While generative AI continues to present new opportunities, other IT trends will reshape industries and business decisions

 

Generative AI had a breakout year in 2023, with all indications that it will usher in even more ways to drive business growth in the coming months.

According to an International Data Corporation forecast, enterprise spending on generative AI solutions could reach $143 billion in 2027, up from $16 billion in 2023, with the world’s largest companies expected to allocate over 40% of their core IT spend to AI-related initiatives.

“Enterprises around the world will continue to investigate the opportunity to weave AI tools and solutions — including generative AI — into their broader modernization plans,” said Nicolas Sekkaki, Global Practice Leader for Applications, Data and AI at Kyndryl. “The consensus is that the potential of generative AI far outweighs the risk. Still, C-suite leaders are mindful of risks, and even as they push to test and innovate, there will be a lot of conversation and consulting work around maintaining privacy, IP protection, stopping data leaks and harnessing costs.”

However, other trends — like smart cloud strategies, using technology for climate progress and bolstering security and resiliency systems — also will define the tech landscape and decision making in the year ahead. 

Below, Kyndryl’s global practice leaders share their perspectives on the top trends and the steps organizations can take to navigate 2024.

Trend #1: New ways of working will drive culture, technology and workplace transformation

Why it matters: Since companies began equipping themselves for an economy based, in part, on hybrid working a few years ago, the need for digital agility has only accelerated. “In addition to continuing their investments in digital workplace technologies to improve efficiency, productivity, security and capability, enterprises across the globe will begin to focus more on the experience,” said Ivan Dopplé, Global Practice Leader for Digital Workplace at Kyndryl. “Companies need to invest now in systems and tools that enable increasingly scarce talent to maximize its potential.”

Indeed, whether remote, in-person or a mix of both, skilled workers seek employers with supportive corporate cultures. For most, that means working for a company that practices empathy, values diversity and enables (and encourages) people to take ownership of their careers. Technologies like AI and cloud are helping to drive these trends, but employers must integrate them with human-centered strategies to attract and retain top talent. With a clear purpose and the right values, companies can deploy technologies that build teams, strengthen feelings of belonging and reduce friction in the completion of daily tasks.

What you need to do:

✓ Survey your workers to gain valuable feedback on business processes, frictions and roadblocks, and overall job satisfaction.

✓ Revisit your corporate culture to align it with the purpose and values that drive inclusion and productivity.

✓ Work with a partner who understands your business, and will collaborate with you on scalable, best-in-class AI-enabled solutions that will help protect your investments.

Trend #2: Data governance will emerge as the critical factor in AI adoption

Why it matters: Everybody wants a new skyscraper, but any building must stand on a solid foundation. In the case of both enterprise and generative AI, that foundation is data. Enterprises lacking the in-house skills to manage their data will need trusted partners who are experts in data governance, business processes and the appropriate best-in-class applications for their industries. Only then will AI-infused IT estates deliver essential business value. “It’s important to have well-organized data for your AI to run on,” said Sekkaki. “It’s like if you were on a train going full speed — you better have tracks to sustain that speed.”

What you need to do:

✓ Ask the right questions to define your organization’s desired business outcomes.

✓ Have a comprehensive data strategy and governance, and build your data platform.

✓ Invest for the future — AI is here to help.

It’s important to have well-organized data for your AI to run on. It’s like if you were on a train going full speed — you better have tracks to sustain that speed.

Nicolas Sekkaki

Global Practice Leader, Applications, Data and AI

Trend #3: Smarter cloud strategies will help enterprises navigate rising costs

Why it matters: The pace of public cloud adoption has eased somewhat, despite cloud’s obvious advantages in systems visibility, cybersecurity and the ability to deploy AI across connected IT estates. “Despite the slowdown in the last year, cloud growth will certainly continue,” said Harish Grama, Global Cloud Practice Leader at Kyndryl. “Business leaders are going to be considering how to implement generative AI and carefully examining their workloads and architecture with an eye to efficiency. The reality is setting in that driving value with cloud requires strategic effort.”

And then there’s the skills gap. Hybrid cloud environments enable today’s operators to manage mainframes — which remain vital to many core-infrastructure industries — even as those trained in mainframe operations reach retirement age. So the answer is not to walk away from cloud environments, but to design and manage them for maximum benefit and cost effectiveness.

What you need to do:

✓ Plan for a future in which public cloud and hybrid cloud environments will deliver needed business results while controlling costs and managing skills gaps.

✓ Get help to design a long-term cloud strategy that enables your business to be proactive instead of reactive to the rapidly changing IT landscape.

✓ Be aware of the trends and real-world experiences of generative AI, even before implementation.

Editor’s Note: Harish Grama passed away in December 2023. Kyndryl honors his legacy as a thought leader by sharing his vision for the cloud industry in 2024.

