Posts Tagged ‘KPMG’
Wednesday, March 6th, 2013
The technology, financial services and healthcare sectors, among others, expect an increase in their companies’ or clients’ deal activity in 2013 compared to 2012. according to a survey conducted by KPMG LLP, the U.S. audit, tax and advisory firm.
Smaller, mid-market deals are driving the trend because they’re simpler to execute, but other dynamics contribute. Many firms have plenty of cash on their balance sheets and favorable credit terms are available.
Of the more than 400 survey respondents, 60 percent said that they would do more deals this year than last year.
The simpler financing terms associated with smaller deals, as compared to both large transactions and the megadeals, will drive middle-market M&A activity in the balance of 2013, according to 24 percent of the poll population.
Smaller, mid-market deals driving activity
However, 49 percent of respondents felt that collectively, simpler financing terms, fewer risks and integration challenges, as well as the less complexity of due diligence that’s needed for deals valued under $250 million, will serve as the catalyst for a deal market dominated by middle-market activity in 2013.
In fact, 22 percent of survey respondents indicated that in 2013 thus far, the deal market is already experiencing a high volume of middle-market activity; they also acknowledged favorable credit terms (11 percent) and elevated levels of cash on corporate balance sheets (eight percent) as driving the recent deals in the marketplace.
Corporate buyers have the advantage in the M&A space over private equity buyers (six percent) halfway through the first quarter of 2013.
Underlying fundamentals improving
“The underlying fundamentals in the deal market are improving, with the combination of a stabilizing U.S. economy, favorable credit terms, open debt markets, and high cash balances paving the way for an increase in M&A volume this year,” said Dan Tiemann , Americas lead for KPMG’s Transactions & Restructuring practice.
“As a result, companies may be highly motivated to execute transactions that drive their growth agendas, including deals that allow for business transformation and optimize new operating models.”
Effect of new regulations
When asked what effects new regulations might have on their ability to do deals in 2013, 21 percent of the poll population stated that they will cause integration challenges during the M&A process and in post-deal phases for their companies and clients.
Eighteen percent cited that new regulations have temporarily delayed their ability to do deals, followed by seven percent who have delayed M&A activity indefinitely; however, another seven percent cited they will actively pursue deals because of new regulation.
The breakdown of respondents includes M&A professionals in the following sectors: technology (17 percent); financial services (17 percent); healthcare (14 percent); diversified industrials (nine percent); energy (eight percent); and consumer markets (seven percent).
Wednesday, February 6th, 2013
The benefits of cloud computing have been much touted, but many companies are finding higher than expected costs and challenges in implementing, operating and governing cloud use, says a survey from KPMG International.
The KPMG survey, The cloud takes shape, polled more than 650 business and IT leaders across 16 major global markets and found more than half of the organizations already working in the cloud. However, the survey found about one-third of respondents said the costs of moving to the cloud were higher than expected, and a similar number noted significant implementation challenges.
Rick Wright , KPMG’s Global Cloud Enablement Program leader, said it appears some companies are only focused on the technology aspects of cloud to the detriment of their core business goals.
“One of the most important lessons uncovered by this research is that business process redesign needs to be done in tandem with cloud adoption, if organizations hope to achieve the full potential of their cloud investments,” said Wright, a partner with KPMG LLP, the U.S. audit, tax and advisory firm.
Process redesign necessary
“Simply put, executives have found that simultaneous process redesign is central to addressing the complexities that often arise in the implementation and operational phases of cloud adoption.”
According to KPMG’s analysis of the survey data, business executives are moving past cost savings as a final goal for operating in the Cloud. Wright explained that other long-term benefits can include more efficient overall processes, flexible operating models, and faster speed to market.
KPMG’s survey noted that two of the top three cloud objectives identified by more than 20 percent of business executives were to enhance new market entry and drive business process transformation.
Develop a more strategic approach
Although companies are finding Cloud to prove more than an IT cost reduction tool in the long run, a more strategic approach needs to be developed at the outset to realize the proper benefits, especially as organizations move more of their core and sensitive data and processes to the Cloud, according to the survey.
“When thoughtfully implemented, many providers could actually offer robust and resilient security measures and controls that could enhance overall security in the cloud,” said Greg Bell , a U.S. principal and services leader at KPMG LLP. “Functions that – until just recently – were considered too sensitive or complex for Cloud are now being put on the table.”
The report highlighted specific aspects of cloud implementation that can significantly impair or enable an organization’s ability to reap its rewards. These include:
- Security: Cloud adoption should improve, rather than weaken, security concerns. Nevertheless, more than one-quarter of the companies surveyed have found that security-related challenges can be extensive and are a prime example of where business executives and IT need to work together to create a cloud security strategy.
- Regulation: In many cases, companies said that while regulation is not hindering cloud implementation, they are working proactively to address future legal and regulatory requirements.
