CEOs shouldn't overlook security in the drive to disruption, KPMG Malaysia says

92% of ASEAN CEOs see disruptive forces as an opportunity, according to a new KPMG global study.

By AvantiKumar
June 21, 2017


CEO digital strategies (GraphicStock)

Credit: GraphicStock

 

  While KPMG's recent 2017 Global CEO Outlook revealed that 92 percent of ASEAN CEOs see disruptive forces as an opportunity, Malaysian leaders may have to reprioritise security on their agenda.

Datuk Johan Idris, managing partner of KPMG in Malaysia, put the spotlight on operational risk, which has risen to become the highest concern for CEOs overall. This is followed by risks of emerging technology, reputational/brand risks, and strategic risks. (See - 92 percent of ASEAN CEOs see disruptive forces as an opportunity)

Cyber security, which CEOs ranked as the top risk in 2016, has this year fallen to position 5 (of 16), with 42 percent say they feel adequately prepared for a cyber event - up from 25 percent in 2016.

CEOs clearly believe they are making progress in their management of cyber, said Johan. However, this perception was recorded before the WannaCry ransomware outbreak in May 2017. According to the live tracking system at KPMG's Cyber and Digital Hub established in Malaysia, to date, more than 530,000 computers in 150 countries have been affected by WannaCry, and this number is still expected to increase.

CyberSecurity Malaysia's chief executive officer Dato' Dr Amirudin Abdul Wahab issued a national alert at the time. (See - Global ransomware attacks prompt national 'WannaCry' alert from CyberSecurity Malaysia)
 
Johan commented: "In actual fact, ransomware attacks are nothing new and this latest incident reinforces the need for business leaders to remain vigilant and avoid complacency when it comes to governance in cyber space. We operate in a digital world today where breaches can happen anytime."

"Complacency will only increase the risks across the business, from operational to reputational, with lasting impacts," he added.

Cautious optimism

Johan moved on to the heightened uncertainty around global economic growth: the study found that 65 percent of the CEOs remained confident about the global economic outlook for the next three years, though this is a drop from 80 percent in 2016.
 
Globally, the majority of CEOs (69 percent) also remained confident in their own industry's growth prospect, he said. In addition, a significant amount of CEOs (83 percent) were positive about their own businesses' prospect over the next three years.
 
About three-quarters of CEOs (74 percent) said their organisation was placing greater emphasis on trust, values and culture in order to sustain its long-term future. This is matched by 72 percent of CEOs who correlate being a more empathetic organisation with higher earnings.
 
KPMG's survey further found that over the next three years, the proportion of leaders increasing investment in recruitment has risen to 75 percent. This suggested that businesses were increasingly looking to hire more specialised talent in the years ahead - such as cognitive technology experts or those with greater insight into geopolitical issues.
 
This intention is in tune with the number of CEOs in ASEAN expected to invest in Blockchain and data analytic tools (92 percent); cognitive technologies including artificial intelligence and machine learning (83 percent); and internet of things (79 percent), over the next three years.
 
"Greater digital investments offer companies more opportunities to secure competitive advantage," said Johan.  "It is positive news that CEOs are still committed to invest in their people and make them important assets in the company as one way to manoeuvre around the current period of economic and geopolitical uncertainty."

 Disruption and opportunities
 
Based on the survey, which interviewed nearly 1,300 CEOs of some of the world's largest companies, 65 percent of CEOs believe disruption can have a positive effect, while three in four say their business is aiming to be the disruptor in their sector. In ASEAN, the percentage recorded is higher with 92 percent and 83 percent respectively.
 
"Disruption has become a fact of life for CEOs and their businesses as they respond to heightened uncertainty," John Veihmeyer, global chairman of KPMG commented during the initial release of the study. "But importantly, most see disruption as an opportunity to transform their business model, develop new products and services, and reshape their business so it is even more successful than ever before. In the face of new challenges and uncertainties, CEOs are feeling urgency to 'disrupt and grow.'"
 
 KPMG's 2017 Global CEO Outlook survey covered 1,261 CEOs in 10 key markets (Australia, China, France, Germany, India, Italy, Japan, Spain, UK and US) and 11 key industry sectors (automotive, banking, infrastructure, insurance, investment management, life sciences, manufacturing, retail/consumer markets, technology, energy/utilities and telecom).
 
 To see more coverage of leadership insights about Malaysia's ICT industry, see
What's really in store for Malaysia's IT industry in 2017?
KPMG and Cisco partner to drive Smart Cities strategy in Australia
Gamification attracts Malaysian students to annual cyber security challenge

 The latest edition of this article lives at Computerworld Malaysia

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