Generative AI

2023 was a standout year for artificial intelligence (AI) with Generative AI claiming most of the limelight and a significant proportion of the venture capital investment dollars. It was a year that saw everyday public users seize the opportunity to boost their productivity using chat-based AI tools. However, many digital enterprise leaders remain intent on sharpening their focus on return on investment (ROI) and strategising the effective deployment of AI at scale (see our previous post).

Over the next 12 months, AI will become increasingly integrated into product offerings. However, with options from enterprise players to help construct bespoke tools against independent use cases (e.g. AWS Bedrock, Microsoft Azure OpenAI, Google VertexAI), the "build or buy" decisions for CIOs will be complex. Nonetheless, we are trending towards more AI tool deployments at scale.

AI's successful impact across enterprises will herald the beginning of the "co-pilot" model flip -moving away from a situation of knowledge workers tasking AI to conduct specific processes, to more autonomous operations with “AI Agents” working seamlessly in the background. Research by McKinsey supports this by suggesting that automation could replace 30% of all hours worked in the US by 2030.

With the relentless drive to harness AI, organisations will need to continue to prioritise the establishment of strong data management capabilities and analytical strategies - essential for informed business decisions. Digital leaders are also grappling with AI model governance, transparency and data protection.

Advancements in Generative AI and natural language processing are revolutionising our interaction with complex digital systems, making them more intuitive and nuanced. Digital leaders will start to think more deeply about their enterprise user experience to optimise productivity (and maybe enjoyment) across their organisation’s suite of tools and platforms.

Historically, we have been most likely to speak to smart speakers and mobile devices. This year, we anticipate an increase in the use of voice control systems, streamlining task completion. At the same time, Windows and Mac have been progressively building and developing speech recognition tools into their platforms for a few years - initially for user accessibility but likely to play a role alongside future augmented reality capabilities and headsets. Now, however, large language models have enabled virtual assistants to achieve human-level conversational capabilities so we can usefully speak to our computers more than we have previously.

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Cloud

We expect to see CIOs continue to be increasingly focused on managing costs across large enterprise cloud operations. The rush to the cloud over the last decade has sometimes led to a lack of strategy resulting in significant cloud sprawl. The flexibility and scalability of cloud were meant to reduce the operating and administrative overheads. However, lack of understanding resulted in users carrying a belief that cloud is "cheap" and therefore pushing everything into the cloud and falling foul of costs for unnecessary services continually left running or higher than anticipated fees for data egress. In the US for example, the Government Accountability Office investigated and recommended that the Department of Defense (DOD) track and report on data egress in order to reduce costs and minimise potential vendor lock-in.

ESG

Pushed by investors, regulators and employees, many more companies will likely systematise their ESG (Environmental, Social, and Governance) tracking and reporting with software tools. A recent survey of Chief Financial Officers (CFO) showed that 30% of finance leaders are now analysing how climate change scenarios will impact business and reporting this to the Board. ESG tracking and reporting tools help organisations monitor, measure and report key sustainability metrics and assist alignment to address strategic environmental and social trends and impacts. ESG tools providing insight into factors like carbon emissions, diversity and inclusion efforts and corporate governance structures will become increasingly important in enhancing regulatory and reputational impact.

Security

Importantly, digital leaders must not underestimate the potential for adversaries to exploit technological developments too. Sophisticated attacks including complex social engineering using GenAI and deepfakes, pose significant threats and should keep the CISO awake at night.

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At the start of the year, former Secretary of State for Defence, Ben Wallace MP, warned of the risks at a national level, but at a company level, preparedness should be a continued focus for the Board. This will renew deeper interest in tools and strategies for integrated cyber risk management, including defensive applications, staff training, recovery plans and insurance.

Conclusion

Technological advancements, particularly in Generative AI, set the stage for further transformative shifts in digital organisations. As AI integrations gain momentum, organisations must prioritise robust data management, AI governance and ethical considerations.

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The user experience will evolve with voice control systems, while cloud strategies and cost management continue to be complex focal points for CIOs. ESG tracking and reporting will gain prominence, and in cybersecurity, the power of GenAI in social engineering underscores the need for comprehensive risk management.

As we step into the new year, 2024 promises great innovation and we recommend strategic vigilance to navigate challenges and opportunities.

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