- Tax: Organizations are approaching the tax structure of Cloud deployment strategically and are even finding a cloud environment can make a significant difference to the company’s tax position and bottom line.
“We see time and again that the federal, state and international tax implications of various Cloud deployment approaches can significantly impact an initiative’s ultimate ROI,” says Steve Fortier , Cloud Enablement lead for Tax at KPMG. “Bringing the tax department into discussions early can help companies avoid missing out on cost-saving opportunities or inadvertently creating significant tax risks.”
“Considering a strategic approach is necessary to focus on core business goals while moving portions of the organization into a cloud environment, organizations should also look to leverage the opportunities for business transformation and change management that can occur as a result of a move into the cloud,” added Wright.
Monday, January 28th, 2013
Nearly 60 percent of U.S. consumers still prefer to watch their favorite shows and video programming on their TVs, but they also want their smart phones and tablets by their side so they can be online and multitask, according to the KPMG International 2013 Digital Debate survey, which polled more than 1,000 consumers in the U.S. and 9,000 globally.
In the U.S., 42 percent of consumers polled say they watch TV and access the internet via a laptop or PC, while 17 percent watch TV and access the internet via a smartphone. The study also found that 22 percent watch TV and use a social networking site at the same time.
Personally, here at the TechJournal, if we’re awake, we’re online. We nearly always have one or more digital devices at hand while watching TV or listening to music, these days. We also access our Internet video services – Netflix, YouTube, and others, via an app enhanced DVD player.
Some prefer watching on a mobile device
While traditional media is still most popular with consumers for viewing video programming, the study revealed that in the U.S. 14 percent of those polled prefer to watch TV via their mobile or tablet for greater flexibility. This is largely attributed to the emerging wave of mobile-centric consumers (25-34 years old).
“The move to digital has had a dramatic impact on how we consume music, publishing and newspapers. But we are still early in the process of a transition to digital anytime-anywhere availability across all media sectors,” said Paul Wissmann , national leader of KPMG’s U.S. Media & Telecommunications practice.
“The introduction of smart TVs is an indication of how the digital transition is accelerating to coincide with the demand of today’s consumers to access anything, anywhere and at anytime. The smart TV is beginning to reveal itself as the next disruptor,” Wissmann said.
Some of the key highlights of the survey include:
In the U.S.:
- 40 percent own or intend to own a smartphone in the next 12 months, compared to 53 percent globally.
- 26 percent own or plan to purchase a tablet over the next 12 months, which is the same percentage globally.
- Spending for online media increased in the past year. For every type of digital media, more respondents increased their spend than decreased it.
- Traditional media spend still is strong in the U.S., especially for TV.
Thursday, September 20th, 2012
Is Google the “World’s Most Attractive Employer?”
It is for the fourth consecutive year according to the preferences of over 144,000 career seekers, with a business or engineering background from the world´s 12 greatest economies. So says the Universum global talent attraction index: “The World’s Most Attractive Employers 2012″.’
KPMG keeps the second place and Procter & Gamble is now on the third position.
Here at the TechJournal, we find it interesting that Apple shows up on in the 8th spot on the engineering employer list.
“The Google fever is still hot! Students are attracted by Google´s relaxed and creative work environment, international atmosphere and innovative products. Google offers great benefits and opportunities that are hard for other companies to match.” says Petter Nylander, Universum’s CEO.
Also in the engineering category, Google takes the first position for the fourth consecutive year and is followed by IBM and Microsoft.
“The giants in the software industry are seen as great places for the launch of an engineering or IT career. They offer training, networking and future career possibilities. Moreover, they are global,” says Nylander.
World’s Top 10-Business
- Google (1)
- KPMG (2)
- Procter & Gamble (7)
- Microsoft (6)
- Deloitte (5)
- Ernst & Young (4)
- PwC (3)
- J.P. Morgan (9)
- The Coca-Cola Company (12)
- Goldman Sachs (10)
World’s Top 10-Engineering
- Google (1)
- IBM (2)
- Microsoft (3)
- BMW (4)
- Intel (5)
- General Electric (8)
- Siemens (9)
- Apple (7)
- Sony (6)
- Procter & Gamble (10)
In parenthesis is the company’s position in 2011. For the full ranking, go to http://www.universumglobal.com/IDEAL-Employer-Rankings/Global-Top-50
Wednesday, March 28th, 2012
Optimism for higher revenues, profits and new business in the coming 12 months hit record levels among U.S. manufacturing- and service-industry executives polled in KPMG International’s latest Global Business Outlook survey.
This is good news for the economy in general. When the manufacturing and service industries thrive, they buy marketing services, advertising, digital devices, management and operations software, and hire. KPMG notes it has already seen an uptick in capital spending on growth, IT, analytics and innovation.
