KPMG’s $2 billion GenAI plan targets transformation with trust

KPMG customers will experience a new client services delivery model as part of a $2 billion investment to embed generative artificial intelligence (GenAI) into its business over the next three years. The firm is forging ahead with GenAI despite 92% of business leaders expressing moderate to high concerns over the risks involved with the technology.

KPMG has a reputation for managing risk. It intends to build on its reputation, data, and AI capabilities with its $2 billion investment with Microsoft and recent investments in Auditoria, Rhino.ai, and Cranium.

HFS believes that the flaws GenAI pilots reveal in some businesses’ cloud and data infrastructures should be considered among organizations’ most significant risks when scaling the impact of GenAI.

Investments will change the firm’s client services delivery model

KPMG shared its AI strategy and investment plans at a global analyst event at KPMG Lakehouse, its training and development facility in Orlando, Florida. Investment areas include go-to-market acceleration and service portfolio evolution, service delivery model and tooling innovation, and internal adoption of AI to drive business efficiency and modernization.

KPMG seeks to change its client services delivery model in what it describes as a “new era for professional services” by putting GenAI in the hands of all KPMG professionals. A large language model-based (LLM-based) framework helps in-house teams deliver customer experience enhancements; it also assists in operations. Examples include KPMG’s Audit Pilot. KPMG is leveraging its long relationship with Microsoft to introduce new AI and AI services into its existing suite of audit and tax services and its business transformation services.

Service providers are investing ahead of enterprise commitments

KPMG is not alone in throwing big budgets at GenAI. It is also not alone in seeing little commitment beyond tests, pilots, and proofs of concept (POCs) from its customers. Like much of the market, it is banking on client conversations, education, and interest converting into big-budget commitments in 2024.

Evidence to support the GenAI gold rush comes from KPMG’s surveys, which indicate that 72% of CEOs have a digital investment strategy to be either a first-mover or fast-follower. More than three-fourths, 77%, of those surveyed expect GenAI to have the largest impact on their business of all emerging technologies over the next three to five years.

KPMG may feel further emboldened by its reputation for and focus on security and risk management. Its data shows that 55% of organizations say they have delayed their progress toward automation because of concerns about how AI makes decisions. These delays and the 92% who express worries about risk (as referenced above) suggest a fear gap holding organizations back—a gap KPMG wants to address with the Trusted AI framework.

GenAI pilots reveal a backlog of digital maturity gaps

Despite the euphoria facts and figures may inspire, our conversations with KPMG personnel suggest a pragmatic approach steeped in the reality of the challenges of the enterprise. Leaders tell us many of their early GenAI conversations, tests, and POCs reveal that if enterprises are ever going to reap the benefits of GenAI at scale, the above concerns on risk need to be addressed. There is also much work to do in cloud infrastructure and data operations.

In this respect, GenAI is taking up an additional role as a digital maturity intelligence tool. It highlights significant cloud and data improvement opportunities for organizations that KPMG is well-positioned to support clients with as they seek to set a vision, develop AI and GenAI capabilities, establish a digital foundation, and build a portfolio of AI and GenAI solutions, all in a trusted way. KPMG works closely with SaaS vendors to connect its platform business with the latest product roadmaps.

The Bottom Line: GenAI can’t deliver on its enterprise promise without cloud and data fixes.

KPMG’s investments in AI are refreshing its portfolio of solutions across its Connected, Powered, and Trusted propositions. Together, they can help take much of the fear out of GenAI, focusing on addressing risk, regulations, ethics, and security. However, discovering flaws in digital infrastructure among clients might deliver more near-term revenue. Leaders of digitally immature businesses harboring dreams of instant success with GenAI are about to discover success will not scale without the right cloud and data infrastructure.

Out now: HFS Horizons report for generative enterprise services. Find it here.