Innovating is Surviving, Can Companies Keep Up?
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Innovating is Surviving, Can Companies Keep Up?

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Tomás Lujambio By Tomás Lujambio | Journalist & Industry Analyst - Mon, 09/18/2023 - 16:28

Innovation is not just a survival strategy but a crucial element for thriving in an emerging digital economy. According to KPMG's Panorama of Innovation in Mexico and Central America 2023 study, organizations are facing distinct challenges when transitioning their operations into the digital realm. Nevertheless, integrating recent technological trends and innovative operational strategies emerges as an efficient approach to achieving an effective digital transformation.

KPMG surveyed 120 industry leaders in Mexico and Central America. Responders agreed that data and analytics are expected to drive significant changes in organizations across Mexico and Central America over the next three years, commanding a surprising consensus of 80% and 77% respectively. Following closely is analytical AI, with adoption rates of 52% in Mexico and 51% in Central America. The preference for these technologies primarily stems from their ability to enhance decision-making by applying intelligent data analysis within an organization's operations. Furthermore, they have substantially improved customer experience by analyzing customer behavior and needs, leading to more personalized products and services. 

In regard to generative AI tools, 31% of Mexican companies and 27% in Central America believe that they can effectively enhance customer satisfaction, while 25% and 21%, respectively, see it as a tool to boost productivity. Furthermore, it has also demonstrated potential in simulating real-world digital scenarios for testing and training purposes, providing significant value to organizations in industries such as aerospace, healthcare and autonomous vehicles. 

Despite the substantial benefits these emerging technologies offer, many companies in Mexico and Central America remain hesitant about their operational integration. KPMG's report indicates that 58% of Mexican enterprises are in the execution phase of their digital transformation, with Central American counterparts slightly ahead at 68%. Interestingly, 42% of organizations in Mexico considering technology integration tend to incorporate these emerging technologies into their existing services rather than revamping their IT approach altogether, which usually obstructs a seamless digital transition. 

Over the next three years KPMG anticipates 76% of Mexican companies and 84% of Central American companies will revise their product and service offerings to stay competitive, optimizing portfolio efficiency and retaining market significance. However, 45% of companies in Mexico and 35% in Central America invest less than 2% of their revenues in technological initiatives, revealing their measured approach to innovation spending. 

"The key to successful innovation lies in making it an absolute priority for top management, dedicated teams in the field and the operational areas of the business," says Argenis Bauza, Partner and Leader of Digital Lighthouse, KPMG Mexico and Central America. KPMG's study highlighted that budget constraints and a shortage of skilled professionals pose major barriers for Mexican companies seeking to enhance their digital transformation.

Photo by:   Image by Tumisu, Pixabay

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