Why risk managers worry about slow tech adoption
The introduction of any new technology poses many risks. Will it work as intended? Does it compromise security? Could it lead to errors that end up harming the organisation?
However, failing to adopt the latest technological innovations is also a serious concern for risk managers, according to a study from KPMG Enterprise. With digital solutions having an increasing impact on businesses, the professional services company warned that mid-market companies risk being left behind by being overly cautious.
Mid-market firms taking a tentative approach to tech
In its new Digital to the Core report, KPMG revealed that while the majority of mid-market organisations are prepared to invest in digital technologies, most are doing so in a tentative manner. Indeed, seven in ten mid-tier executives said they intend to bolster their tech investment, but only one in six identified themselves as ‘digital pioneers’ – people who strive to stay at the cutting edge of new tech.
In contrast, a quarter of respondents fitted into the category of ‘digital reactionaries’ (people playing catchup with digital), while one in seven identified as ‘digital sceptics’ (cautiously evaluating digital innovations, preferring to move slowly and ensure that the right investments are being made). The remaining third – ‘digital adopters’ – said they preferred to wait until new digital technology is well established, but then moved fast to adopt it.
Why are mid-market businesses cautious about digital?
While the majority of businesses surveyed by KPMG were worried about moving too quickly when taking advantage of new tech, their reasons for acting in this manner varied significantly.
KPMG identified six common barriers to the adoption of new tech:
- Difficulty attracting staff with the requisite skills (cited by nine per cent of respondents)
- Lack of support from key business decision-makers (ten per cent)
- Insufficient investment (14 per cent)
- Limited understanding of new technologies and digital opportunities (14 per cent)
- Lack of a unified digital strategy and vision across the organisation (19 per cent)
- Implementation challenges with rolling out and embedding new tech (21 per cent)
Nathan Beaver, customer and growth director at KPMG Enterprise, acknowledged that organisations face a major challenge in rethinking operating principles, customer experience and potentially their entire operating model in order to pave the way for new digital solutions.
However, he warned that simply failing to act was not the answer: “There is nothing inherently wrong in waiting for technology to be proven but, in the fast-paced world of digital, this can leave companies on the back foot, raising concerns about future competitiveness.”
What’s the solution?
Having highlighted the pitfalls that lie ahead for organisations that continue to drag their feet on new tech adoption, KPMG has drawn up three key digital objectives for mid-tier companies to focus on:
- Simply step up the pace of adoption, to avoid being left behind and challenged by new – or even yet-to-be-formed – digital early adopters
- Take full advantage of digital to ensure greater value for customers through the development of improved insights across the channels to market. This will ultimately lead to the creation of new, innovative and more relevant products and services
- Draw up an agile plan for digital adoption to capitalise on the speed of digital change and eradicate the traditional waterfall model of project and change delivery
Effectively, organisations have to accept that digital is here to stay, and that the most successful businesses will be those that have the best understanding of new technologies and know how to take advantage of them.
As Nathan Beaver explained: “Digital is here to stay. The pace will only accelerate and intensify as new technologies come online and digital disruptors encroach on industries. Businesses must innovate or risk being left behind.
“The UK’s mid-tier companies have the potential to be world-beaters in the digital arena. Many of them have specialised products or services that can be brought to global markets thanks to the power and reach of today’s customer channels. By putting digital at the core of their strategies, businesses can target new growth opportunities and get closer to their customers.”
Our 2015 Mid-Year Report combines a review of the prevailing conditions in the risk management recruitment market with the results of a comprehensive compensation survey covering both permanent and contract risk managers.