Three predictions for AI and automation business adoption

AI’s honeymoon with the enterprise is coming to an end. It’s time to get to business.

That’s one of the main themes from IDC’s recent predictions report, “IDC FutureScape: Worldwide Artificial Intelligence and Automation 2024 Top 10 Predictions”.

But even though IT decision-makers will be scrutinizing AI and automation investments, you can rest assured they will invest. In 2023, enterprises worldwide spent $166 billion on AI solutions (AI software, hardware, and services), but that spending is expected to grow 27% per year to $423 billion by 2027, according to IDC’s report.

With FutureIT Los Angeles coming up on March 12, we asked event speaker Maureen Fleming, Program Vice President at IDC, to discuss her top three predictions for AI and automation business adoption. Read on for her thoughts.
Prediction 1: AI will be judged more by its tangible business impact
Until now, GenAI has been seen as an exciting new technology without the pressure of business outcomes. But that’s about to change, said Fleming, as executive leadership seeks to understand how AI and automation benefit the bottom line.

“Many organizations have been happy experimenting with AI and automation,” she said. “But by next year, leadership will ask hard questions, such as: ‘How much will it cost to integrate Gen AI into our business?’ ‘What new skills will our people need to manage AI and automation initiatives?’ and ‘How does it improve our financial performance?’

As for how Gen AI’s benefits will be measured, Fleming said it depends on each organization’s existing business KPIs (key performance indicators). Some KPIs are tied to customer satisfaction scores or revenue growth. In DevOps, KPIs may be improvements in software quality or time to value. For IT operations, the KPI could be a reduction in manual activities.

“You’re not reinventing KPIs for AI,” said Fleming. “It’s a matter of figuring out how GenAI ties into existing KPIs.”
Prediction 2: Generative AI digital assistants will interact much more with enterprise software

Influenced by ChatGPT’s conversational interface, many organizations and vendors are baking conversational AI features into enterprise applications for everything from sales to customer care to IT help desks.

As GenAI evolves, conversational digital assistants will likely become the de facto standard in the enterprise, IDC predicts.

“You can expect large-scale disruption in front-end software design to make room for conversational AI and automation features,” said Fleming.

“For instance, with a customer care enterprise app, you’ll simply ask it to retrieve the status of an order, and the AI will retrieve it within seconds. We’ll see more AI-based assisted behaviors within apps to address the difficulties we have using apps to do our jobs.”
Prediction 3: Companies will increase spending on hardware for AI and automation

By the end of next year, the Global 2000 will allocate over 40% of core IT spending to AI initiatives, according to the IDC report.

Fleming sees a large chunk going to compute-intensive, higher-cost hardware (such as Nvidia’s specialized servers) within that spending increase. After all, GenAI’s usage depends on servers with GPUs powerful enough to handle intensive tasks such as natural language processing (NLP), image generation, and the training of large language models (LLMs).

“Hardware spending will drive up the cost of AI adoption,” said Fleming. “So CIOs thinking about hardware budgets should factor in high-end servers that can accommodate GenAI workloads.”
Be cautious about AI adoption, but not too cautious
Generative AI is arguably the most disruptive technology in decades, said Fleming, and its impact on how we do business and get information is on par with the invention of the Internet browser.

“GenAI is changing how large companies operate and what skills and technologies are needed to succeed,” she said.

“If you’re not investing in AI and automation, you are already behind your competitors. You can still be cautious with AI, but not too cautious. Organizations that stay ahead of AI will disrupt those that are overly cautious.”

Maureen Fleming will be a speaker at FutureIT Los Angeles 2024 on March 12.