Why Top Managers Doubt IT Efficacy – Unveiling Findings of an In-Depth IBM Analysis

Why Top Managers Doubt IT Efficacy – Unveiling Findings of an In-Depth IBM Analysis | Read More at ZDNet

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For years, even decades, the thrust in information technology has been toward increasing sophistication and speeding up capabilities through more flexible and adaptable architectures, advanced analytics, and lately, artificial intelligence -- making it all software-defined. However, businesses don’t seem to see the improvement – if anything, they are growing even more restless about the state of their IT capabilities.

Top business leaders’ confidence in the effectiveness of basic IT services is only about half of what it was 10 years ago, according to a study of 2,500 business and technology executives released by IBM’s Institute for Business Value. While AI should be improving things, generative AI has only made executives even more disgruntled with the state of IT.

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At least that’s the word coming from CIOs, CTOs, and CDOs. While IT leaders are preparing organizations for accelerated generative AI (gen AI) adoption, C-suite executives’ confidence in their IT team’s ability to deliver basic services is declining. A sizeable segment of technology executives in the sample, 43%, say concerns about their technology infrastructure have increased because of generative AI.

Fewer than half (47%) of business leaders surveyed think their IT organization is “effective in basic services,” down from 69% surveyed in 2013, the survey shows. Only 36% of CEOs in the survey see IT as effective, down from 64% since 2013. Chief financial officers give a bit more credit to IT, with 50% seeing its effectiveness, but this is down from 60% since 2013.

What’s at the root of this discontent? For starters, business leaders’ expectations have grown about what technology needs to deliver. Businesses increasingly lean on IT to produce a competitive advantage in a digital-focused and AI-drenched world. Plus, business leaders themselves are somewhat more technology savvy than their colleagues were a decade ago – a trend that will only increase as a generation raised almost their entire lives on the internet moves into management. They expect everything to occur at internet speed or be immediately fixable through online services.

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Tech leaders and professionals, therefore, “must be part mastermind, part maestro,” the IBM study’s authors state. “They must architect technology strategy across data, security, operations, and infrastructure, teaming with business leaders speaking their language, not tech jargon-to understand needs, imagine possibilities, identify risks, and coordinate investments.”

Surprisingly, there appears to be little communication and collaboration between business and IT leaders. Only 39% of surveyed tech CxOs say they collaborate with finance to embed tech metrics into business cases. 35% of surveyed CFOs report being engaged early in IT planning to set strategic expectations.

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The tech leader or professional of today needs to look well beyond compute resources and integration. “They must build multidisciplinary teams to bring the strategy to life, encouraging the experimentation and fresh ideas that inspire employees and delight customers,” the IBM authors state.

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“It’s an enormous responsibility and one that many tech leaders have struggled to meet. As the scope of technology has expanded over the past two decades, new roles have been added. But despite a growing team of technology leaders, technology has not consistently and effectively been integrated into strategic decision-making for the business,” the authors further detail.
Technology needs to be part of this strategic thinking. At least 43% of business leaders are worried about whether they have the right infrastructure to handle gen AI. Over the next two years, they expect to spend 50% of their budget on hybrid cloud and AI combined.

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Suggestions the report’s authors offer to improve IT delivery of services to the business include the following:

Bring more women into IT and AI. “Gen AI is creating new urgency around the lack of women in the historically male-dominated field of IT,” the report states. “In the 2024 IBM IBV annual women’s study, 67% of female executives said there aren’t enough women leading conversations about generative AI. When bias plays out as harmful or inaccurate AI model outputs, a diverse workforce becomes a safeguard for improving trust and brand equity. Tech leaders need to encourage women to become IT and AI subject-matter experts to not only increase the talent pool but to gain the critical perspectives that will shape AI transformation going forward.”
Make paying off technical debt a business imperative: “Refactor legacy systems for AI readiness. Reframe legacy infrastructure challenges as business impediments preventing rapid-gen AI adoption at scale.
Employ AI to better build AI: “Use gen AI code assistants to modernize applications for hybrid cloud and AI. Optimize your infrastructure for AI everywhere. Review the current state of your infrastructure with an eye toward AI everywhere.”
Measure, measure, measure technology’s impact on business outcomes: Notably, among high-performing tech CxO respondents defined in the survey, the study found that organizations that connect technology investments to measurable business outcomes report 12% higher revenue growth.
Talk about outcomes, not about data: “Focus on shared objectives by finding a common language with the business based on enhancing the customer experience and delivering outcomes. Use storytelling and scenario-based exercises to drive tech and the business to a shared understanding of the customer journey and pain points.”
Involve the workforce: “Let your workforce define how they use AI to help them work better and faster. Turn reskilling and upskilling into advancement opportunities. Establish AI academies or centers of excellence where employees can develop their proficiency.”

Running a successful business these days means running a successful technology enterprise as well. Much more is expected from technology than a decade ago, and these expectations will only grow.