“Technology unleashed!” It is what Anson Bailey, partner and head of technology (Hong Kong) and head of consumer and retail at KPMG China proclaimed during a fast-paced webinar.
Titled “TMT Global Trends: What to expect,” the discussion explored some key trends driven by COVID-19. TMT here stands for technology, media and telecommunications.
Business is no longer afraid of emerging technologies. If it helps to shore up business, engage their customers, keep their operations humming and help with their top and bottom lines, companies will adopt. Long trial periods are falling out of fashion.
“Because of the disruption, everyone has time to reset and re-look at a new strategy to find ways to navigate the crisis,” said Irene Chu, partner at KPMG, who sees technology playing a bigger role in these strategies.
They are not alone either. “Even governments are stepping in,” she added with Bailey noting the “new level of collaboration” across all sectors and governments spurred by COVID-19 having major implications in the years to come.
But worries about business fundamentals are still adding cold water to the tech celebration. Tim Zanni, KPMG’s global and U.S. technology sector leader and the global and U.S. head of TMT said that “it is still early days.” He echoed Chu’s thoughts that businesses will need to answer hard business and economic questions and see how technology fits their new business models. “But it is clear that technology is one area that businesses cannot ignore,” added Chu.
Within the technology space, Zanni sees the big five tech players and the global payment vendors recovering fast and improving their economic value because of the global affinity for digital. Telco companies and players like Alibaba and Tencent “will preserve their value and will be stable going forward.” In semiconductors, where foundries are built will now become a geopolitical issue.
Business will also become more software driven. With APIs, cross-platform capabilities, cloud dominance and 5G, “I think companies that are built on a software engine will thrive and increase their value,” Zanni observed. The fast response to customer needs and minimal customer acquisition costs are key reasons for this value increase.
Where there will be disruption and uncertainty will be in the hardware and media space. Competition and cross-border pressure will make life difficult for hardware companies.
Zanni is also uncertain how traditional centers of innovation will survive the “new normal.” “How these hubs will bring people together and work cohesively” is something that remains to be seen. He even suggested the emergence of micro hubs “popping up in the suburbs.”
Meanwhile, IoT adoption is enjoying the demand for connected technologies that underpin COVID-19 efforts, said Darren Yong, Asia Pacific head of client and market development and head of TMT at KPMG Asia Pacific.
“The implications of the way hardware and software interact will fundamentally shift the [business or consumer] value created. We will continue to see how technology will be integrated into the business model,” Yong added. He offered advances in telehealth, online education and how we watch sports as how this integration will shape the future.
Businesses are also a lot more concerned about resilience, after experiencing the dangers of a pandemic first hand. Fan Ho, Asia Pacific chief of staff and head of strategy at Lenovo agreed. She sees CEOs becoming more concerned about resilience.
To that end, solution providers like hers are recalibrating with new offerings. In Lenovo’s case, they are promoting device-as-a-service to help improve business resilience against operational disruptions and help companies recover.
“We are also all more virtual in the way we work, while we were technology led in the past,” said Yong. He explained that customer and employee engagement in the front end will now drive middle and back end transformation in the months to come.
“It is a human centric approach to driving change, rather than technology led transformation,” he adds.
One major opportunity that was constantly highlighted during the webinar is environmental, social and corporate governance (ESG). This is not only a call by activists but an increasing concern for employees.
“Employees will be holding their employers responsible for ESG and other issues surrounding COVID-19,” said Zanni.
“There are opportunities to acquire, and there is opportunity to go green. There was already terrific momentum before COVID. After [the pandemic] more employees expect robust ESG agendas from the employers,” he added.
Zanni believed the move toward an ESG-led business mandate will be done in “incremental steps” as they still need to answer a lot of fundamental questions.
Photo credit: iStockphoto/Alessandro Biascioli