AI Adoption Surges in India's TMT Sector: KPMG Report Reveals Transformative Impact

Over half of India's Technology, Media, and Telecommunications organisations fully integrated AI

About 55% of the organisations in Technology, Media, and Telecommunications (TMT) sectors in India have fully integrated AI, with 37% in the scaling phase, according to the findings of a study by KPMG India titled "Redefining TMT with AI". The study delves into the rapid transformation happening across the TMT sectors, driven by the adoption of artificial intelligence. The report highlights how AI is playing a pivotal role in reshaping TMT operations by improving efficiency, personalising experiences, and enhancing decision-making. AI-driven innovations have already delivered significant results, including a 5-10% reduction in operational costs and over 10% returns on AI investments for 67% of respondents. From automating networks in telecom to delivering personalised media content, AI is streamlining processes and unlocking new opportunities for growth. The report is based on a survey of industry leaders like CDOs (chief digital officer), CTOs (chief technology officer), and CIOs (chief information officer). The report states that 13% of the organisations are 'AI Explorers' or still in the initial planning stages of adopting AI technologies. About 55% of respondents anticipate that 30-50% of their product or solution portfolios will be AI-led, with expectations that these AI-driven offerings will contribute 10-30% of incremental revenue. The study also pointed out the potential for organisations to gain a significant competitive edge through the use of Generative AI. About 65% of Indian CXOs strongly agree that leveraging generative AI will provide a significant competitive advantage, highlighting its strategic importance in the TMT sector. About 52% of organisations report enhanced customer service by utilising AI to improve technology and network performance metrics, leading to better observability and service enhancements. About 67% of companies have begun generating returns in excess of 10% on their AI implementations, building a compelling case for widespread adoption across the sector. Nearly 40% of companies are adopting AI within finance and HR functions to achieve better predictability in operations and decision-making processes Telecom executives are seeing high levels of AI adoption, with 30% focusing on improving service quality. Additional areas of impact include revenue growth (26%), fraud prevention (32%), and delivering better customer experiences (12%). However, the study also points out to some of the barriers to AI implementation with about 26% of the respondents citing a lack of skilled workforce and awareness as significant inhibitors to AI adoption. Nearly 27% also pointed out to high overall costs of implementation as the top barrier, alongside challenges such as lack of accurate data, IT security and privacy concerns. As regards to workforce readiness for AI, about 33% of the survey participants believe that 30-50% of their workforce will be AI-ready by FY26, underscoring a strong focus on reskilling and upskilling initiatives. According to KPMG's Global CEO survey, 80% of CEOs agree that investing in skill development is essential for organisations.

The AI Imperative: How India's TMT Sector is Shaping the Future of Technology and Business - KPMG in India report

