Dive Brief:
- About eight out of 10 companies are struggling to keep up with rapid technological changes in the age of artificial intelligence, with financial constraints being a major stumbling block, according to survey findings published Tuesday by KPMG.
- More than half (56%) of organizations often feel like they don't have the budget to keep pace with such changes, the Big Four accounting firm said in a report on the findings.
- “AI is constantly evolving, putting pressure on businesses to outpace the disruption as they scale their AI-driven transformations across their organization,” Steve Chase, vice chair of AI and digital innovation at KPMG U.S., said in a press release. “Leaders should be investing in capabilities that will be crucial for long-term success, particularly workforce readiness and data modernization.”
Dive Insight:
Corporate technology investments are surging amid recent advancements in AI.
The size of the generative AI market in particular is poised to reach $1.3 trillion by 2033, up from just $40 billion in 2022, according to a 2023 report by Bloomberg Intelligence. Companies like Amazon Web Services, Microsoft, Google and Nvidia could be the biggest beneficiaries, as enterprises shift more workloads to the public cloud, it said.
Along with the potential benefits of the nascent technology, business leaders are also grappling with some of the challenges of adoption. This includes accurately predicting the potential costs of an AI deployment ahead of time as well as measuring the return on investment in the post-implementation phase, Gartner analysts said in May at the research and advisory firm’s 2024 CFO and Finance Executive Conference in National Harbor, Maryland.
“Given how new AI is, we don’t really know how much it costs, and are learning as we go,” Gartner’s Nisha Bhandare said at the event.
In discussions with clients, Gartner consultants have found that AI cost estimates were off by as much as 500-1,000% in some cases, she said.
The KPMG study found that most U.S. organizations prioritize adopting new technology to deliver new value into their business models. Yet 58% of respondents said their organization faces weekly disruptions due to flaws in their legacy systems.
The survey also highlighted the positive impact of digital transformation efforts on profitability and performance. Eighty-eight percent of respondents reported improvements in these areas as a result of their digital transformation initiatives, compared with 45% in 2023.
“In my experiences with enterprise-wide transformations, the most successful that see long-term financial returns are those that relentlessly focus on sustainable value creation, prioritize people and culture and invest in the right technology and data foundations,” Atif Zaim, consulting leader at KPMG U.S., said in the Tuesday release.
KPMG surveyed 400 U.S.-based executives at companies with revenues of $250 million and above.