No one in business the last four years is unaware of how fragile the U.S. economy’s attempts at recovery have been and gas prices are still a headwind, but week after week here at the TechJournal we see increasing signs of a recovery gaining steam.
Expectations for increased business activity hit the highest level among U.S. service executives and second highest among their manufacturing counterparts since the tri-annual poll began measuring U.S. business sentiment in October 2009.
“A positive economic mood has clearly taken hold among the nation’s manufacturing- and service-sector leaders,” said Lynne M. Doughtie, vice chair – Advisory for KPMG LLP, the U.S. audit, tax and advisory firm. ”U.S. manufacturing executives are more upbeat than their global counterparts, while overall optimism for increased business activity among U.S. service providers is second only to Brazil.”
Globally, nearly 84 percent of manufacturing respondents to the February 2012 survey said business activity would rise or remain the same in the coming 12 months, while 89 percent of service-sector respondents said activity would be higher or remain the same. By comparison, 94 percent of U.S. respondents the same or higher levels of activity, while more than 99 percent of U.S. service-sector executives expected the same or higher business activity.
Higher revenues expected
Doughtie pointed to a significant increase in U.S. executives’ expectations for higher revenues in the coming 12 months, with 70 percent of manufacturing executives and 71 percent of services executives in February saying that they expect increases in revenues, compared with 49 percent and 52 percent, respectively, when the survey was last taken in October 2011.
Globally, 52 percent of both manufacturing and service-sector respondents expect higher revenues, both still relatively strong.
Similar jumps occurred when looking at profitability, with 69 percent of manufacturing executives and 62 percent of services executives expecting to see higher profits, compared with only 43 percent and 47 percent, respectively, in October. By comparison, 46 percent of manufacturing sector respondents expect higher profits in the coming 12 months, and 45 percent of service executives expect higher net in the coming year.
Hiring Expectations Trending Positive
Doughtie said the survey also shows that the rosier outlook may spur hiring. More than 92 percent of U.S. manufacturing executives said they expect hiring demand to increase or remain the same in the next 12 months, up from 89 percent in October. This includes 37 percent who expect hiring to increase, up from 30 percent.
Service sector executives are similarly positive, with more than 96 percent expecting hiring to increase or remain the same, up from 92 percent in October. This includes 33 percent predicting hiring will increase, up from 27 percent.
Adopting a U.S. Growth Agenda
“Our interaction with U.S. executives in the market confirms the expectation of better times ahead,” said Doughtie. “But while we are seeing many companies taking a deliberate path toward a growth agenda, they remain cautious and have maintained a great deal of focus on achieving compliance in this increasingly complex regulatory environment.”
Among U.S. manufacturing executives, more than 32 percent expect higher levels of capital spending in the coming 12 months, compared with just 19 percent in October and 22 percent in June.
The survey’s record high (35 percent) for those expecting an increase in capital spending came in June 2010.
Companies upgrading IT, analytics, innovation
Significantly, the number who expected continued levels of capital spending was 52 percent in February, compared with 60 percent in October and 56 percent last June. Just 8 percent of manufacturing executives anticipate lower capital spending in the coming 12 months.
“We have seen a distinct uptick in capital spending, as companies set their sights on growth,” said Doughtie.
“Companies are upgrading IT, investing in transforming their organizations to seize new opportunities, improving regulatory compliance, and finding new ways to analyze their customer and market data to generate innovations that may mean anything from new product lines to new delivery models or even serving a new or different type of customer.
“Interestingly, in the services sector, which can be an early warning of a downturn and a lagging indicator of improved market conditions, none of the U.S. respondents expects lower profits this year, the first time any of the 12 countries analyzed in the Services Sector portion of the survey were confident enough that none expected net income to slip,” said Doughtie. “That certainly speaks to the potential direction of the marketplace.”
Overall findings from the February poll of manufacturing executives from 17 countries and service sector executives from 12 countries in more than 11,000 companies found that U.S. sentiment
Tuesday, March 27th, 2012
The coming data explosion including the shift to mobile commerce (m-commerce) services and other transformative technologies is expected to have a big impact on revenue leakage among the world’s major telecommunications companies, according to a global survey from KPMG International.
See this Wikipedia article for a quick tutorial on revenue assurance and revenue leakage.
Ninety-four percent of operators surveyed expect revenue leakage to increase as a result of these rapidly emerging technology trends and nearly half believe the impact will be significant.
Seventy-four percent of respondents said that the transformation to m-commerce such as mobile banking is the trend most likely to impact the telecoms industry, followed closely by converged services (71 percent).
New, independent revenue will be major leakage source
New independent revenue streams and the associated network and billing systems for these services will be a chief source of leakage, said respondents. Those areas most vulnerable to leakage and fraud are the revenue streams with the largest volume of payments including prepaid, roaming and postpaid plans.
