TMT sector
thriving on
disruption

Revenue growth positivity across technology, media and telecommunications

CEOs are increasingly confident on revenue growth prospects after a dip in 2020. Last year, between 22% and 31% of technology, media and telecommunications leaders were "very confident" their organisations would grow over the next 12 months. This compares to a higher range of 34% and 45% in 2021, with technology sector CEOs the most optimistic. This level of optimism reflects the integral roles that technology and connectivity have played in enabling businesses to transform in the past twelve months. Thanks to TMT, workers and sales channels have shifted from the physical to the virtual space.

Digital transformation is to the fore in the investment plans for 41% of the Irish CEO survey population. This should further underpin growth within the sector over the next three years. Global investment in technology enabled transformation will further bolster the Irish technology, media and telecommunications sector. Ireland is home to the top five global software companies and nine of the top ten US technology companies. It employs over 37,000 people locally, generating €35 billion in exports every year.

For entertainment and media companies, the PwC annual Entertainment and Media outlook survey had been tracking the progressive trend of a shift in revenue from physical to digital offerings. This included over the top (OTT) streaming and gaming services. Our CEO survey supports the expectation of continued growth over the next three years. The Irish TMT sector is well placed to benefit from the acceleration of digital trends. This is reflected in the positive sentiment across our CEO group.

Organic growth and strategic alliances high on the agenda

Achieving organic and incremental revenue growth is high on the agenda for technology, media and telecommunications CEOs. Realising cost savings at the operations layer, to underpin scalable growth, remains a top priority over the next year. 66% of TMT leaders believe that driving productivity gains through technology-enabled workflows and solutions are key to increasing efficiency.

Technology companies have always been at the forefront of solution development and adoption. This continues to provide them with a significant competitive advantage. 57% of CEOs expect to increase headcount. This strongly indicates the importance of adding new capabilities to harness potential in this sector.

We asked which aspect of workforce strategy business leaders would change to improve competitiveness. Approximately a third identified the importance of focusing on workforce health and well being amongst their priorities. They also called out improving workplace culture.

At a time when many business leaders have been forced into reactive mode to deal with critical issues, TMT companies are very well placed to pivot towards the growth agenda.

Cyber-risks arising from expanded connectivity

While high levels of confidence for the future are clear, there are concerns evident in the responses. 51% of technology, media and telecommunications CEOs rate pandemics and other health crises as being their top concern, with cyber-risk coming a close second at 48%.

The sudden nature of the pandemic resulted in disruption not only for TMT organisations but also for its customers. Many organisations experienced a sharp reduction in advertising budgets or lost revenue, from live music to sporting events. While the sector has benefited from the acceleration of a global shift to digital technology, more data than ever is now captured and handled across connected platforms. This has led to an increased threat of cyberattacks. The movement of the workforce out of the office environment to the home means organisations need to focus on security and mitigate risk. A cyberattack can prove debilitating for any organisation. The ability to prevent or handle one is a key marker of competitive advantage.

The risk of overregulation is also a concern for TMT leaders. With increased globalisation of business models and technology platforms, organisations face the challenge of constantly evolving regulations. If not appropriately managed, these can result in reputational damage and possible fines. Organisations that take a strategic, proactive approach to compliance can further secure their business models.

TMT leaders doubling down on digital investments

Many technology, media and telecommunications organisations have invested heavily in building technology platforms and applications. These have improved productivity not just for their own organisations but also for their customers.

78% of TMT leaders say they will increase investment in digital transformation. Although a lower percentage compared other sectoral leaders, this must be viewed in the context of TMT organisations as early adopters of technology enabled change.

With an increased appetite for investment in this area, we would urge business leaders to ensure that change management forms a key pillar of any technology implementation programme. It is critical that people who work with the technology must adapt to new roles or new ways of working to deliver on the anticipated business case.

If organisations prioritise investment in building the digital capabilities of their teams, then a balance can be struck between large spend associated with large scale technology implementations and lower cost, in- house delivered, tactical technology solutions.

Few factoring climate change into strategic planning

Although CEOs recognise the threat of climate change, with 26% indicating extreme concern, technology, media and telecommunications organisational plans do not appear to be prioritising mitigation strategies in response.

The climate imperative is building momentum and global consumers and business stakeholders have growing expectations of business to take climate action. Organisations which have embraced new initiatives, such as implementing "net zero" strategies or adopting ESG reporting guidelines, are reconfiguring strategy and operations to improve their impact on the environment and on society. A focus on sustainability can strengthen market access and build loyalty with customers and stakeholders.

TMT CEOs should benefit from taking a proactive approach to measuring and reporting their organisation's environmental impact. Achieving net-zero emissions requires appropriate levels of attention and funding. In order to make step changes to policy and operational protocols, a cultural transformation is required as this scale of initiative requires a long lead time to bear fruit.