The scale and complexity of generative AI (GenAI) is driving tech leaders to reassess their current technology infrastructure, according to a new study from the IBM Institute for Business Value.
The global study of 2 500 C-level technology executives (tech CxOs) from 34 countries revealed that 43% of those surveyed 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 executives, including in South Africa, are grappling with the complexities of integrating AI while modernising their IT infrastructure,” says Ria Pinto, GM and technology leader at IBM South Africa. “As businesses increasingly turn to AI to drive growth and innovation, the challenge lies in aligning these cutting-edge technologies with legacy systems ensuring that IT infrastructure can support the demands of today’s dynamic business environment.”
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.
However, most tech CxOs acknowledge their organisations are falling short on delivering core responsible AI practices at scale. 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%). Though there is room for improvement, South African organisations fare better at delivering AI capabilities with fairness (45%).
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, with South Africa CxOs prioritising customer experience (49%).
- 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%). In South Africa, tech executives expect the scarcity to be mostly isolated in cloud (+50%) and AI (+55%).
- 40% and 49% of global and South African respondents report an increase in their concern over the past six months respectively.
- 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%) – including 53% in South Africa – say they are turning to business partners as a source for specialised skills.