“The pressure on the revenue assurance function to detect and prevent leakages and recover losses has never been greater,” said Carl Geppert, Global Telecommunications & Advisory Lead and a partner in KPMG LLP, the US member firm of KPMG International.
Yet only half of telecom companies globally have tied revenue assurance performance to senior management pay. A fact Geppert said needs to change.
“If we want revenue assurance to be taken seriously at the very highest levels, we must be prepared to incentivize senior executives for targets such as leakage prevention, detection and recovery,” said Geppert.
“Currently, most organizations have established leakage thresholds with the associated key performance indicators at the operational level, but that accountability has yet to be fixed at the management level.”
Survey data for Europe and the Americas, both of which have seen an increase in prepaid and data services, reveals that leakages of over 1 percent of revenues have more than doubled from the 2009 survey, while globally the number of telecom companies reporting that amount of leakage has declined.
“Currently most revenue assurance teams ultimately report to the CFO, who is a powerful sponsor to get things done,” said Geppert. “However given the volume of fraud and revenue leakage in the industry, the function should also have broader visibility at the very top of the organization.”
The revenue assurance function’s success rate at identifying leakages varies from region to region: 41 percent of respondents saying that they failed to identify more than half of total leakages, with Europe and the Americas ranked highest in spotting leakages.
Asia Pacific was the lowest with 26 percent spotting less than 10 percent of leaks. The rate of recovery is nearly the same with just 40 percent of respondents successfully retrieving more than half of all losses from subscribers and suppliers.
Friday, January 6th, 2012
Auto execs think it will be a decade before electric cars reach 15 percent of annual global sales
Despite continued heavy investment by auto makers in electric propulsion technologies, global automotive executives don’t expect e-car sales to exceed 15 percent of annual global auto sales before 2025, according to the 13th annual global automotive survey conducted by KPMG LLP, the U.S. audit, tax, and advisory firm.
In polling 200 C-level executives in the global automotive industry for the 2012 automotive survey, KPMG found that nearly two-thirds (65 percent) of executives don’t expect electrified vehicles (meaning all e-vehicles, from full hybrids to FCEVs) to exceed 15 percent of global annual auto sales before 2025.
Executives in the U.S. and Western Europe expect even less adoption, projecting e-vehicles will only account for 6-10 percent of global annual auto sales.
“Electric vehicles are still in their infancy, and while we’ve seen some recent model introductions, consumer demand has so far been modest,” said Gary Silberg, National Automotive Industry leader for KPMG LLP. “While we can expect no more than modest demand in the foreseeable future, we can also expect OEMs to intensify investment, fully appreciating what is at stake in a very competitive industry.”
Automakers Inject Investments into Range of Electric Technologies
Despite the relatively modest sales projections for electric vehicles over the next 15 years, automotive executives in the KPMG survey indicate that a wide range of electric technologies will be an increased focus of their investment matrix. In fact, over the next two years:
83 percent say automakers will increase investment in e-motor production,
81 percent say investment in battery (pack/cell) technology will rise,
76 percent expect increased investment in power electronics for e-cars, and,
65 percent predict increased investment in fuel cell (hydrogen) technology.
Additionally, executives expect that hybrid fuel systems, battery electric power and fuel cell electric power will be the alternative propulsion technologies to attract the most auto industry investment over the next five years.
Placing Bets ‘Across the Board
“What’s interesting is that automakers are placing bets across the board, and large bets at that, because no one knows which technology will ultimately win the day with consumers,” added Silberg.
“In last year’s KPMG survey, execs told us it would be more than five years before the industry is able to offer an electric vehicle that is as affordable as traditional fuel vehicles for mainstream buyers. It will be interesting to see how consumer adoption progresses as automakers discover ways to offer these electrified cars at better price points and the infrastructure for these vehicles becomes more robust and accommodating,” he said.
However, despite all the investment and energy being focused on electric platforms, nearly two-thirds (61 percent) of executives say the optimization (so-called downsizing) of internal combustion engines (ICE) still offers greater efficiency and CO2 reduction potential than any electric vehicle technology based on the current energy mix.
No Clear Electrified Propulsion Winner Yet
When asked to name the electrified propulsion technology that will attract the most consumer demand until 2025, auto executives were as mixed as their projected investments. In fact, the variation in response rates between fuel cell electric vehicles (20 percent), battery electrified vehicles (16 percent), full hybrids (22 percent), plug-in hybrids (21 percent), and battery electrified vehicles with range extender (18 percent) was ever so slight.
According to KPMG’s Silberg, “The industry faces a tough decision about whether to place more trust and resources in fuel cell or battery vehicle concepts, and these results show that it’s way too early to call right now. Clearly hybrids, whether plug-in or full, are more mature and have more market presence, but this battle for the dominant technology platform will continue for years to come.”
