As Generative AI Grabs Focus, C-Suite Confidence In Basic IT Services Drops: IBM Study

While IT leaders are preparing organisations for accelerated adoption of generative artificial intelligence, C-suite executives' confidence in their IT team's ability to deliver basic services is declining, a new study by the IBM Institute for Business Value has found.

The survey of 2,500 C-level technology executives revealed that 47% think their IT organisation is effective in basic services, compared to 69% surveyed in 2013. Today, only 36% of the surveyed chief executive officers and 50% of the surveyed chief financial officers believe IT is effective at basic services, down from 64% and 60%, respectively since 2013.

At the same time, 43% of tech chief experience officers said their concerns about technology infrastructure have increased over the past six months because of generative AI, and they are now focused on optimising their infrastructure for scaling the technology. Respondents said they are currently spending 29% more on hybrid cloud than AI. Over the next two years, they expect to spend 50% of their budget on hybrid cloud and AI combined.

As the CXOs prioritise generative AI-ready infrastructure investments, two-thirds of the surveyed CEOs cited that a strong tech CXO and CFO collaboration is critical to their organisation's success. However, only 39% of the surveyed tech CXOs said they collaborate with finance to embed tech metrics into business cases, and just 35% of the CFOs reported being engaged early in IT planning to set strategic expectations. The study found that organisations that connect technology investments to measurable business outcomes reported 12% higher revenue growth.

"Tech leaders today are grappling with multiple business demands, made even more complicated by the rise of generative AI. In this evolving AI landscape, the relationship between tech CXOs and their finance counterparts has never been more important, aligning technology spend with business outcomes to drive real value from AI investments," Mohamad Ali, senior vice president at IBM Consulting, said.

For 80% of the CEOs surveyed, transparency in the use of next-generation technologies, such as generative AI, is critical for fostering trust. Yet, most tech CXOs acknowledged their organisations are falling short on delivering core responsible AI practices at scale.

Only 50% said they are delivering on key responsible AI capabilities for explainability, and fewer are delivering capabilities for privacy (46%), transparency (45%) and fairness (37%). Of the tech CXOs surveyed, 41% reported an increase in their concerns about regulation and compliance as a barrier to generative AI over the last six months. However, 70% tech CxOs see regulatory change as an opportunity versus only 50% of the CEOs.

Tech leaders are driving their organisations to rethink their talent strategy to meet the demands of generative AI. Of those surveyed, 63% agreed that their competitiveness will hinge on their ability to attract, develop and retain top talent. However, 58% admitted having difficulty filling key technology roles, and only 27% of respondents identified talent as a top priority.

Over the next three years, tech executives anticipate a surge in skill scarcity over key areas, including cloud (+36%), AI (+29%), security (+25%) and privacy (+39%). More than half (54%) of tech CXOs cited financial pressures as hindering their ability to invest in technology talent.