Spotlight:

Hot Topics & Emerging Trends in

Technology
KPMG CIO Advisory – June 2018

© 2018. KPMG Advisory Services Limited, a registered partnership and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
 SESSION OBJECTIVES
Updates from our KPMG 2018 CEO
1 Outlook Survey

Digital Transformation in Private

2 Equity

3 Panel Discussion: Key Opportunities

for Digital Transformation

This presentation is made by KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent firms affiliated with KPMG International

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any member firm.

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Document Classification: KPMG Confidential

Growing
pains
2018 East Africa CEO Outlook
This year, the
survey included a Projected growth is
representative modest and
sample of East grounded in the
African CEOs from reality that it will not
Kenya, Uganda, be realised without
Tanzania, Rwanda challenges and will
and Ethiopia, be accompanied by
whose views are
presented in this
report.
‘growing pains.’
©2018 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients.
No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights
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reserved

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Highlights TECHNOLOGICAL DISRUPTION: A double-edged sword

Organisations are embracing disruption

– Nine in 10 see it as more of an opportunity than a threat.
– Seven in 10 are actively disrupting the sector in which they operate.
– Only a third (35 percent) feel that they are struggling to keep pace with the rate of technological innovation.

Emerging technology and operational risk are the biggest threats to growth
– East African CEOs identify the top threats to their organisation’s growth as emerging technology risk (43
percent), and operational risk (43 percent).

Organisations are not fully prepared for cyber attacks

– 49 percent say that becoming a victim of a cyber-attack is a case of “when”, not “if”.
– Only a third of East African CEOs believe that their organisations are either ‘very well’ or ‘well’ prepared for
a future cyber-attack, while just over half (55 percent) say they have the ability to contain the impact of an
attack on strategic operations.

©2018 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients.
© 2018.No KPMG Advisory
member Services
firm has Limited, to
any authority a registered
obligate orpartnership
bind KPMGand a memberorfirm
International anyofother
the KPMG network
member of
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights
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Highlights REALISTIC GROWTH: Optimism tempered by pragmatism

Optimistic macroeconomic outlook

– East African CEOs are very confident about their own businesses: nine in 10 are confident in the company’s
growth prospects for the next 3 years.
– 70 percent are confident in the growth prospects for the global economy.

A healthy dose of pragmatism

– A large majority of East African CEOs anticipate moderate increases in both revenue and headcount
over the next 3 years.
– Three-quarters anticipate top-line revenue growth for their organisation of 2 percent or less, while the
same proportion expect headcount to increase by less than 5 percent.

Rethinking growth
– 78 percent of East African CEOs report a low to moderate appetite for M&A.
– East African CEOs are looking primarily at strategic alliances with third parties (27 percent) and organic
growth (25 percent) to achieve their organisation’s growth objectives.

©2018 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients.
© 2018.No KPMG Advisory
member Services
firm has Limited, to
any authority a registered
obligate orpartnership
bind KPMGand a memberorfirm
International anyofother
the KPMG network
member of
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights
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independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All
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Document Classification: KPMG Confidential
Highlights DIGITAL GETS PERSONAL:
CEO’s take ownership of driving digital transformation and trust

Owning transformation
– 69 percent of CEOs agree that they are personally prepared to lead the organisation through radical
transformation.

CEO as data protector

– 73 percent see protecting customer data as a critical, personal responsibility

Robots manufacture jobs

– 82 percent expect AI to create more jobs than it eliminates

©2018 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients.
© 2018.No KPMG Advisory
member Services
firm has Limited, to
any authority a registered
obligate orpartnership
bind KPMGand a memberorfirm
International anyofother
the KPMG network
member of
firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights
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independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All
reserved
rights reserved.
Document Classification: KPMG Confidential
Artificial Intelligence, machine
learning, robotics and block
chain are technologies that any
company worth its name will
need to adopt as early adopters
or fast followers. No company
can afford to be left behind as
the 4th Industrial Revolution sets
in across the world.
Dr. James Mwangi
Group Managing Director & Group CEO
Equity Group Holdings Limited

©2018 KPMG International Cooperative ("KPMG International"), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no services to clients.
© 2018. KPMG Advisory Services
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registered partnership
to obligate andKPMG
or bind a member firm of the
International orKPMG network
any other of independent
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Digital Transformation
in Private Equity
 If you're running or working for a private equity firm and you
haven't taken bold steps to integrate the latest digital tools and
data and analytics technology into your business, you may be
working with a built-in expiration date.

Gavin Geminder – National Sector Leader, Private Equity - KPMG U.S.

© 2018KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved
The KPMG name and logo are registered trademark or trademarks of KPMG International.
Private Equity Digital Transformation
 Majority of Private Equity firms rely on traditional manual
processes to analyse deals and for back-office processes.

