The COVID-19 pandemic has and will continue to change enterprises, organizations, and governments.
According to the 2021 KPMG CEO Outlook Pulse Survey, 31 percent of CEOs worldwide anticipated that a return to ‘normal’ would happen at the end of 2021, with only six percent of CEOs in Asia Pacific seeing a return to ‘normal’ by this year, and 59 percent envisaging that it will happen sometime in 2022. The same KPMG study also revealed that with 74 percent of CEOs felt the pandemic has accelerated the digitization of operations and the creation of next-generation models1. In essence, digital is driving the future and there is no going back.
Endless possibilities
With organizations and governments identifying, revisiting and evaluating the meaning of unexpected transformation and its impact, organizations continue to explore technological solutions such as:
1. Expansion of messenger RNA (mRNA) vaccination. With the development of this medical technology from Pfizer and Moderna, future vaccines are seeing the light of adopting this in combating other flu strains, Zika, HIV and cancer.
2. Non-contact interfaces. Not long ago, touchless and contactless devices and screens were an impressive feat, but due to the impact of virus transmission through touchable surfaces, it is foreseen that we’ll have more of these in the form of voice and machine vision interfaces. This also applies to various fintech platforms offering cashless payments and cashier-free or check-out free physical stores or groceries.
3. Digital infrastructure upgrade and fortification. With more people in a work from home setup and in isolation, the need for organizations to upgrade their technology infrastructure and fortify them to protect them from cybersecurity and IT risks is amplified. Even the Philippine government’s Department of Information and Communications Technology (DICT) has rolled out its four-point agenda with the following key objectives: (1) Safer, protected, and reliable ICT, (2) ICT-enabled government, (3) Greater public reach, and (4) ICT capacity development, along with two of its major programs for ICT infrastructure buildup: National Broadband Program (NBP) and the Free Wi-Fi for All Program. These government initiatives will help enterprises and institutions experience a more robust, accessible and secure infrastructure as they operate and go digital.
4. More digital activities. From online learning to digital events/conferences to online religious gatherings to e-sports, the shift to a digital space is undeniably gaining wide acceptance and will be here to stay.
5. Transition to automation. Manual tasks and activities will be reduced, and more organizations see the need to fast-track the transition to automated processes and controls. With the rise of low-code to no-code automation tools, robotic process automation and emerging technologies on internet of things, the way we work, live, play and learn will definitely be altered.
6. Data democratization. Given the various sources to collect and process data, data will be available for real-time access, analysis and reporting, which will improve the decision-making process. Although regulations on cybersecurity and data protection are also gaining traction globally, more organizations and governments will see the need to strike a balance between regulation and accessibility in order to promote data democratization.
7. Social architecture in technology landscape. With technology influencing our social interaction, lifestyle and behaviors, private and public enterprises will need to revisit their social architecture and how it intertwines with the technology landscape. This could be done in a micro and macro coverage, with better ways of managing workforce or citizens of a nation.
Challenges and roadblocks
As we adopt new technologies, it will come with challenges and roadblocks along the way, particularly as we move towards the post-pandemic environment. The following are some of what we should anticipate and consider:
1. Skills gap. In a recent study conducted by LinkedIn in its first edition of Future of Talent report, companies in the Philippine still prefer to recruit candidates with technical skills. It was even disclosed in a 2021 McKinsey report that 43 percent of companies are currently experiencing skills gap with the biggest area in data analytics at 43 percent and IT and web design at 26 percent. Also, in the 2020 (ISC) Cybersecurity Workforce Study, it was revealed that 56 percent of IT and security professionals feel that cybersecurity staff shortages are putting their organizations at risk. The swift actions of organizations to modernize IT and implement digital transformation will lead to specific skill requirements that organizations need to fill.
2. Data security and privacy. The KPMG 2021 CEO Outlook Pulse Survey showed that CEOs see cybersecurity risk as the greatest threat to their organizations’ growth with 52 percent expected to spend on cybersecurity and data protection.
3. Regulations. Different government regulatory bodies, agencies and units in the Philippines such as DICT, SEC, NTC, NPC, BSP and the BIR, among others, are now coming up with policies, guidelines and circulars to control and address risks brought by these technological innovations and platforms to the economy and general public. While it is expected that numerous benefits and opportunities come from these technologies, unexpected consequences from regulations and rules imposed may pose compliance risks that should be carefully assessed and studied.
4. Change management. Many organizations underestimate the power of managing change holistically, resulting to resistance from people, lack of direction and misalignment with the overall strategy and goals of the organization, making the digital transformation journey more challenging.
Key recommendations
Digital transformation is a top boardroom agenda and how organizations respond to it will affect the end goal. Thus, it is essential to revisit organizational strategies, business plans and models to reap the rewards of investments in digital technology. Here are some steps to take:
1. Embrace a digital-first mindset.
2. Accelerate investments on digital.
3. Approach an organization-wide method on digital transformation.
4. Put compliance at the heart of transformation projects.
5. Always think of people and corporate citizenship principles during transformation.
6. Revisit and address gaps on data sources and legacy systems, if any.
7. Adopt an agile approach to your innovation projects.
The future is full of unknowns, but as you navigate through it you will always go back to the basics of understanding the organizations’ components and silos, and connect the dots to enable unified linkages and direct it towards a single path that is responsive and adaptable to technological evolutions.
Gilbert T. Trinchera is a director of the technology consulting group of KPMG R.G. Manabat & Co. (RGM&Co.), the Philippine member firm of KPMG International.
This article is for general information purposes only and should not be considered as professional advice to a specific issue or entity. The views and opinions expressed herein are those of the author and do not necessarily represent KPMG International or KPMG RGM&Co.
For questions and inquiries, feel free to send a message through social media or ph-fmmarkets@kpmg.com.