A little over a year ago, a new phase of the digital business era began with OpenAI’s launch of ChatGPT. The generative AI (GenAI) boom is expected to roundly influence what comes next: AI Everywhere. AI is expected to become a driving force of our digital future, impacting individual lives, consumers, citizens, workers, businesses, and society.
Henry Ford said, “The only real mistake is the one from which we learn nothing.” What should we learn from the past to determine the way forward?
After the 2023 hype (see Reimagining an AI Everywhere Digital Future: IDC EMEA FutureScape 2024), 2024 is expected to be the year when AI becomes real for organizations. The focus is expected to remain predominantly on GenAI for many organizations through the first half.
When looking at the future, there are urgent actions EMEA organizations should take to accelerate their AI Everywhere readiness. And there are some useful lessons we can learn from the past.
According to IDC’s Future Enterprise Sentiment Survey, in 2022 just 9% of EMEA organizations considered their digital transformation (DX) projects to have been successful. This is a clear indicator of the multiple pitfalls that can plague a DX journey, including organizational silos, lack of ROI, unreasonable time frames for completing the initiative, lack of internal skills and change management, and gaps in infrastructure requirements.
Looking at the DX challenges of past years provides us with a clear indication regarding “things not to do/forget” when charting a successful AI Everywhere road map.
In October 2023, when we asked EMEA CIOs about their spending plans for 2024, 91% confirmed they expect to maintain or increase their budgets in 2024. That investment needs to drive a return.
If you don’t want to follow the organizations that saw digital projects fail in past years, what should (or shouldn’t) you do?
5 Lessons for your AI Business Strategy
- Don’t regard AI as an IT tool. It’s a business reimagination. AI should not be seen just as another tool, but as an opportunity to transform the business to become more efficient, deliver new value to customers, and innovate with products and services. Aligning technology and AI investments to business strategy and requirements is critical to achieving higher returns in the age of digital business.
The stakes are high — these decisions will determine the success or failure of businesses. From developing an overarching strategy and identifying the right business use cases, to deciding whether workloads will work best on premises, in the public cloud, or in a hybrid environment, there are numerous decision points. Dealing with the challenges of a potential proliferation of AI applications requires foresight and forward-looking leadership.
As mentioned by the CEO of a Global Professional Service organization, every leader in the organization should engage at least with the “what” of this technology, understanding what the real use cases and opportunities are. Initially, the budget for experimenting with the technology will come from the IT and data department, but business will increasing lead when progressing with the use case road map budget.
With so many decision makers, having a coordinated holistic approach is paramount. Whether through the creation of new roles (e.g., chief AI officer) or within the remit of existing ones, organizations need to manage AI initiatives through a defined organizational structure. There’s a need to have a structured and coordinated approach from the AI strategy to the use cases road map, all surrounded by strong governance to foster a responsible AI deployment.
- Don’t forget to measure. Quantify the digital business impact. In the past, we talked about the digital ROI gap — the gap between digital investments and the ability to generate results from them. The greater cautiousness driven by the volatile macroeconomic scenario, combined with tech pricing concerns, imposes a laser focus on ROI. It is imperative for organizations to define the business outcomes they want to achieve with AI, check them against the investments needed, and measure the progress toward their achievement to adjust the tech strategy procurement if needed.
- You won’t have three years to show results. Start small, think big. The use case prioritization exercise should factor in the quantification of business value, the cost and capabilities requested, and the risk of the initiative — as well as the time to outcomes. Make sure your use case portfolio is well balanced, with several smaller projects that have a shorter time to market and can better demonstrate business value, and few mid-sized ones that have a slightly longer timeline.
The CEO of a non-profit organization told us, “We have reengineered the technology road map to completely align to business requirements. What have we changed? We reprioritized projects so we are now working on fewer bigger projects and then a lot of small, more innovative projects that are creating value in the in the short term.” Particularly regarding GenAI initiatives focused on productivity, the CIO feedback is that these need to be proven within two to six months.
- You won’t go far without the basics. Prioritize building a secure, intelligent architecture and data foundation. If you are looking at AI as an opportunity to transform the business and not another tool to plug and play — which is the way you should approach the AI Everywhere transformation journey — you should not overlook the importance of the required foundations and the alignment with partners and the broader ecosystem.
A successful AI road map can only be realized through a solid, agile and intelligent technology backbone. This must comprise key technology enablers, foundational data and analytics, cloud for scale and agility, security technologies to ensure cyber protection and remediation, as well as regulatory compliance and smart risk mitigation.
A well-governed data system is critical to ensure data quality, trustworthiness, and actionability. According to IDC’s Digital Executive Sentiment Survey (September 2023), only 53% of EMEA organizations have integrated data sets and effectively manage them to deliver returns.
- Don’t underestimate the importance of change management. Humans should be at the center. As happened in the past 200 years, industrial revolutions have brought tech closer to humans, unlocking new opportunities. Similarly, we are now undergoing an industrial revolution powered by AI — and the human element should remain central to the process.
A main pitfall companies should avoid is not considering it a change management program. Developing the right culture and skills is critical. This applies to all organizational levels. According to European CEOs, the top skill to be successful in their role is AI proficiency. Engaging all stakeholders from the get-go is key for successful AI projects, as we have seen many digital initiatives fail because of organizational silos.
The CEO of a fintech company, for example, has championed the development of an AI certification program for the entire organization. The program has multiple levels and is mandatory for all employees. As a true change management program, the members of the leadership team actively drove change in the organization. They were the first to complete the certification program and developed guidelines and procedures for a responsible use of the tech.
Similarly, a member of the IDC CIO Advisory Board highlighted the employee journey as one of three critical pillars to be successful on the journey: Build transparency on upcoming tech needs and train the people to adopt and leverage future technologies.
Practical Steps to Move Forward on Your AI Journey
In a nutshell, here’s what you should do:
- Bring the C-suite dream team together to develop an aligned strategy.
- Create a road map for use cases.
- Embed GenAI’s transition into a more comprehensive AI strategy.
- Measure your AI-enabled business impact.
- Decide on your next infrastructure approach: Build, buy, amend, or have it managed.
- Plan for an agile yet secure digital platform with a strong data foundation.
- Engage employees and build talent for new ways of working.
- Build strategic and trusted partnerships and ecosystems for co-innovation.
As we have seen since the beginning of DX, IT teams and CIOs will play a central role in the AI Everywhere age. The increasing importance of the CIO role and the opportunities it brings in 2024 are unmistakable.
With the expected increase in IT investments, especially in the field of AI, CIOs face a unique opportunity to position themselves as a driving force behind the next level of transformation. However, it should be emphasized: These investments should not be made lightly.
The transition to the AI world requires careful planning, resource allocation, and implementation, and will likely impact the operating and organizational model. But as a medtech CIO put it, if you can learn from the past and embrace the future, “The future will be bright.”