Monday, December 19th, 2011
While semiconductor industry executives note the rise of the United States as the second most important market for growth, behind China, their revenue and profitability growth expectations overall are down from a year ago and they do not plan to hire as many people, according to a global survey conducted by KPMG, the U.S. audit, tax and advisory firm.
In KPMG’s Seventh Annual Global Semiconductor Industry Survey, 41 percent of the semiconductor executives surveyed expects that revenue will grow by more than 5 percent next year, compared with 78 percent a year ago, and 87 percent in 2009.
They also see less growth in profitability, with 30 percent anticipating profits to increase by greater than 5 percent over the next 12 months, compared with 37 percent last year.
Industry pausing for breath
In addition, this year the Semiconductor Business Confidence Index, a metric based on survey data, measured 46, compared to 60 in 2010 and 61 in 2009. The confidence index has risen from 36 in 2008, indicating that forecasted industry conditions entering 2012 will not be as severe as the beginning of 2009.
“It is not unexpected to see the industry take a breath after two strong years following the economic and industry downturn,” said Gary Matuszak, KPMG Global Chair for the Technology, Media and Telecommunications practice. “Executives continue to pursue their growth agendas, and will be acquisitive, but remain very apprehensive about the direction of the economy.”
In fact, in the KPMG survey, capital spending, R&D spending, and hiring are at lower levels than prior years. Just 27 percent, compared with 46 percent a year ago, anticipate capital spending to increase by more than five percent. Thirty-three percent expect more than a five percent rise in R&D spending, compared with 47 percent a year ago. And 19 percent of the respondents predict workforce growth of greater than 5 percent, compared with 29 percent in 2010.
U.S. Market Growing In Importance
Semiconductor executives continue to note the increasing importance of the U.S. market.
Consider that in 2008, 38 percent of the executives felt that the U.S. was an important market for revenue growth, behind China (79 percent), Taiwan (44 percent) and Japan (40 percent). In each subsequent year an increasingly greater number of executives named the U.S. as an important market.
Today, 50 percent, as compared with 47 percent a year ago, view the U.S. as important, second to China, at 60 percent, with Japan ranked third, at 37 percent.
“Wireless, computing and consumer applications are providing the strongest demand for semiconductors, and with retail sales strengthening, especially during the peak holiday season, the U.S. consumer is showing an appetite for the latest and greatest,” said Ron Steger, partner in charge, KPMG Global Semiconductor Practice.
“China’s decrease in importance might be the result of the Chinese government’s tightening in lending but it is clear that the industry sees the China and U.S. markets as the two most significant global end markets for growth.”
The KPMG survey respondents were also asked to rank the importance of application markets in driving revenues.
The top driver of current revenue growth for 2012 was wireless handsets and other wireless communications devices again. However, computing has become the second most important driver, followed by consumer products, a switch in positions from last year’s survey.
Also of note is the rise in alternative/renewable energy (solar, thermal, battery technologies) and medical application markets, although both are still at relatively low levels. “Worthy of note is that the respondents appear to be signaling that conditions in the renewable energy market may be bottoming out, a positive data point,” said Steger.
In other survey findings:
- Sixty-four percent of semiconductor executives believe that global semiconductor revenue will be impacted 3 percent or more by counterfeit technology, including a third who said the impact will be 5 percent or more.
- To combat counterfeiting, the top three actions by companies are deploying more sophisticated identification technologies, providing detailed testing protocols and enhancing product return testing programs.
- More than a third of the respondents said there will be an increase over the next 12 months in the number of semiconductor intellectual property (IP) infringement cases in which their company is involved.
Friday, December 9th, 2011
While consumers – who are spending more and more time using digital media for shopping and entertainment – remain wary of being tracked or bombarded with ads, many say they would allow retailers and content providers to track their activity, or solicit them with advertisements, in return for discounts on products and services.
So says the 5th Annual KPMG Consumers & Convergence study. The wide-ranging study has a wealth of information crucial to digital marketers.
It points out that some security reservations and usage preferences exist, but the increased adoption of digital business models provides a compelling argument for retailers, content providers and advertisers to conquer the digital divide.
“Consumers are in the driver’s seat,” said Mark Larson, KPMG’s global retail practice leader.
Discounts persuade more than half
“They continue to be guarded about invading their space and wish to dictate their terms of access. It is imperative for these companies to use data analytics to leverage the customer data they have at their disposal to conduct customized consumer outreach. We see some retailers adopting these strategies online to offer customer product suggestions, coupons, and mobile shopping applications, among other programs.”
In reviewing the habits of U.S. consumers using internet, phone and cable, KPMG found 52 percent say they would be willing to let usage patterns and personal information to be tracked by advertisers if this resulted in lower product costs or free online content.
In addition, 43 percent are willing to receive advertising in exchange for lower fees or service. Consumers aged 16-34 are more inclined to permit both tracking and advertising, compared to those above age 34.
