IT leaders are preparing their organisations for accelerated generative AI adoption – but C-suite executives’ confidence in their IT team’s ability to deliver basic services is declining.
A new IBM Institute for Business Value study of 2 500 of C-level technology executives (tech CxOs) from 34 countries revealed that fewer than half (47%) of those surveyed think their IT organisation is effective in basic services compared to 69% surveyed in 2013.
Today, only 36% of surveyed CEOs and 50% of surveyed CFOs believe IT is effective at basic services, down from 64% and 60% respectively since 2013.
At the same time, 43% of surveyed tech CxOs say their concerns about their technology infrastructure have increased over the past six months because of generative AI, and they are now focused on optimising their infrastructure for scaling generative AI.
Respondents report they are currently spending 29% more on hybrid cloud than AI, and, over the next two years, they expect to spend half (50%) their budget on hybrid cloud and AI combined.
As tech CxOs prioritise generative AI-ready infrastructure investments, two-thirds of surveyed CEOs cite that a strong tech CxO and CFO collaboration is critical to their organisation’s success.
However, a disconnect exists: only 39% of surveyed tech CxOs say they collaborate with finance to embed tech metrics into business cases, and just 35% of surveyed CFOs report being engaged early in IT planning to set strategic expectations.
Among the high-performing tech CxO respondents, the study found that organisations that connect technology investments to measurable business outcomes report 12% higher revenue growth.
“Tech leaders today are grappling with multiple business demands, made even more complicated by the rise of generative AI. They must navigate the challenges of modernising their IT infrastructure and scaling generative AI to support the business’ core competitive advantage, ” says Mohamad Ali, senior vice-president of IBM Consulting.
“In this evolving AI landscape, the relationship between tech CxOs and their finance counterparts has never been more important – aligning technology spend with business outcomes to drive real value from AI investments.”
Responsible AI is top of mind for tech CxOs, but there is a gap between intention and actions
For the majority (80%) of CEOs surveyed, transparency in their organisation’s use of next-generation technologies, such as generative AI, is critical for fostering trust.
Yet, most tech CxOs acknowledge their organisations are falling short on delivering core responsible AI practices at scale. And only half (50%) of respondents say they are delivering on key responsible AI capabilities for explainability – and even fewer say they are delivering capabilities for privacy (46%), transparency (45%) and fairness (37%).
Forty-one percent of tech CxOs surveyed reported an increase in their concerns about regulation and compliance as a barrier to generative AI over the last six months.
However, most (70%) tech CxO respondents see regulatory change as an opportunity versus only 50% of CEOs.
Tech CxOs are driving their organisations to rethink their talent strategy to meet the needs of the generative AI era
Sixty-three percent of tech CxOs surveyed agree that their competitiveness will hinge on their ability to attract, develop, and retain top talent.
However, 58% of tech CxOs surveyed say they are having difficulty filling key technology roles, and only 27% of respondents identify talent as a top priority.
* Over the next three years, tech executives anticipate a surge in skill scarcities over key areas including cloud (+36%), AI (+29%), security (+25%) and privacy (+39%).
* 40% of respondents report an increase in their concern over the past six months.
* More than half (54%) of tech CxOs surveyed blame financial pressures for hindering their ability to invest in technology talent.
* Many tech CxOs surveyed (69%) say they are turning to business partners as a source for specialised skills.