In a September 2024 Report, Gartner reveal one of the top concerns CIOs have is around setting their AI strategy.
Just like with any IT project, taking things too slowly might let competitors pull ahead, while rushing can come with its own hurdles. Most CIOs aim to find that sweet spot in the middle, where the adoption speed aligns perfectly with the organisation's priorities.
When it comes to AI, CIOs are exceptionally equipped and strategically positioned to tackle this challenge because they comprehend the intricate interactions between technologies. They also have a comprehensive view of the enterprise and how AI integrates into its broader transformation plans.
1. CEOs and boards have never had higher expectations for the business impact of AI.
2. CIOs are facing significant pressure to swiftly determine how AI can be leveraged to add value within their organisations.
3. AI heightens the demands on technology readiness, encompassing security, infrastructure, process, and development capabilities.
Despite the huge AI hype, turning the promise of AI into reality is not a given: 49% of leaders highly involved in AI report that their organisations struggle to estimate and demonstrate the value of AI.
Its crucial to create an AI strategy revolving around a vision that is fully aligned with business goals, market conditions and competitive pressure regarding the use of AI.
In addition, the AI strategy should identify key value opportunities as well as risks. Make the AI strategy executable by setting priorities for a portfolio of concrete business related AI initiatives and by setting planning goals to build and mature an AI operating model.
According to KPMG, the 3 key areas concerning AI that CIOs are focussing on in 2024 are;
AI spending is projected to hit $26 billion over the next three years. Unsurprisingly, two-thirds of IT organisations are considering dedicating over five percent of their budgets to AI initiatives.
CIOs are increasingly taking on the primary leadership role for AI budgets and priorities within organisations, surpassing other executives or business roles. An April 2024 IDC study reveals that CIOs will manage AI resources in 53 percent of the organisations surveyed.
AI is being applied across a variety of use cases, ranging from standard enterprise productivity tools to customised solutions. According to Gartner Research, 55 percent of CIOs plan to implement generative AI in some capacity within the next two years.
CIOs must decide their own priorities.
While most organisations are excited about the potential of AI to enhance their operations and workflows over the long haul, they're not quite ready to dive in at full speed just yet. In fact, more than 60% of organisations mention that outdated infrastructure and data systems are holding back their generative AI plans, according to a recent report from Hitachi Vantara.
Almost 75% of IT leaders say they need to update their infrastructure before they can really get moving with generative AI projects.
Organisations that have begun their transformation efforts have an advantage, even if AI is not the primary motivator. Norwegian Cruise Line Holdings experienced this advantage when it completed a 15-month AWS migration of its shoreside technology earlier this year, resulting in enhanced performance and more efficient operational infrastructure.
In a recent CIO Dive article, Georgios Mortakis, CIO and CISO at Norwegian Cruise Line Holdings explains
We were trying to modernise infrastructure and provide an underlying foundation for the application development teams to take advantage of such modernisation.
It's common to find the Cloud frequently paves the way for the accelerated adoption of emerging technologies.
Any proof of concepts and any ideation around looking into expanding further with use case areas around AI was facilitated by having an infrastructure that was friendly towards SaaS initiatives,” Mortakis said. “We’re taking a responsible approach, but that doesn’t necessarily mean cautious and 'Let’s go slow.
Crafting a strategy and pace that align with an organisation's technological maturity, risk tolerance, and growth objectives requires careful balancing. Of course CIOs will aim to introduce innovative solutions to the business while safeguarding against potential risks.
Even with the ups and downs in the economy, IT budgets have mostly held steady. In fact, 54% of CIOs are looking forward to budget boosts this year, while 35% are expecting things to stay the same.
The extra funds are mainly aimed at ramping up security (38%) and diving into exciting new tech like AI (34%). On the flip side, if budgets tighten, it’s usually due to how the company is performing (67%) or economic uncertainties (64%).
Developing a strong AI strategy is essential for companies to remain competitive. By effectively integrating emerging technologies, organisations can streamline their processes, enhance decision-making, and provide personalised customer experiences.
However, it is crucial to address ethical and security challenges, ensuring that the use of AI is responsible and sustainable. Taking a proactive approach to AI strategy not only drives innovation but also prepares businesses for the future.
Gartner: Top CIO Challenges in 2024
TechTarget: Top CIO Challenges
Forrester: 10 most important Cloud trends