A new report from the IBM Institute for Business Value finds that, while IT leaders are readying for the accelerated adoption of generative AI, a cooling digital fever is beginning to cause C-suite executives to question whether their IT organizations can meet the demand for even foundational functions.
Although global in scope, the study canvassed 2,500 C-level technology executives (tech CxOs) across 34 countries and had some alarming results: only 47% of those questioned believe that their IT organization is fully effective at delivering basic services compared to 69% in 2013. This decline is more pronounced among CEOs and CFOs, with only 36% and 50%, respectively, rating IT effectiveness positively compared to 64% and 60% in 2013, respectively.
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Against this backdrop, 43% of tech CxOs report that it is the increase in concern from the potential impacts that the use of generative AI could pose to their technology infrastructure that is driving them to now focus on optimizing their systems for scaling AI. Respondent organizations are investing 29% more in hybrid cloud currently than in AI. And they expect about half of their budgets between hybrid cloud and AI to be directed in the next two years.
For example, even as tech CxOs are targeting infrastructure investments in order to scale AI, two-thirds of CEOs are focusing on the critical importance of voracious collaboration at the top between tech and finance leaders to organizational success. There is a gap: only 39% of tech CxOs are working with finance as part of their business case preparation to incorporate tech metrics, and only 35% of CFOs are engaged early in the IT planning process. High-growth, high-performing tech CxOs match technology investment to measurably achieve business results, leading to 12% revenue growth.
“Tech CxOs are dealing with business requirements that are highly complex and accelerated by new generative AI. They have to modernize IT architecture while scaling AI to sustain a competitive advantage,” explained IBM Consulting Senior Vice President Mohamad Ali. “Now more than ever, tech CxOs and finance need to tap into their close working relationship to assure that technology investments are driving real business value.”
While responsible AI remains a top CXO tech priority, from intentions to execution is a little lost in translation. While 80% of the surveyed chief executive officers see transparency in AI as very important to build trust, just over half of the queried tech CXOs say they deliver some key responsible AI capabilities, such as explainability. Still fewer state that they meet standards for privacy, at 46%, transparency at 45%, and fairness at 37%. While, in keeping with this, 41% of tech CxOs identify growing concern with respect to regulation and compliance as barriers to AI adoption, 70% of that same group see it as an opportunity, compared with 50% of CEOs.
The study further brings out the critical role of the talent strategy in the generative AI era. While 63% of tech CxOs agree that competitiveness depends on the ability to develop, attract, and retain top talent, only 58% struggle to fill key technology roles and less than 27% prioritize talent among other key focus areas. Some 68% of tech executives foresee the skills gap in cloud, AI, security, and privacy getting worse over the next three years. On the other hand, these financial pressures emerge as the steep barrier making 54% of the responsive businesses cite the financial pressures as the cause for inadequate investment in technology talent. As a result, 69% of tech CxOs are having a course to look to the business partners in order to source specialized skills.
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