report, KPMG said that three-quarters of senior leaders believe that generative AI, neural networks, and digital twins will significantly boost their chances of transformation success.
These transformation efforts are taking place on a large scale, with nearly nine-in-ten large businesses working on at least two transformation programs at the same time, the report noted, with more than half running three.
But enterprise approaches to digital transformation are changing, the report said.
Tash Moore, global transformation leader at KPMG International, said digital transformation is no longer viewed as a one-time activity, but more of a perpetual process of upgrades upon upgrades.
The rapid evolution of the global technology landscape, combined with the emergence of new technologies, means tech leaders must continually evolve.
"Transformation is no longer a periodic initiative but a continuous journey. Our research underscores the importance of trust in leadership and the strategic use of partnerships in navigating this complex landscape," Moore said.
"Enterprises that effectively integrate the adoption of advanced technologies with strong leadership and sound judgment are well-positioned to thrive."
The top five barriers limiting digital transformation, KPMG said, are lack of resources, skills or expertise, stakeholder resistance to change, stakeholder and employee resistance, competing business goals, and a lack of funds or an unclear business case.
Those doing well tend to have a resilient culture of trust, shared values, and alignment to the company's strategic vision, with 73% of digitally mature enterprises having high levels of trust in their leaders.
However, KPMG warned that many enterprises aren't making the most of their data, technology, and people. Two-thirds of senior leaders rated their tech foundations as no better than adequate, while most said they expect the impact of technology on transformation to rise in the next one to three years.
Meanwhile, leading companies are making the most of partnerships to accelerate their go-to-market strategies, outmaneuver supply chain challenges, and leapfrog technology capabilities - although only one-third of senior leaders believe their current partner ecosystem is strongly aligned with their transformation goals.
Around 60% of senior leaders and line leads believe adopting advanced technology will increase the likelihood of transformation success.
Similarly, nearly half of digitally mature organizations expect to spend up to $25 million to support their transformation efforts, whereas 46% of their digitally immature counterparts are only willing to spend $1 million for the same objectives.
Digital transformation success needs a long-term outlook
KPMG advised organizations to make sure they're looking at the big picture when embarking on transformation projects.
This includes boosting digital literacy and technology infrastructure, fostering a resilient organizational culture, aligning their transformation and ecosystem strategy, and leaning into AI across the enterprise.
"We’re at a real inflection point in the digital revolution," Moore said.
"Enterprises can capitalize on this to create and unlock greater value and achieve competitive advantage – including the deliberate choices on how digital and data is utilized, to risk management and driving product and service innovation."