 A handful of the larger Private Equity firms have already

implemented or are exploring the use of digital tools and data
& analytics to provide them an edge in this competitive market
segment

 The transformation to a digital world may represent a

significant cultural and operational change to your firm and
requires an infusion of new talent. Not easy, but essential to
compete in this new world

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of
independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights
reserved. The KPMG name and logo are registered trademark or trademarks of KPMG International.
Private Equity firms generally have been slow to adapt automation and innovative
technology. However, the speed and accuracy that comes with digital
transformation can help to obtain a competitive advantage in an increasing
competitive environment.

Source: KPMG/CREATE – Research Survey 2018

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademark or trademarks of KPMG International.
Panel Discussion
Key Opportunities for Digital
Transformation in Private
Equity Firms
©2018KPMG Advisory Services Limited, a Kenyan limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
entity. All rights reserved. 21

Document Classification: KPMG Confidential

1. Finding, Evaluating & Pricing Targets

What benefits can digital capabilities provide

during finding, evaluating and pricing targets?

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered
trademark or trademarks of KPMG International.
1. Finding, Evaluating & Pricing Targets
Private Equity firms that have implemented digital transformations
have witnessed:
 Improvements in their deal-making process
 Increased operational efficiencies in portfolio campaigns
 Increased deal speed in pre-due diligence processes
 Increased accuracy in deal pricing
 Improved scenario and growth models, allowing better strategic
decision making
 Virtual data rooms allow for real-time data access, risk
monitoring on positions and improved scenario analysis

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered
trademark or trademarks of KPMG International.
2. Upgrading portfolio company operations

What benefits can digital capabilities provide in

improving portfolio companies’ operations?

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG
name and logo are registered trademark or trademarks of KPMG International.
2. Upgrading portfolio company operations
Technology allows for better monitoring and analysis of the volume and
value of portfolio company’s operating data in real-time:
 Data & Analytics capabilities allow to do a 100% value capture on the
data present on the company’s business and operations, allowing to
enhance efficiencies and business.
 Linking portfolio companies’ systems together, allowing for real-time
monitoring, knowledge transfer across the portfolio, improved
operations and improved analysis on value creation across the portfolio
 Development of in-house digital capabilities to drive the digital fitness of
companies invested in, to accelerate value creation by means of
improving company’s processes, upgrading and expanding its products
and service lines
 Robotic Process Automation helps to automate routine mid-and back
office (manual) operations, including fund accounting, CRM and trade &
settlements

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG
name and logo are registered trademark or trademarks of KPMG International.
3. Compliance & Regulatory reporting

What benefits can digital capabilities provide in

compliance and regulatory reporting

© 2018. KPMG Advisory Services Limited, a registered partnership and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
3. Compliance & Regulatory reporting
Digital capabilities provide opportunities for more cost-effective
procedures for risk and compliance management, for example in
the area of on boarding clients or compliance reporting:
 Streamlining efficiency and effectiveness of compliance and
regulatory reporting processes across the portfolio
 Improvement of the on-boarding process of new acquisitions:
faster, more accurate and efficient
 Improvement of stakeholder communications: faster and more
accurate information provisioning tailored to the stakeholder
interests

© 2018. KPMG Advisory Services Limited, a registered partnership and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
Which activities could benefits most from digital innovation?

Source: KPMG/CREATE – Research Survey 2018

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG
International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademark or trademarks of KPMG International.
Five steps to help you digitalize
 Assess where you are on the digital spectrum and
develop a digital strategy
 Upgrade your private equity firm’s core functions with
digital capabilities
 Embed digital capabilities in your process for choosing
target companies
 Employ digital capabilities to manage, optimize and/ or
merge portfolio companies
 Develop a digital talent strategy

© 2018. KPMG Advisory Services Limited, a registered partnership and a member firm of the KPMG network of independent
member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
About KPMG Private Equity
Our Private Equity practice includes 1,500 professionals
and 250 partners across the globe, bringing passion and
a fresh approach to the challenges faced by our private
equity clients
Since 2014 KPMG has helped over 250 private equity
firms in their digital journey
We have helped our clients transform using digital
strategies, disruptive digital and data & analytics
innovations, using our proprietary and industry leading
technology platforms including Strategic Profitability and
KPMG LINK PartnerTrack tools.

https://home.kpmg.com/us/en/home/insights/2018
/05/the-digital-transformation-imperative.html
 Thank you
Gerald Kasimu
Partner &
Head of Advisory
KPMG East Africa Ltd.
T: +254 709 576 676
E: gkasimu@kpmg.co.ke

Sheel Gill
Partner &
Head of Deal Advisory
KPMG East Africa Ltd
Tel: +254 709 576 305
Email: sheelgill1@kpmg.co.ke

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity.
Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date
it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice
after a thorough examination of the particular situation.
© 2018. KPMG Advisory Services Limited, a registered partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. All rights reserved.
The KPMG name and logo are registered trademarks or trademarks of KPMG International.

© 2018 KPMG Advisory Services Limited, a Kenyan Limited Liability Company and a member firm of the KPMG network of independent member firms affiliated with
KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name and logo are registered trademark or trademarks of
KPMG International.