Value-Centric Technology Modernization will Drive Successful Business Transformation Outcomes – KPMG

By Lane F. Cooper, Editorial Director of BizTechReports, Contributing Editor, CIO.com

As the enterprise technology community continues to assess the impact of disruptive innovations – including generative artificial intelligence (GenAI) – on business transformation initiatives, sustained success will depend on the ability of senior decision-makers to maintain a disciplined focus on business value creation and strategic risk reduction in this economy.

It is a directive that is easier said than done as the imperatives to keep up with the latest technological innovations compete with the need to move forward prudently – especially for those operating in highly regulated industries. Establishing strategic frameworks that enable rapid but controlled adoption of new technologies will emerge as the key to navigating a business and technology environment that will likely remain in constant flux. 

These were among the conclusions of a Chatham House Rule executive roundtable hosted by executives from KPMG during the recent 2023 CIO-100 Symposium. The session featured perspectives from over 20 senior business technology leaders representing a wide array of industries, including healthcare, financial services, manufacturing and pharmaceutical, as well as federal, state and local government agencies. 

For a debrief after the event, we caught up with Sachin Satija, Partner - Digital Transformation and Emerging Tech leader for KPMG, Danielle Beringer, Managing Director - Data Management & Engineering leader at KPMG and Matteo Colombo, Partner - Practice leader Digital Engineering at KPMG.

Avoiding FOMO To Embrace a Rational Innovation Agenda

GenAI loomed large throughout the CIO-100 event. While it was also the topic of intense discussion and debate throughout the nearly two-hour roundtable, there was a level of maturity around the topic discussion that belied the novelty of the technology.

"GenAI was clearly at the top of mind for everybody. But it was explored in the context of other imperatives -- including risk, governance, security and GenAI's relationship with other innovations -- in a very sophisticated manner," said Satija. 

GenAI, he suggested, represents the latest in a series of dynamic developments – including a global pandemic, the rush to support an increasingly modern workforce and the cloud-driven fragmentation of enterprise infrastructures. The constant onslaught of disruptions appears to have prepared – and perhaps conditioned – senior executives to avoid decisions based on the fear of missing out (FOMO) by instead adopting a posture of rapidly but deliberately assessing how to integrate innovations into their business transformation agenda. 

"The leaders we talked to are not losing sight of all the other strategic issues and initiatives and are focusing on delivering technology-led business transformations at an accelerated pace. They are also not afraid to discuss the potential benefits and the risks associated with new innovations and want to leverage them in a reasonable manner to provide more velocity to these transformations." he said.

Getting the "Data House" in Order 

Throughout the roundtable discussion, noted KPMG's Beringer, GenAI was recognized as a potential contributor to increased enterprise computing complexity and a compelling solution to infrastructure and application fragmentation challenges.

The key to achieving the latter (harnessing GenAI to manage technology complexity) will require a focus on the foundational element of all information technology (IT) operations: data.

"There was a recognition of bringing executive attention to the disposition of enterprise data. Data modernization is increasingly seen as the cornerstone -- even a prerequisite -- for GenAI projects," said Beringer.

This is true for GenAI, traditional AI and machine learning (ML). 

"Several executives around the table who have focused on enterprise-wide data strategies mentioned how their organizations are now seeing positive outcomes and clear ROI from their traditional data science efforts. This lays the foundation for success as GenAI is further explored, understood and deployed," she said.

Recession-Proof Action Items: Focus on Value Equation and Orchestration

As the roundtable wrapped up, several participants described how the full implications of today's global digital economy have altered how their organizations plan, prioritize and pursue technology modernization strategies to accomplish business transformation objectives. One executive noted that the "transformation objectives" themselves have changed as his organization emerged from the COVID-19 crisis, only to land in an uncertain business climate in which concerns about inflation threaten a potential recession. 

KPMG's Colombo offered his perspective.

"Regardless of whether we get the soft landing that we all hope for – or we don't – we should all probably expect the next year to be less bountiful from a growth perspective," he said.

To this end, he suggested that a two-pronged strategy focusing on value-oriented efficiency and orchestrated integration will consistently optimize investments in current and future enterprise technologies.

"This notion of being value-centric is very important. If you are a CIO, two key actions should be considered. First, take advantage of new technologies – like GenAI – to reduce technical debt because it is a strategy that pays off in any economic cycle," said Colombo.

The reason? 

Tech debt is often associated with stovepiped operations. Locked in those siloes, he explained, is untapped and inaccessible value. If GenAI, or any other technology, can help organizations integrate – and/or transfer – value to the rest of the enterprise, organizations will reap the benefits of efficiency (cost reduction) while generating new opportunities (revenue expansion). 

"The second thing is to prioritize orchestration. Orchestration is important for two reasons. It ties together common threads across the enterprise, enabling AI initiatives, enterprise-wide data strategies and cloud-based infrastructures to optimize and streamline operations. In today's context, it provides the basis for establishing effective – and secure – GenAI frameworks," he concluded.

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