KPMG highlights Kingdom's progress in digital transformation

Arab News

09-02-2025

KPMG has released its latest annual technology report, 'Beyond the Hype: Balancing Speed, Security, and Value,' providing insights into the Kingdom's digital transformation. Based on a global survey with 2,450 global technology executives — including 70 based in Saudi Arabia — the report explores how organizations adapt to fast-changing technologies, optimize investments, and tackle challenges like technical debt and cybersecurity. A key theme is the fear of missing out, which drives some organizations to adopt emerging technologies rapidly. While urgency is understandable, it carries risks if not guided by evidence-based approaches.
'This year's findings underscore the tremendous progress Saudi Arabia is making in its digital transformation journey, driven by a strategic focus on balancing innovation with resilience. As organizations prioritize emerging technologies like AI and everything-as-a-service, or XaaS, it is clear that evidence-based decision-making and addressing foundational challenges such as technical debt are critical to unlocking long-term value,' said Robert Ptaszynski, partner, head of digital and innovation at KPMG.
Organizations in the Kingdom are advancing digital transformation, with 75 percent reporting increased profitability from tech investments in the past 24 months, commonly between 11 percent and 15 percent. This success stems from evidence-based decisions, with 74 percent of leaders calculating tech initiative value before investing. Despite progress, 87 percent of executives are concerned about the pace of technological change, and 93 percent cite leadership risk aversion as a barrier to tech adoption.
In 2024, Saudi executives are prioritizing third-party guidance (99 percent) and in-house trials (83 percent) over competitor benchmarking. This reflects a growing focus on emerging technologies like AI, XaaS, and data analytics. XaaS technologies were identified as a top investment priority by 94 percent of respondents, citing agility and cost reduction, while 59 percent highlighted AI, automation, and data analytics. Interest in Web3 technologies is also growing, with 69 percent expressing enthusiasm for innovation.
Technical debt remains a critical barrier, with 66 percent of organizations reporting weekly disruptions due to foundational IT flaws. High-performing organizations proactively address technical debt, enabling smoother adoption of emerging technologies. The report warns against fear of missing out, distorting judgment, with 77 percent of executives pursuing technologies like virtual and augmented reality to stay competitive. Encouragingly, more leaders are prioritizing proofs of concept and ROI projections over following the herd.
Saudi Arabia leads globally in AI maturity, with 71 percent of respondents seeing productivity improvements from AI investments. However, scaling AI remains a challenge, with only 39 percent successfully deploying AI use cases at scale. Transparency concerns persist, with 87 percent identifying the AI 'black box' as a workforce anxiety factor. Organizations are adopting democratized approaches, with 53 percent encouraging experimentation within structured guardrails. Many plan to centralize AI efforts to ensure efficiency and manage risks.
Data maturity has improved significantly, with 77 percent embedding data practices into daily operations. Nearly all respondents (97 percent) view data and analytics as integral to their strategies. Future priorities include leveraging data for competitive advantage, educating employees, and strengthening data management frameworks.
KPMG emphasizes that aligning tech investments with strategic objectives, addressing technical debt, embedding cybersecurity, and fostering a data-driven culture are essential for sustainable progress. High-performing organizations globally and in Saudi Arabia are advancing digital transformation by strategically evaluating tech portfolios, optimizing decision-making, and managing risks.
As Saudi Arabia embraces the next phase of digital transformation, the KPMG report highlights the importance of balancing speed, security, and value. By aligning tech investments with strategic goals and fostering resilience, Saudi businesses can achieve sustainable growth and keep pace with global innovation.