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Insights from PwC’s 2024 Digital Trends in Operations Survey
Main takeaways we heard from tech and telecom operations leaders in PwC’s 2024 Digital Trends in Operations Survey: The gaps between their technology investments and actual results can be concerning, especially when 45% of CEOs fear their company won’t be viable in 10 years if they continue on their current path. In response to this and other obstacles, these leaders are committed to strengthening their resiliency and risk management, reconfiguring existing technologies and restructuring supply chain networks –– all while still managing and reducing costs.
As many tech and telecom companies strive to reduce costs, enhance efficiency and mitigate risks, they’re also grappling with regulatory headwinds, supply chain volatility, high interest rates, spiking labor expenses and talent deficits. Additionally, they’re struggling to get better ROI on technology investments. Despite shortcomings in capabilities and functionality, however, sector leaders continue to invest, indicating optimism that the promise of emerging technologies will bear itself out. In the past 12 months, about half (51%) of tech and telecom leaders reported increasing their overall technology spend, and they plan to continue along that trajectory.
Digitizing operations demands the right talent to realize benefits
Tech and telecom industries are embracing digital transformation to fuel their growth, streamline operations and enhance decision-making capabilities. They’re making strategic investments in digital solutions like cloud-based technology, AI and machine learning, and operational visibility and analytics.
As exciting as these investments can be, however, 75% of supply chain and operation leaders in the tech and telecom sectors say their technology investments haven’t fully delivered the expected results. For some, 38%, the technology itself didn’t provide the expected capabilities or functionality. These deficits can happen when teams focus on short-term minimum viable products (MVPs) instead of building iteratively toward a modern capability. For others, the delta between investment and results was a skills problem –– 33% of tech and telecom leaders ranked not having the right capabilities among their people as one of the top three reasons their technology investments aren’t delivering expected results. And the same percentage cited the scarcity of skilled digital talent as one of their top three challenges to digitizing their operations.
So, what are tech and telecom companies planning to do about these digital skill gaps? In the past year, 44% of tech companies increased their investment in technology-savvy talent, including hiring, training and retraining employees. For telecom, it was 71%, which is significantly higher than other key industries. These upskilling investments are on the rise. Most tech and telecom operations leaders, 92%, say their company is expanding training for employees on how to use digital technologies, and nearly half (48%) are significantly increasing their hiring of talent with the necessary digital skills (versus 32%-33% in other key industries). And more than a third are boosting efforts to retrain employees for new roles.
Despite recent layoffs in the sector, 81% are planning increases in overall operations headcount. And where they can’t bring in new talent, many (73%) will increase their use of third-party vendors to fill digital skills gaps and boost their overall reliance on outsourcing.
GenAI shows promising operational benefits
The majority of operations leaders in tech and telecom that we surveyed are already building the foundational data infrastructure and implementing the training needed to harness the power of generative AI (GenAI): 71% say their company has at least begun testing the use of GenAI, with 25% reporting that they’ve implemented it into a few areas of their business. And within the past 12 months, many have already worked to modernize their structured and unstructured data to take advantage of potential GenAI use cases and solutions, hired new GenAI talent, trained their employees to use GenAI tools, and made cybersecurity and privacy enhancements. We’re also seeing some of our tech clients leverage GenAI within their service operations. And when it comes to field and service operations in telecoms, we’ve helped clients use a hybrid approach with conversational AI and GenAI in addressing customer queries.
When it comes to increased operational efficiencies (e.g., streamlined supply chains and logistics), expectations are high for anticipated GenAI benefits over the next 12 months. Nearly half (46%) of technology and telecom operations leaders we surveyed expect GenAI to help their organization achieve continued operations efficiencies. Improved product and profitability are also on the list of anticipated benefits. And when it comes to more cost savings, 44% have achieved them and 45% expect more savings in the next 12 months.
Building longer-term resilience through tech-enabled operations
Some organizations invest in leading technologies but don’t use them to their full potential because they lack needed changes in their processes and management structure. The key to meaningful ROI lies in using technology in new and improved ways. Failure to adapt processes and management structures to take advantage of faster information flow represents a lost opportunity for companies. If a company’s processes aren’t designed and standardized to effectively capture and manage data, and if management structure lacks sufficient controls, data quality, availability and security can be compromised. Tech and telecom leaders cited these kinds of data issues as the greatest challenge in digitizing their operations.
They’re striving to align their technology investments –– such as modernizing their data practices and platforms so they can better leverage AI –– to their overall operational priorities. They’re also focusing on reconfiguring their existing technology, as 89% have either implemented or plan to make changes in this area within the next year. This digitization is a large part of how they plan to evolve their operating models to maintain and gain competition advantage. These changes include those in areas such as planning, manufacturing, logistics and distribution. Tech and telecom companies recognize the importance of changing how they work internally. Our survey revealed that 80% of tech and telecom supply chain and operations leaders have either implemented or plan to change their operating models within the next year — slightly higher than the average across key industries.
Tech and telecom leaders are also prioritizing the restructuring of their supply chain networks. This includes actions such as reconfiguring manufacturing footprints, expanding distribution centers and diversifying sourcing. An impressive 87% have either implemented or plan to undertake such changes in the next year.
Strengthening resiliency and risk management is another key area of focus, and 87% of leaders have either implemented or plan to strengthen their resiliency and risk management strategies within the next year. When asked which regulatory areas will require new operations-related digital investments for their companies to be in compliance, 62% of tech and telecom respondents ranked cybersecurity and data privacy among their top three areas where they’re putting the most investment — a prioritization that sets them apart from other key industry respondents in PwC’s 2024 Digital Trends in Operations Survey. This proactive approach to risk management confirms that companies are better prepared to navigate unforeseen challenges and disruptions.
By adapting processes and management structures, restructuring supply chain networks, reconfiguring existing technology, and strengthening risk management, companies can improve their supply chain resilience and streamline operations. Making these changes enables companies to take full advantage of the new capabilities that technology provides and better positions them to focus on their key priorities: boosting efficiencies, reducing costs, evolving their workforce and supporting future growth.
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