Trend #4: The mainframe will remain relevant as part of a hybrid environment

Why it matters: Predictions that enterprises would move their entire workloads and data to the cloud have turned out to be overstated — it is clear a hybrid approach is the way to go. The mainframe is alive, modern and remains the only platform that can handle the “failure is not an option” demands of the industries the world depends on every day. “It used to be that everyone was going to move off the mainframe to the cloud, and now it is all about how to leverage the platform in the right way, what workload should stay and what should move,” said Petra Goude, Global Practice Leader, Core Enterprise and zCloud at Kyndryl. “But guess what? History is repeating itself. Two reasons everyone didn’t move everything off is because of the high volume of transactions being executed and the cost of moving everything.”  

Indeed, mainframes can manage the vast amounts of data required for AI and IoT. But mainframes only can work wonders when in the hands of experienced operators. That’s why working with the people with the best mainframe skills will remain critical to the success of the enterprises and governments that rely on the superpowers of this timeless platform.

What you need to do:

✓ Join the 95% of businesses that are adapting a hybrid approach to mainframe modernization by determining the right platform for the right workload.

✓ Realize the business value of 9% to 11% increased profitability that can be achieved annually from mainframe modernization.

✓ Trust the mainframe to adapt and grow — reinventing itself to deliver value in nearly every business environment — but secure the expert skills needed to future-proof the platform.

Trend #5: As AI-driven devices proliferate, data protections and reduced latency will become paramount

Why it matters: 5G is great for mobile phones, but its primary value lies in its ability to connect internet-enabled devices — whether factory robotics or self-driving vehicles — rapidly, reliably and securely. Rapidly and reliably because nobody wants their self-driving car to “get confused” or stop working at 70 miles per hour. Ditto on the production line, where manufacturers must be able to modify or change instructions instantaneously based on demand. And securely because the IT estate “chain of custody” of confidential and proprietary data is only as strong as its weakest link. Want to prevent wrongdoers from stealing trade secrets from your warehouse, or hacking into your automotive production line by exploiting access from a stolen car? You need a modern network.

“We're at point in which new technologies around software — including security embedded in network, and AI analytics helping with models — are mature and ready for prime time,” said Paul Savill, Global Practice Leader, Network & Edge at Kyndryl. “AI is going to transform operations, and it’s going to change general management decision-making and how to optimize cost structure. And that’s why enterprises are seeing that it's time to make changes in their networks to prepare to adopt these new technologies.”

What you need to do:

✓ Assess your current network, including datacenter and networking equipment to determine its weak points for failure and if it’s still being supported by the vendor.

✓ Determine the projected cost savings for running a modern network that enables real-time decision making while protecting your data.

✓ Partner with experts in your industry, your business to adopt the latest cloud networking technologies.

Trend #6: Cyberattacks will increase in number and sophistication

Why it matters: Everybody’s talking about it, but nobody wants to think about it: Bad actors can launch cyberattacks to shut down operations, hijack organizational agendas, and destroy reputations and trust. Cyberattacks have become commonplace across every industry and government function. Systems modernization to optimize security and resilience requires more than patchwork and a new coat of paint. “During the pandemic, the majority of organizations globally pivoted from modernizing already aging infrastructure and introduced new digital capabilities to enable new ways of working for existential reasons — often abbreviating or skipping security control,” said Kris Lovejoy, Global Practice Leader of Security & Resiliency at Kyndryl. “The result is a mix of very old and very new but insecure infrastructure. What must happen now will be difficult. It’s going to require spending. But businesses will need to assess and deal with the complexity and age of their environment to become more resilient.”  

What you need to do:

✓ Understand that IT systems with advanced security and resiliency require strong and modern foundations since bad actors (who may use malicious AI) can — and will — exploit any weakness.

✓ Lower the barriers and expand access to cybersecurity training and hiring. People — and their diverse perspectives — are the best weapons against cyberattacks.

AI is going to transform operations, and it’s going to change general management decision-making and how to optimize cost structure.

Paul Savill

Global Practice Leader, Network & Edge

Trend #7: Sustainable technology will be a priority

Why it matters: Despite a challenging Environmental, Social and Governance environment, the research is clear: Consumers care about the brands they support, professionals want to work for companies that align with their values and investors evaluate companies on how they manage these risks. “Organizations have to adapt to climate change while also managing the rapid pace of technological change,” said Faith Taylor, Global Sustainability & ESG Officer at Kyndryl. “To fully leverage technology, IT and sustainability leaders must develop scalable projects that can integrate environmental solutions within current business practices. Climate change is a global issue, so we need far-reaching partnerships and collaboration to make a difference.”

For organizations to reach their environmental goals, they need to understand where they are in their sustainability journeys. In 2024, enterprises will continue to invest in becoming more data driven to transparently measure their progress and make more informed sustainability decisions. Organizations will look for guidance on creating a sustainability-centric culture and start to meaningfully reduce their carbon footprints.  

What you need to do:

✓ Commit to reducing your business’ carbon footprint, and partner with other businesses and suppliers that have made similar commitments.

✓ Link environmental sustainability goals to business and employee objectives.

✓ Start small if you must. Do what you can. And then do some more.

For more insights into how mission-critical IT infrastructure will evolve in the year ahead, read our report on several secular trends.

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