BUSINESS models continue to evolve as companies become more determined to implement emerging technologies such as Artificial Intelligence (AI) and 5G in a bid to outpace their competition. This has far-reaching implications not just in the way companies innovate within their own industries, but also in the way they disrupt and blur the lines between converging sectors.
Against this backdrop, KPMG’s Technology Industry Innovation Survey 2019 reveals that technology leaders around the world identified e-commerce platforms as the most disruptive business model over the next three years. This is followed by social networking platforms (22%), digital payment platforms (17%), entertainment platforms (14%), ride-sharing platforms (9%), autonomous transportation platforms (7%) and lodging platforms (4%).
KPMG’s survey also reveal technology leaders anticipate five industries to experience the greatest transformation as a direct result of emerging technologies, namely telecommunications; industrial manufacturing; healthcare/life sciences; aerospace and defence; and financial services.
“As the world becomes more connected and digitalised, we have seen a dramatic shift in the way we do business,” said Datuk Johan Idris, managing partner of KPMG in Malaysia.
“We used to only associate the term ‘tech company’ with the likes of companies that deal with information technology or hardware. But with the growing popularity of e-commerce platforms, digital payments and even ride-sharing platforms, this is no longer the case.
“Companies need to realise that technological and digital disruption is not a trend or passing phase. It is here to stay, and they should be seizing the opportunity to actively disrupt their respective sectors, and not just wait to be disrupted.”
According to Alvin Gan, head of IT-enabled transformation practice at KPMG in Malaysia, companies need to anticipate what the next phase of technological evolution will be so they can be in an optimum position to leverage from new technologies to achieve their business objectives.
He added: “It is about more than just having a digital strategy; companies should also increase the rate at which they are innovating. They should focus on implementing a business model that not only harnesses new technologies, but also creates new value propositions and competitive advantages. Companies should be carefully evaluating how new technologies can prove beneficial to their operations, rather than out of fear of being left behind.”
The survey also asked business leaders on the company they worry most about disrupting their business. Amazon (16%), Apple (16%) and Alibaba (15%) were ranked top three.
Both millennials and tech industry leaders have different ideas of who they see as leading innovation visionaries. Google CEO Sundar Pichai topped the list for technology leaders, whereas millennials within the technology industry idolised Tesla and SpaceX CEO Elon Musk.
Disruption can create significant opportunities for the companies which are willing to take advantage of it. KPMG recommends these steps for business leaders if they seek to reap the benefits of disruption:
- Regularly assess threats and opportunities emerging technologies and business models are creating in the market.
- Perform in-depth reviews of current strategies (including people, process, technology and third-party strategies) and assess its flexibility to adapt to disruption and maintain relevance to the future market.
- Stress test current strategies against competitive threats and market disruption.
- Conduct skills assessment to ensure the organisation has the right expertise and agility to execute the business strategy.
- Re-envision a business model that harnesses new technologies, creates new value propositions, and gains competitive advantages.
- Prioritise the adoption of new technologies that will enable the company to capitalise on long-term value.
- Re-design the board agenda to maintain ongoing focus on disruption, strategy recalibration, change management and execution. – Feb 17, 2020
