Smart technology investments are no longer about keeping up with competitors

In a rapidly digitizing world, business leaders are rethinking what makes a tech investment truly valuable. While competition used to be the primary driver behind digital initiatives, a new study reveals that modern decision-makers are focusing on conscious, value-driven technology strategies that extend far beyond financial gain.

According to KPMG’s newly released Global Tech Report 2024, 89% of businesses have successfully increased profits through technology over the past two years. But the most forward-looking leaders are now viewing digital transformation as a tool not only for boosting earnings but also for achieving long-term business, sustainability, and social goals.

A Shift from Herd Mentality to Deliberate Action

Despite fears surrounding the fast pace of technological change, companies are making tangible strides—particularly in AI, Everything-as-a-Service (XaaS), and cybersecurity. Yet, the anxiety of falling behind often leads to rushed decisions and fragmented investments. Experts caution that the desire for innovation should not cloud sound business judgment.

Interestingly, while competitors remain a key benchmark for 82% of organizations, they’re now ranked only as the third-most influential factor in tech investment decisions. Leading factors include advice from independent consultants (89%) and rigorous in-house testing and validation processes (83%).

Investments That Deliver Real Value

The vast majority of companies report positive outcomes from their digital initiatives:

• 87% have seen profitability gains,
• 72% believe their digital decisions create tangible business value,
• 59% report profit increases of at least 11% within two years.

Top-performing organizations are notably more proactive, with 53% regularly reviewing their tech portfolios to ensure alignment with long-term strategic goals, compared to just 41% of businesses overall. Furthermore, 70% of leaders expect their technology investments to deliver social and environmental benefits alongside financial returns.

The Hidden Cost of Technical Debt

While AI and cloud technologies attract the spotlight, aging IT infrastructure remains a persistent issue. 57% of companies face regular operational disruptions caused by outdated systems. Balancing innovation with infrastructure upkeep is critical—neglected systems not only increase operational risk but also inflate long-term costs.

Data Maturity as a Competitive Edge

The report highlights a significant leap in data maturity. 52% of businesses now operate at advanced, data-driven levels, up from 40% the previous year, with cloud platforms playing a pivotal role. Frequent, data-based evaluations are a hallmark of the highest-performing organizations, ensuring that technology initiatives deliver measurable business outcomes.

AI: Productivity Boost with a Side of Uncertainty

AI’s potential to transform knowledge work is clear: 74% of companies say it’s already improving productivity, while 80% anticipate it will free employees to focus on creative, strategic tasks. Yet, AI’s opaque decision-making processes and ethical implications remain a concern. 78% worry about the so-called “black box” nature of AI, and 77% fear its disruptive impact on business operations.

To address these risks, frameworks like KPMG’s Trusted AI recommend ten principles for safe and ethical AI deployment—including fairness, privacy, accountability, and sustainability.

Collaboration Over Control

When it comes to implementing AI, collaboration wins out. A striking 94% of organizations are running pilot projects involving cross-departmental teams, often supported by AI centers of excellence. Only 6% rely on rigid, centralized control structures.

Companies that successfully articulate the business value of AI and foster collaborative engagement across teams are far more likely to achieve organization-wide transformation.