Organization Keen On Using Tech To Achieve ESG Goals: KPMG Organizations will be advancing their ESG innovation goal for technology functions over the next two years, says KPMG Global Tech Report 2023
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Investments in technology are driving profit of more than 10 per cent in organizations, up from last year's most common rate of improvement of around 2.5 percent, according to KPMG's global tech report 2023.
One of the priorities will be advancing the ESG innovation goal for technology functions over the next two years. The opportunity here is considerable, and many businesses are focusing on how they can use technology to tackle their environmental ambitions. To reduce their carbon emissions through more efficient working practices, for example, or to measure and report their carbon emissions more accurately.
"Customer experience, ESG, and cybersecurity are considered key drivers for technology innovation, and the increasing focus on AI as the driving force behind digital transformation ambitions in the next few years. With a revolution of emerging technology unfolding before us, organizations should ensure their digital innovation plans are intentionally tied to their strategic commercial goals," said Bobby Soni, Global Technology Consulting Leader, KPMG International.
"The ascent of AI and emerging tech is revolutionizing industries, yet it's vital to remember that diversity and ESG principles must guide this transformation. Only by inclusively navigating these innovations can we truly unlock their potential while mitigating risks," said Sachin Arora, partner and head at Lighthouse (Data, AI, and Analytics), KPMG, India. Among leading businesses where investment in technology is driving confidence and profitability most quickly, AI and machine learning are even bigger priorities. More than two-thirds say these technologies will be vital in helping them to achieve their short-term business goals. While businesses are excited about the potential for AI they are still in the early stages of using it. Just 15 per cent have reached a stage where they are progressing proactively in the delivery of their AI strategies.
However, economic uncertainty has left 65 percent of businesses feeling less confident about investing in new technology; "It would be a mistake for them to completely shy away from innovation and settle for the strength of their existing tech stacks. A halt in progress could give their competitors a window of opportunity to overtake and become industry leaders," the report quoted. This nervousness around market uncertainty does seem to be impacting investment plans: 67 per cent say they are expected to do more with a smaller budget than last year.
According to 96 per cent of the leaders surveyed, technology function can help the enterprise to confidently explore the potential of emerging technologies, compared with 81 percent of businesses overall. With 72 percent of digital leaders recording improvements in employee productivity from digital transformation, compared with only 48 per cent of the other businesses the potential benefits are huge. However, it's not all plain sailing, the biggest threat to many organizations' digital transformation ambition is linked to poor collaboration across teams - often a result of negative work culture and poor communication.
Organizations are also looking at how to use technology to drive up ethical standards in the workforce, and to support diversity, equality and inclusion initiatives — including during recruitment. There is also the possibility of using technology to develop more sustainable products and services.