Provide compelling reasons
In looking at mobile phones, only 28 percent said they would be willing to receive such advertising for a lower fee. Again, younger adults were more likely to consider an exchange, 35 percent compared to 21 percent for older adults.
While older adults would consider an exchange for retail discounts, younger adults are more inclined to do so for entertainment.
Larson added, “I think these findings send an important message to retailers – providing compelling reasons for consumers to share information about themselves is going to determine the winners and the losers in digital commerce. The more targeted and tailored the interaction is with the consumer, the more effective it will be.”
The KPMG survey also found that security and privacy concerns exist when using a mobile device. For example, 43 percent are very concerned about the potential for credit card information to be intercepted, 41 percent about the threat of unauthorized parties accessing personal information, and 40 percent receiving unsolicited promotional material.
As to whom they trust most in keeping their personal and financial data secure when making an online purchase, 53 percent said a financial institution, 29 percent said a service internet payment system, and 11 percent said an online retailer.
“There is a high level of consumer concern regarding security and privacy, particularly when using new services or technologies,” said Paul Wissmann, KPMG’s National Sector Leader for Media and Telecommunications.
“With an ever expanding array of online services and devices, consumers are constantly being given new options to choose from. The goal for providers is to enable consumers to get what they want, when they want it at the same time feeling that their privacy is maintained.”
Yet, despite the wariness, 52 percent in the KPMG survey said they would be willing to let usage patterns and personal information to be tracked by advertisers if this resulted in lower product costs or free online content, with younger adults more inclined to let advertisers track them.
“Many companies are now looking for ways to collect more valuable customer data from their digital business offerings,” said Wissmann. “Companies can collect a wealth of consumer information, but they must collect data that is compelling while navigating the consumer privacy concerns, otherwise they risk consumer backlash from being exploited for their personal data.”
Products consumers most likely to shop for digitally
According to the KPMG study, consumers clearly indicate that there are certain products and services that they are more willing to shop for online or via mobile device.
In fact, among the products consumers say they are most inclined to shop for digitally are: flights/vacations; physical personal media (CDs, DVDs, Books, video games); electronics; and toys. The items least likely to be purchased digitally are food and groceries; luxury goods; and furniture.
According to KPMG’s Larson, “The integration of the various channels is becoming increasingly important to retailers as they begin to see many of their consumers move to online and application-based purchases.”
The KPMG survey found most people shopping on-line each day, with 42 percent of young adults saying that they spend more than one hour at it.
When it comes to retail shopping online or via mobile, consumers say they are most often using smart phones or tablets to locate stores, research products, get on-line coupons, and scan barcodes for product information.
“Mobile innovations are rapidly capturing the imagination of consumers and changing the business models for retailers,” added Larson.
When asked about factors that were most influential when buying products or services, consumers in the KPMG study indicate that social networks and blogs are least influential. Conversely, consumers said they are strongly influenced by manufacturer or store customer feedback and ratings online (46 percent), followed by 35 percent who said a manufacturer or store web site.
Dollars dictate digital consumption and service
For content and service providers, only 19 percent of consumers currently say they pay to access content on websites. The survey results found that younger adults are more willing to make purchases across a wider landscape of purchases that includes video, music, news, travel and books.
Eighty-one percent do not pay to access any content, and 77 percent said they would not be willing to pay if a site began charging for access to previously free content, a view that was consistent across all age groups. However, 55 percent of those paying for content said their access started as a free trial that they later decided to purchase.
As to marketing to consumers by mobile and Internet providers, price continues to be a key factor. Fifty-one percent of consumers said that price was the top factor in determining changing mobile service providers, followed by 49 percent who said quality of coverage. This was consistent for older and younger adults, though those 16-34 also felt other factors might get them to change providers, including phone selection and opportunity to bundle and unbundle services.
Price was even more of a factor for Internet providers, with 59 percent saying it is the top factor and 50 percent saying the quality of network coverage, with agreement from all age groups as to the key factors.
“I’m certain that during these trying times consumers are more so shopping on price,” said KPMG’s Wissmann. “But closely matching price is quality of service and coverage, which providers also see as a point of differentiation. While price will remain competitive, consumers aren’t likely to switch providers until service issues arise, so investing in customer support is critical.”
Thirty-four percent of those surveyed by KPMG do not have a landline and 18 percent plan to discontinue their landline in the next year. In addition, 13 percent indicate that they do not have home TV service, with 10 percent planning to eliminate it in the next year.
Younger adults were more inclined to walk away from land lines and home TV service, and are increasingly turning to Internet streaming to view TV programs and movies. However, less than half, 46 percent, said they pay for Internet streaming. Although 25 percent of older adults are Internet streaming, two thirds say they pay for it.
