Companies should view technological disruption in the same light as regulations, experts at KPMG have said, warning firms that are slow to adopt digital business model will lose market share.
Technology and data are transforming the way businesses are run, the consultancy and accountancy says, with firms investing heavily in keeping up with the latest advancements that are likely to stave off competition in the space they operate.
“Adoption of technology is not about the cost anymore. Cost really doesn’t matter. It’s about your brand that’s going to be impacted. It’s like regulation where you have no choice. You have to deal with it,” says KPMG East Africa’s partner and head of consulting Brian De’Souza.
Findings of a survey of 51 chief executives of large companies in East Africa, including 19 in Kenya, show that seven in 10 of the business leaders are prepared to radically transform their organisations through to a future where smart machines and talented people work together.
Eight in 10 of the CEOs in the KPMG survey, however, believe that Artificial Intelligence (AI), which includes the advent of robots and automation in workplaces, will create more jobs than it eliminates.
“Digital (system) opens up numerous opportunities for growth, and CEOs are optimistic about this,” KPMG said following the release of the 2018 ‘East Africa CEO Outlook’ report on Tuesday. “But with digital advancement and ‘big data’ comes responsibility and risk, both of which CEOs have expressed both an appreciation for as well as concern.”
The business leaders in the survey cited technological risks as a major threat to growth.
Cyber security has particularly become an area of focus for businesses with regulators such as Central Bank (CBK) of Kenya issuing guidelines.
The CBK rules, for example, require banks to formulate a policy, strategy and framework to fight the multi-billion-shilling cyber security threat at company level.
They are also required to elevate chief information security officers to senior managerial level to enforce cyber security policy and oversee implementation of the strategy.
“Although no legal framework for data protection exists across East Africa, 73 per cent of East African CEO’s feel that protecting customer data is one of the most important responsibilities of the CEO, in order to grow the customer base in the future,” KPMG says in the outlook report.
Only three in 10 CEOs in East Africa are confident the firms they lead are either “very well” or “well” prepared for a future cyber-attack, KPMG survey suggests.
The confidence levels are, however, highest among Kenyan CEOs at 70 per cent with Tanzanian counterpart least confident with only one in 10 believing that their organisation is well prepared to deal with a major cyber-attack.
Confidence levels in Ethiopia, Rwanda and Uganda are at 33, 25 and 20 per cent, respectively, according to KPMG’s findings. The report says cyber security poses a serious strategic, operational and reputational risks to companies, recommending that CEOs should consider and invest in new chief data and chief digital talents.