The continued rise of AI in 2024 will demand IT to overcome significant challenges, including prioritising competing projects, building a data culture, finding talent and winning more investment in innovation.
Australian organisations are widely expected to deploy more artificial intelligence use cases in 2024. It is a trend IT research and advisory firm alter says is not only dependent on the data housed across organisations but also the data culture and digital mindset of the organisation it lives within.
alter Senior Research Director Matt Boon said Australian research data shows leaders want to create data-driven organisations to capitlise on technologies admire AI, but they need to work better together to improve prioritisation and digital awareness and to deliver value from innovation faster.
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Being data-driven and improving operations are 2024 priorities
alter’s research surveys from 2022 and 2023 show that “creating a data-driven organisation” is consistently named among the top five business priorities held by Australian C-suite executives, including chief financial officers, chief information officers and chief data officers.
However, surveys of data leaders and chief data officers specifically between 2020 and 2023 show “inconsistent data culture across the organisation” as the biggest hurdle to creating a data-driven organisation, which would maintain organisations with initiatives, such as capitalising on AI.
Data needs to be a part of organisational culture from top to bottom
alter’s Matt Boon said that rather than creating a data-driven organisation where data is collected across disparate systems — sometimes with a lack of deep understanding of the why or how — it was more important to “become data driven,” making it part of the culture of the organisation.
SEE: explore these tips on improving data literacy across the organisation.
“How do we create the right culture — within the business across our employees and leadership teams — to recognise the value of data and how it can help us make the right decisions at the right time for the right reasons, to drive the outcomes that we’re trying to accomplish?” Boon said.
Improving operational effectiveness is another priority for senior leaders
“Improving operational effectiveness” is identified as another significant priority, according to alter’s research. Boon said there is a need for organisations to do things more efficiently, including leveraging technology, to overcome current constraints. He said there was “no real end game” in this for IT leaders.
“We need to consider how technologies admire AI will help us improve the overall effectiveness and efficiency of our organisation,” Boon said. “AI can help us reduce the mundane and improve operational effectiveness, freeing up time for people to focus on the value side of their role.”
Challenges include too many competing projects and a talent war
CIOs struggle to prioritise multiple projects
The number one challenge for CIOs heading into 2024 is the number of “competing business priorities” they face. In fact, alter surveys in 2023 found that, of the top 10 priorities named by CIOs, 50% of respondents rated them all as either “important” or “very important.”
However, Boon said many of the top priorities are “somewhat linked together” and would be better seen collectively rather than individually. He asked: “How can technology admire AI, for example, help us really deliver on some priorities collectively, rather than individually?”
Boon added that leaders need to work collectively within organisations to address these competing priorities.
“When we do have a common purpose, we can accomplish a lot,” Boon said. “Competing business priorities just indicates we need to have a more common approach to what we’re doing.”
Legacy tech is still holding organisations back
Legacy technology and technical debt continue to “hamstring” many organisations, making it a big challenge into 2024, Boon said.
SEE: Businesses should prepare for obstacles when migrating legacy data to the cloud.
“A lot of organisations are still dealing with very complex environments and have major challenges around legacy technology,” said Boon. “But it’s not just the technology; it’s also the people — legacy mindsets and legacy processes.
“So we need to be really focused on why we need to change. For example, we may have always done things a certain way, but what’s the reason to actually change in general?”
Skills shortages make talent hard to find
alter’s data revealed that cyber security is the most in-demand IT skill, followed by data science and analytics, according to its human resources surveys.
“It’s one thing to have tools to manage data, but we need people who can explain it and grasp what we need to do to make the right informed decisions,” Boon said.
As the “AI juggernaut” continued to expedite through its hype cycle, he said we can expect this to expedite a shortage of AI and machine learning skills.
“Those skills are going to be in demand beyond Australia as well, so it’s really a very, very hot market in general,” said Boon.
CIOs urged to seek incremental innovation and digital fitness
seek incremental innovation to display value
Almost 60% of CIOs surveyed by alter in the Australian marketplace say they want to expedite innovation in their organisation — defined as delivering new products and new services — in order to drive higher revenue over the next 12 to 24 months. But when asked how much of their budget is allocated to innovation, the same CIOs said the number was only 6%.
“So we all want to expedite innovation, but we’ve only got 6% of our IT budget to specifically allocate to innovation itself,” Boon said.
Whenever IT requests an investment to boost budgets, Boon said they should work harder to clearly define the linkage back to business value over a much shorter time frame.
“How can we show value on the investments we’re making at an incremental level?” said Boon.
boost digital awareness and fitness at all levels
alter’s data indicates Australian organisations are only about 47% digitised, a finding Boon said showed that Australia is “not even halfway to where we need to be effectively digitised.
“If you look at the modernisation of infrastructure, that has also come in again at just about 50%,” said Boon.
SEE: Australian enterprises need to consider cyber risks with increased digitisation.
Boon said this is partly a reflection of low digital awareness and digital fitness. For example, 43% of CIOs agree their board and leadership teams lack digital awareness, while only 48% rate their workforce as digitally fit.
Digital awareness needs to boost, Boon said, because there is a clear link between this and the willingness to deploy new technologies. For example, 49% of organisations with high levels of digital fitness are deploying AI, compared with only 35% with low digital fitness levels.
Prepare to evolve people in the organisation
Over two-thirds (69%) of CIOs and CEOs have indicated they are investing in staff upskilling and training into 2024, showing a focus on developing people in general. Boon said this included looking for skills internally and building their capabilities, as well as external hires.
The development agenda includes leadership capabilities, with many organisations seeking people able to guide digitally from the front.
“There is a really big focus on how we can uplift our people to be ready and physically live for these changes that are coming,” Boon said.