KPMG in India has launched a thought leadership report titled "Redefining TMT with AI" at the India Mobile Congress 2024. This comprehensive study delves into the rapid transformation happening across the Technology, Media, and Telecommunications (TMT) sectors, driven by the adoption of artificial intelligence. As the global landscape shifts towards a digitally powered future, IMC 2024 epitomizes the theme "The Future is Now." The report highlights how AI is playing a pivotal role in reshaping TMT operations by improving efficiency, personalizing experiences, and enhancing decision-making. From automating networks in telecom to delivering personalized media content, AI is streamlining processes and unlocking new opportunities for growth. The report based on a survey of industry leaders like CDOs, CTOs, and CIOs, reveals that 55% of TMT organizations have fully integrated AI, with 37% in the scaling phase. AI-driven innovations have already delivered significant results, including a 5-10% reduction in operational costs and over 10% returns on AI investments for 67% of respondents. This thought leadership report also dives into the key challenges, such as a shortage of skilled talent and the high cost of AI implementation and the strong momentum toward overcoming these barriers. As AI continues to evolve, the insights shared in this report will shape the future of digital communications in India and beyond. Key Takeaways from the TL: AI Adoption Landscape:55% of organizations are classified as AI Pioneers, having successfully implemented AI at full scale for select use cases.32% are considered AI Evangelists, currently in the process of gradually scaling their AI initiatives.13% are AI Explorers, still in the initial planning stages of adopting AI technologies.55% of respondents anticipate that 30-50% of their product or solution portfolios will be AI-led, with expectations that these AI-driven offerings will contribute 10-30% of incremental revenue. Competitive Edge through Generative AI:65% of Indian CxO's strongly agree that leveraging generative AI will provide a significant competitive advantage, highlighting its strategic importance in the TMT sector.52% of organizations report enhanced customer service by utilizing AI to improve technology and network performance metrics, leading to better observability and service enhancements.67% of companies have begun generating returns in excess of 10% on their AI implementations, building a compelling case for widespread adoption across the sector.40% of companies are adopting AI within Finance and HR functions to achieve better predictability in operations and decision-making processes Telecom Sector Insights:Telecom executives are seeing high levels of AI adoption, with 30% focusing on improving service quality.Additional areas of impact include revenue growth (26%), fraud prevention (32%), and delivering better customer experiences (12%). Barriers to AI Implementation:26% of respondents cite a lack of skilled workforce and awareness as significant inhibitors to AI adoption.27% report high overall costs of implementation as the top barrier, alongside challenges such as:Lack of accurate dataIT security and privacy concerns Workforce Readiness for AI:33% of survey participants believe that 30-50% of their workforce will be AI-ready by FY26, underscoring a strong focus on reskilling and upskilling initiatives.According to KPMG's Global CEO survey, 80% of CEOs agree that investing in skill development is essential for organizations. Accelerating AI Adoption in the TMT Sector: Suggestions from the report For the TMT Industry: Enhance Infrastructure: Invest in 5G, cloud computing, and edge technologies to support AI solutions, focusing on network automation to improve reliability and reduce costs.Cross-Sector Collaboration: Partner with industries like healthcare and manufacturing to provide AI solutions for predictive analytics and customer engagement.Strategic Partnerships: Collaborate with specialized AI providers to access advanced technologies and accelerate innovation.Develop Talent: Invest in upskilling through partnerships with universities to create AI curricula focused on network automation and cybersecurity.Responsible AI Practices: Implement frameworks ensuring fairness, transparency, and regular audits of AI models to mitigate bias. For Policymakers: Governance Frameworks: Develop regulations that balance innovation with responsible AI usage. Establish ethical standards, ensure transparency in AI systems, and implement strong data privacy laws.Support R&D: Fund initiatives and establish Centers of Excellence to keep the TMT sector competitive.Public-Private Partnerships: Foster collaborations to accelerate AI deployment in infrastructure and public services.National Training Programs: Work with TMT companies to create educational initiatives that bridge the AI skills gap. Akhilesh Tuteja, Partner & National Leader - Technology, Media and Telecommunications (TMT), KPMG in India: "The TMT industry stands at the cusp of a remarkable transformation, driven by the rise of artificial intelligence. As the global landscape rapidly embraces a digital-first future, AI is emerging as a transformative force, reshaping not just the TMT industry but all other industries. This pivotal moment offers the sector an opportunity to redefine its role as a catalyst for change, fostering advancements across industries and ensuring that the far-reaching benefits of AI are realized by all." Commenting on the report, Purushothaman KG, Partner, Head Technology Transformation and Sector Head - Telecommunications, KPMG in India said, "The insights from this report highlight the significant impact AI is set to have across the TMT landscape. Our findings suggest that organisations adopting AI technologies are not merely enhancing their operations; they are also fundamentally reshaping customer experiences and driving innovation in ways we haven't seen before. For companies in the TMT sector, the message is clear: those who embrace AI and invest in robust strategies to integrate these technologies will emerge as leaders in a highly competitive environment. As we move forward, collaboration, skill development, and ethical AI practices will be critical in unlocking the full potential of this transformative technology." Hemant Jhajhria, Partner and Head of Consulting, KPMG India said, "Artificial Intelligence is revolutionizing the TMT sector in customer service, network optimization, marketing personalisation and fraud detection. At KPMG in India, we see AI not only as a technological advancement but as a strategic enabler that positions companies at the forefront of innovation and growth. This report provides a roadmap for organizations to navigate the complexities of AI adoption, ensuring they leverage its full potential for sustainable success."