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Data and AI

White paper: On Solid Ground for AI-Everywhere

Article May 6, 2024 Read time: min

Note: The following excerpt is from a Harvard Business Review Analytic Services white paper. Our related webinar further explores themes from the paper. 

Few technologies have raced to mainstream adoption as quickly as generative artificial intelligence (gen AI). The enormous productivity gains promised by the technology—and its potential to transform customer experience and the nature of work itself—mean the pressure on businesses to move fast is coming from the very top levels of organizations.

But while executive excitement (and worry) is certain, the roadmap for turning gen AI potential into strategy and then execution is far less clear. The technology is still new. There are risks and regulatory issues to navigate. Talent is scarce or unavailable. And the costs of innovating with gen AI are not yet at all clear.

And even if these hurdles can be surmounted, there’s a bigger question at play. Are businesses ready for generative AI—and AI more broadly—in terms of their digital foundation? Or, put differently: Do they have the technology infrastructure and organizational culture needed to leverage gen AI to its maximum potential?

The people tasked with navigating this messy interplay of potential and pragmatism are often today’s chief information officers (CIOs). Unsurprisingly, many are feeling incredible pressure to act. Dion Hinchcliffe, vice president and principal analyst at Constellation Research Inc., a technology consultancy in Silicon Valley, says this pressure is what makes generative AI different from every technology that has come before.

“In all our conversations with CIOs in the last year, what’s become very evident is that the board is putting a lot of pressure on them to deliver gen AI. They see it in the news; they are using it themselves. And they see that if their business doesn’t do something meaningful with it soon, a native-born AI company is going to come along with a product or service that’s much cheaper or better than theirs and replace them.”

To stave off these competitive threats and ready their organizations for the “AI-everywhere” future, businesses are planning substantial investments in generative AI and the associated digital infrastructure. International Data Corporation (IDC), a Needham, Mass.-based research firm, predicts that global spending on gen AI software and related infrastructure and IT services will grow at a compound annual rate of 73.3% between 2023 and 2027, when it will reach an estimated $143 billion.1

However, money alone won’t build the digital foundation needed to create readiness for gen AI and AI more broadly. More than a decade of digital transformation has demonstrated that challenges related to talent, culture, and operating models still stand between many businesses and the promises of transformational technology. 

This paper will explore how companies are readying themselves for the “AI-everywhere” future by creating the digital foundation needed to put technology at the center of strategy, innovation, and operations. This digital foundation encompasses both the technology infrastructure and the culture of a business—with both factors determining the speed at which organizations can move on generative AI.

1 GenAI Implementation Market Outlook: Worldwide Core IT Spending for Gen AI Forecast, 2023-2027, International Data Corporation, October 2023.