Report: Most business leaders don't feel prepared for technological change

Most business leaders are unprepared for the fourth industrial revolution, according to a new survey

There is a concerning lack of readiness for technological change within Australian organisations, according to KPMG Digital Delta.

In its 4th Industrial Revolution Benchmark Report, KPMG said most business leaders are unprepared for the fourth industrial revolution (4IR), and the convergence of the physical, digital and biological worlds.

KPMG Digital Delta surveyed 198 Australian business leaders, gauging their organisations’ uptake and understanding of technologies such as artificial intelligence (AI), robotic process automation (RPA) and the Internet of Things (IoT).

Produced in collaboration with global analytics platform, Faethm, it found most Australian business leaders lack a deep understanding or experience with the technologies, with 47 per cent having 'little' knowledge and 9 per cent having 'never heard of' the concept.

Less than half (46 per cent) of Australian business leaders feel their organisation is strongly prepared for technological change. On average, respondents rated the maturity of their organisation’s adoption of 4IR technologies below three out five.

"The rapid acceleration in the capabilities, usage and effects of AI, robotics, automation and machine learning represents a fundamental change in the way we live, work, and relate to one another. The lack of readiness among Australian organisations is concerning. Change is already taking place, and it’s critical that business leaders understand these technologies and how to harness them to remain locally and globally competitive," KPMG Digital Delta partner, Piers Hogarth-Scott, said.

This may be due, in part, organisations holding back their adoption of AI because of mistrust, potential bias and a lack of transparency and explainability. That at least is the findings according to another survey, this time by EY.

These key factors were identified by over 70 per cent of participants in a recent poll during an EY webinar as the biggest barriers to raising trust levels in AI, particularly in Australia. When asked about their AI journeys, almost one-fifth of those polled (18.8 per cent) expressed that they are exploring AI solutions that may be relevant to their industry. Despite the clear trend and gradual increased usage, the EY poll also shows that almost half of the polling participants (41 per cent) are interested in exploring AI, but are not sure where to start.

“Trust is the foundation on which organisations can build stakeholder and consumer confidence and active participation with AI systems. Across Asia-Pacific, governments and organisations acknowledge how AI technology can deliver increasing value and are experiencing life with AI, in particular facial recognition technology," EY Asia-Pacific intelligent automation leader, Andy Gillard, said. "With the risks and impacts of AI spanning across technical, ethical and social domains, introducing new mechanisms to address the unique risks of AI is needed, such as the development of frameworks and guidelines. 

“Dealing with AI solutions that span across different jurisdictions all with different privacy regulations and cultural norms of what is socially acceptable is not an easy task. To maximise the real value of AI, business leaders must first build trust with internal and external stakeholders to clear up doubts about the data being collected and used in their AI systems.”

In its report, KPMG noted many reasons for adoption of 4IR technologies, but customer experience (CX) improvements is the current key driver, at 75 per cent. CX is seen as the area of greatest impact on businesses (4.3 out of 5), over products and services, innovation, operating model (all 4.1) and workforce (3.9). Increased productivity (67 per cent), innovation (64 per cent) and process automation (62 per cent) are other key drivers of adoption.

However, about one-third of respodnents feel their staff do have the necessary skills to implement new technologies, one third feel they do not have staff with the necessary skills, and one third is unsure.

"While the approach to implementation depends largely on the business model and needs, a business-wide technology strategy is necessary to reach more mature levels of implementation," Faethm CEO, Michael Priddis, said. "Regardless of the industry and the position, life-long learning will be a necessary condition for future employment and companies that support strategy-building in this regard can add great value for businesses and employees alike.

"Without a clear company direction or dedicated resources, employees are unlikely to have a distinct career path to transition into the work of the future through upskilling or reskilling."

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