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For years, even decades, information technology has focused on becoming software-defined, with smarter, faster capabilities through more flexible and adaptable architectures, advanced analytics, and artificial intelligence. Yet businesses don’t seem to be seeing any improvement. Instead, they’re becoming increasingly anxious about the state of their IT capabilities.
According to a survey of 2,500 business and technology executives released by IBM’s Institute for Business Value, top business leaders have about half the confidence in the effectiveness of basic IT services as they did 10 years ago. AI is supposed to improve the situation, but generative AI is making executives even more dissatisfied with the current IT situation.
And AI engineering is the next frontier in technological advancement.
At least, that’s what CIOs, CTOs, and CDOs are telling us. While IT leaders prepare to accelerate generative AI (gen AI) adoption in their organizations, C-suite confidence in their IT teams’ ability to deliver basic services is declining. A significant percentage of tech executives in the sample (43%) said generative AI has raised concerns about their company’s technology infrastructure.
Fewer than half (47%) of business leaders surveyed believe their company’s IT organization is “effective at providing basic services,” down from 69% in 2013. Only 36% of CEOs surveyed believe IT is effective, down from 64% in 2013. Chief financial officers rate IT a little more highly, with 50% acknowledging IT’s effectiveness, down from 60% in 2013.
What is at the root of this dissatisfaction? First, business leaders have higher expectations of what technology should deliver. Companies are increasingly turning to IT to create competitive advantage in a digital-centric, AI-infused world. What’s more, business leaders themselves are more tech-savvy than their peers were a decade ago. This trend will intensify as a generation that has spent almost their entire lives on the internet moves into management roles. They expect everything to happen at internet speed or be instantly resolvable through online services.
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That’s why technology leaders and experts “must be part mastermind, part maestro,” say the IBM study’s authors. “They need to team with business leaders who speak their language, not technical jargon, to design technology strategies across data, security, operations, and infrastructure, understand needs, imagine possibilities, identify risks, and align investments.”
Surprisingly, there appears to be little communication or collaboration between business and IT leaders. Only 39% of surveyed technology CxOs say they work with finance to incorporate technology metrics into the business case. Thirty-five percent of surveyed CFOs report being involved early in IT planning to set strategic expectations.
Plus, 5 ways to prepare for how generative AI will impact the IT industry
Today’s technology leaders and professionals must look beyond computing resources and integration: “They need to build multidisciplinary teams to deliver on their strategies, inspire their employees, and encourage experimentation and novel ideas that delight their customers,” say the IBM authors.
“This is an enormous responsibility, and one that many technology leaders have struggled to fulfill. As the scope of technology has expanded over the past two decades, new roles have been added. Yet despite growing teams of technology leaders, technology has not been consistently and effectively integrated into the strategic decision-making of the business,” the authors elaborate.
Technology must be part of this strategic thinking: At least 43% of business leaders are concerned about whether they have the right infrastructure to handle next-generation AI, and they expect to spend 50% of their budgets on a combination of hybrid cloud and AI over the next two years.
And what do Gartner’s 2024 Hype Cycle predictions tell us about the future of AI (and other technologies)?
Here’s what the report’s authors suggest for improving IT service delivery to businesses:
Get more women involved in IT and AI. “Generative AI is creating new urgency about the lack of women in the historically male-dominated field of IT,” the report states. “In the 2024 IBM IBV Annual Women in Business Survey, 67% of female executives said there aren’t enough women leading the conversation about generative AI. When bias manifests itself as harmful or inaccurate AI model output, a diverse workforce is a safeguard to improve trust and brand equity. Tech leaders should encourage women to become subject matter experts in IT and AI, not only to increase the talent pool but also to gain critical perspectives that will shape the coming AI transformation.”
Make paying down technical debt a business imperative: “Refactor legacy systems to be AI-ready. Reframe legacy infrastructure challenges as business impediments preventing rapid AI adoption at scale.”
Build better with AI: “Modernize your applications for hybrid cloud and AI with gen AI code assistant. Optimize your infrastructure for AI everywhere. Review the current state of your infrastructure with AI everywhere in mind.”
Thoroughly measure the impact of technology on business outcomes: Notably, among high-performing technology CxO respondents, as defined in the survey, we found that organizations that link technology investments to measurable business outcomes report 12% higher revenue growth.
Talk about outcomes, not data: “Find a common language with the business to focus on common goals based on improving customer experience and delivering outcomes. Use storytelling and scenario-based exercises to ensure technology and the business have a shared understanding of the customer journey and pain points.”
Engage your employees: “Empower your employees to define how they can use AI to do their jobs better and faster. Turn reskilling and upskilling into advancement opportunities. Create AI academies or centers of excellence where employees can develop their capabilities.”
Today, running a successful business also means running a successful technology company. Expectations from technology are much higher than they were 10 years ago, and they are only growing.