“Young adults are happy with video content available on-line but keep in mind that they still prefer to watch video via a TV screen,” said Wissmann. “Older adults deciding no longer to have home TV service are looking at it from a budgetary standpoint and feel that service is not valuable for the money.
Wholesale change in TV service still a ways off
Networked TVs can steam movies or music, go to the net, show smartphone photos and more.
“A wholesale change from current home TV service is still a ways off and will be driven by the technology changes that will make online video viewing on a TV screen as easy an experience as current TV services provide the consumer.”
As to being connected, consumers are more and more married to mobile and Internet. Forty-two percent of consumers spend 2-3 hours browsing the web each day, outside of work or school, and 21 percent say they spend that same amount of time emailing.
For those aged 16-34, 51 percent spend more than two hours each day browsing the Internet, 25 percent spending two hours e-mailing and 19 percent spending two hours chatting or Internet messaging. Older adults are also Internet locked, though spending far less time, with 32 percent browsing, 18 percent e-mailing and six percent chatting.
Consumers and Convergence V: The Converged Lifestyle, KPMG’s survey of consumer trends in digital technology, communications and e-commerce surveyed 9,600 consumers in 31 countries, including 300 in the United States, ranging in age from 16 to over 65.
Tuesday, October 4th, 2011
The vast majority of senior executives say their organizations have already moved at least some business activities to the Cloud and expect 2012 investment to skyrocket, with some companies planning to spend more than a fifth of their IT budget on Cloud next year, according to a report by KPMG International.
“Clearly, these findings proclaim, ‘the Cloud is now,’” said Lynne Doughtie, U.S. vice chair – Advisory at KPMG LLP. ”As Cloud adoption begins to accelerate among organizations around the world, clearly Cloud is transcending IT and widely impacting business operations, as a full third of survey respondents said it would fundamentally change their business, which is significant considering many organizations are still developing their Cloud strategies.”
In a KPMG survey of organizations that will use the Cloud, as well as companies that will provide Cloud services, economic factors were cited by 76 percent of both groups as an important driver for Cloud adoption.
Reasons for moving to the cloud vary
However, a number of other considerations were equally or more important: 80 percent said the switch to Cloud was driven by efforts to improve processes, offering more agility across the enterprise; 79 percent of users and 76 percent of providers said they saw it as having technical benefits, in some cases improvements that they otherwise could not gain from their own data centers; and, 76 percent said the use of Cloud would have strategic benefits, possibly including transforming their business models to gain a competitive advantage.
Most user respondents to the KPMG survey (81 percent) said they were either evaluating Cloud, planned a Cloud implementation, or had already adopted a Cloud strategy and timeline for their organization, with almost one-quarter of them saying their organization already runs all core IT services on the Cloud (10 percent) or is in transition to do so (13 percent). Fewer than one in 10 executives say their company has no immediate plans to enter the Cloud environment.
“Cloud adoption is quickly shifting from a competitive advantage to an operational necessity, enabling innovation that can create new business models and opportunities,” said Steve Hill, U.S. vice chair – Strategic Investments at KPMG.
“As this rapid adoption curve continues to gain momentum amid a struggling economy, it is important for corporate leadership, directors and boards to be informed and engaged in strategic discussions about Cloud’s impact on their long-term growth opportunities and competitiveness.”
Hill, who previewed the KPMG survey findings this week during Oracle Open World, Oracle Corp.’s global conference in San Francisco, pointed out that the role of the corporate Cloud leader remained contentious.
IT executives see migration to the Cloud as their initiative, while operations executives believe the CEO should lead the change. “Enter the Chief IntegrationOfficer, as the traditional CIO’s role expands to break down potential silos and integrate internal and external business needs, systems and partners,” said Hill.
IT-Business Executives Differ Moderately on Cloud Expectations
Executives whose companies would use a Cloud strategy agree that spending will rise significantly in 2012.
According to the KPMG survey, 17 percent of corporate executives said Cloud spending would exceed 20 percent of the total IT budget in 2012.
Half of the IT executives at companies where Cloud is or will be adopted say security is the most important challenge or concern, compared with 42 percent of the business unit executives, while 51 percent of the Cloud provider community said security topped their list. Business unit executives (29 percent) shared equal concerns about performance with their IT counterparts (30 percent). In addition:
- IT governance was a top challenge among 22 percent of the IT leaders, but cited by just 17 percent of the business users;
- Nearly a fifth (19 percent) of IT executives said loss of control over customer data was a perceived top challenge, compared with 14 percent of respondents among their operations counterparts; and,
- Regulatory compliance was a top challenge among 16 percent of the business executives, compared with just 10 percent of the IT leaders.
The survey also found that approximately 45 percent of the respondents had not evaluated the tax implications of cloud or don’t know if these factors are being evaluated. “Ignoring tax issues has never changed the responsibility of the payer, which makes taxation a critical issue for those wishing to evaluate all implications of the cloud environment,” said Hill.
