By: Fernando Ramirez, Client Services Partner

In October 2023, members of the AHEAD Strategy and Advisory teams attended the Gartner IT Symposium in Orlando, Florida. We had fun, learned a lot, networked, saw Magic Johnson, and met Chewbacca at Hollywood Studios. Well-deserved thanks and kudos to the Gartner team that organized the event!

Unleash Possibilities was the motto for this year’s conference. A wide range of topics were discussed, but most conversations revolved around Generative Artificial Intelligence (gen AI) – its use cases, value impact, implications for the workforce, and its ever-present environmental, ethical, and security risks. CIOs, digital executives, and thought leaders shared their experiences with the technology so far, in addition to plans and recommendations for making effective and responsible use of it.

The overwhelming consensus is that AI capabilities will define the competitiveness of individuals, companies, and entire nations from this point forward, and success will be shaped by the ownership of AI assets and the ability to leverage and collaborate with them. AI will also accelerate – and be accelerated by – other technology trends, such as the widely-adopted cloud and the still-emerging field of quantum computing.

With that said, caution is crucial. New risks are already surfacing, and there are certainly some valid concerns about the development and implementation of gen AI. As a result (and rightly so), special attention is being paid to the responsible use of this technology. We should expect the role of CISOs to expand in the near term, becoming vital components of the C-suite. Further, the energy required to process the exponentially growing amounts of data will increase, generating supply and environmental challenges and requiring the intelligent management of consumption and costs.

A new type of customer—the machine customer—will appear, and companies will have to learn how to interact with them and attend to their demands. However, the value of the human touch will increase as well. Certified human creations will be scarce, and people will pay top-dollar for them. Companies will try to attract seasoned, pre-AI era talent capable of differentiating their thinking from that of AI. Comprehensive change management will be imperative to navigate the complexity of preparing organizations to accelerate human-machine collaboration without sustaining a negative impact on the human workforce.

The most critical aspect of AI adoption (or any emerging technology adoption, for that matter) is the ability of business leaders to understand its application and value – and many do. In fact, plenty of C-level executives have already ‘played’ with some gen AI solutions, indicating that they truly understand and welcome its potential. Ask them if their reaction to Blockchain was the same (hint: it wasn’t). The fact that applicable use cases are already being identified and embraced by leaders indicates that organizations are excited (and scared) about AI – and ready to invest.

For now, however, something will throttle the rate at which investments are made. In the short and medium term, AI will coexist with another powerful force: inflation. Companies’ and nations’ debt is high, and they need to refinance it with interest rates at historic peaks that aren’t likely to drop anytime soon. This means leaders must be deliberate in the way they prioritize investment, streamline operations, and cut costs. Morgan Stanley’s 3Q23 CIO Survey suggests that IT budgets will increase for Q1 2024, but that doesn’t make quite enough room for the appetite to invest in innovation. In this context, two elements are paramount:

1. Organizations must have an ROI-driven decision-making process.

A well-defined investment strategy and roadmap that executives and direct reports are keenly aware of is essential for succeeding and creating competitive advantage. This requires a clear view of the return on every investment, distinguishing between drivers of growth, productivity, and efficiencies, and those that are simply needed to keep internal operations running. It may sound obvious, but it isn’t easy to understand which are strictly required when you have tech vendors pushing to sell upgrades and refreshes. Organizations must be prepared for it, bringing functional and technical expertise to their budgeting and investment processes.

2. Organizations should continue improving cost management hygiene.

Despite all of the efforts to manage costs more effectively, organizations still have room for improvement. This statement is especially true in companies growing both organically and inorganically. The basis of strategic financial planning and cost management is having accurate visibility into the total cost of ownership of the organization’s assets and having the ability to forecast spend based on business scenarios. This enables strategic financial decision-making and facilitates allocating costs and charging back to the appropriate stakeholders in the organization. Further, having an inventory of all company assets, their purpose and usage, and the processes and tools needed to manage them is essential to maximize productivity and reduce inefficiencies or underutilization. Once these fundamentals are in place, an organization will be able to uncover hidden operational excellence levers and design the transformation journey more easily, distinguishing between quick wins (e.g., vendor negotiation or licensing management) and large transformation initiatives (e.g., gen AI, automation, or asset rationalization).

Ultimately, leaders must learn how to unleash budget in order to unleash the powerful technology possibilities on the horizon.

To learn more about how AHEAD helps organizations navigate the complexities of innovation, get in touch with us today.