Cost Savings are Key
Respondents agree, however, that Cloud must offer a number of benefits before it can gain full momentum in their organization. For example, 75 percent of total respondents globally said they need to show a cost savings to justify a move into the Cloud. More executives from Asian-Pacific countries (86 percent) required a cost savings, than their counterparts in Europe, the Middle East and Africa (72 percent) or the Americas (71 percent).
Almost half of respondents (45 percent) said that, to make Cloud worth the investment, IT savings would need to be from 1 percent to 10 percent from current spending, 34 percent said such savings would have to be from 11 percent to 25 percent, and some 10 percent said IT savings would need to be in excess of 25 percent.
The KPMG survey was conducted in 15 countries from February to April 2011, and canvassed 806 senior executives – nearly 50 percent of them from the C-level – in companies that use or plan to use Cloud, as well as 123 executives from Cloud service providers.
Wednesday, June 29th, 2011
The United States market has rebounded to first place from third just a year ago, ahead of China and India, as a driver of future revenue growth for the technology industry, according to the results of the annual Technology Industry Business Climate survey by KPMG, the audit, tax, and advisory firm.
Yet, while the senior technology executives surveyed see the U.S. market driving revenue growth – and although they anticipate continued investment in mergers and acquisitions and emerging technologies – they are less optimistic about overall technology industry employment growth and the prospects of a national economic recovery than they were a year ago.
Survey respondents expect the U.S. market to provide the highest percentage of revenue growth and employment growth over the next 12 months. China, Brazil and India follow the U.S. in revenue, while Indiaand China are second and third in employment.
U.S. ranked third in 2010
In the 2010 KPMG survey, the U.S. market was ranked third in expected revenue growth and fourth in employment growth. In addition, tech leaders this year predict the U.S. also will have the industry’s greatest percentage of research and development investment growth, followed by India and China.
“Technology executives clearly see a sustained recovery and a strong appetite for technology related purchases by U.S. companies and consumers, which helped raise the position of the U.S. market. Coupled with demand from emerging market countries, this combined opportunity bodes well for the industry,” said Gary Matuszak, partner, global chair and U.S. leader for KPMG’s Technology, Communications & Entertainment practice. “They also intend to take advantage of their strong liquidity and cash positions by investing in emerging technologies and new business models, like Cloud, and new products and services, as well as M&A to drive revenue.”
The tech industry executives also may be buoyed by information technology spending in the banking and retail industries. Executives in KPMG business climate surveys in both of those sectors identified technology as the number one area for investment.
In looking at revenue, many of the technology industry survey respondents (77 percent) expect the overall revenue at their companies to be higher one year from now. Technology executives again this year said their biggest revenue driver over the next three years will be cloud computing. In fact, KPMG’s surveyresults show 65 percent ranked cloud computing as the top driver, a sharp jump from the 54 percent in last year’s survey. The second and third ranked revenue drivers in this year’s survey were mobile applications and advanced data analytics.
M&A Still Hot
More than 8 out of 10 technology executives believe their companies will be involved in a merger or acquisition during the next two years with 68 percent likely involved as a buyer and 15 percent as a seller. Those surveyed also said that access to new technology and products (69 percent), and product synergies (50 percent) will be the most important drivers of alliances, mergers and acquisitions over the next 12 months. This is consistent with the executives’ expectation that their companies will increase spending the most over the next year in new products, R&D, and acquisitions.
“The industry has seen the rise of many innovative companies in the past few years. However, this is somewhat tempered by an overhang of the U.S. downturn, as technology leaders now project the U.S. economic recovery to take hold in 2013 or beyond, indicating full economic recovery remains at least two years away,” said Matuszak. “There clearly is a continuing delay in their view of the U.S. economic recovery. Last year, the survey respondents predicted that the overall U.S. recovery would take hold in 2012 while in our 2009 survey executives believed it would begin to take hold in 2011.”
Less Optimism about Headcount
In the 2011 survey, 49 percent of the tech leaders anticipate their companies’ headcount increasing over the next year compared to 42 percent who actually increased headcount in the last year. In the 2010 survey, 72 percent of executives anticipated increases in headcount over the next year. Also, while 27 percent of the tech executives said their headcount already has reached or exceeded pre-recession levels, 42 percent said their companies’ headcount would return to pre-recession levels over the next 18 months, and 21 percent said headcount will never return to those levels.
KPMG Technology Industry Business Climate Survey
The KPMG survey was conducted in the U.S. in May-June – 2011 and reflects the respoU.nses of 102 primarily C-level and senior executives in the hardware and software computer industry. Of the 102 respondents, 71 are in companies with revenues exceeding $1 billion and 31 are companies with revenues in the $100 million-$1 billion range.