Investment changes in GenAI and other technologies in 2024

This article describes investment changes in GenAI and other technologies in 2024.

digital density

One of the disruptive changes is the introduction of the concept of digital density, which can divide the technology industry of large enterprises into high and low digital density industries. High digital density enterprises are companies that have moved the majority of their operations to the cloud over the past decade.

By 2024, some companies have already begun moving low-digital-density real estate to the cloud, while others may need more capital to make this move. Although there is still a lot of real estate that has not yet been digitized, with the current lack of funds, this process is likely to be affected and continue to be for some time.

Companies are currently not interested in making large-scale investments in underinvested areas, preferring to invest in technology to obtain greater value. However, they are less interested in funding the migration of workloads to the cloud.

This is an important change in sentiment, rather than simply a push to modernize IT so that companies can make the most of their existing investments.

Funding Decision Makers

GenAI brings about a shift in sentiment around the executives who make technology investment decisions and are the ones who determine the potential value of those investments.

Historically, the main goal of investment has been to improve efficiency. Moving business to the cloud can effectively reduce resistance within the technology stack. These decisions are often supported by the IT infrastructure and are led by the CEO and CFO, who will make funding requests to the board of directors to modernize IT and migrate to the cloud.

GenAI allows enterprises to operate in a unique way, not emphasizing efficiency, but focusing on whether technology can bring value to the enterprise.

As a result, responsibility for GenAI funding decisions increasingly rests with departmental budget holders responsible for business activities, who are the executives who need information about the technology before making any decisions moving forward. Business leaders responsible for specific business activities need to have a clear vision on how to effectively utilize GenAI technology.

Think about the cloud problem, the burning question for IT investment over the past decade, which is largely a technology problem: how to get applications into the cloud.

But GenAI is primarily a business problem, how can we use it? How can we make this tool provide business value?

Multidisciplinary approach

The success of GenAI requires It’s not just AI experts or data experts and their specific expertise, it’s becoming increasingly clear that realizing the full value of GenAI — or even getting any value at all — requires multidisciplinary teams.

It’s not just about having the tools available, having the necessary information, and it’s not just about the individual knowing how to use the tools. Where used it must work in conjunction with other technologies to produce the desired business results.

This is a challenging problem for most businesses, most of which employ specific skill sets and often do not approach the problem through multidisciplinary teams.

For example, if a business is applying GenAI tools to the financial accounting function, the people on the team need to understand finance and accounting. They must also understand how this works uniquely within the business. They must understand how Using data, they also need to understand AI and how it works with other technologies so they can implement it successfully.

The GenAI implementation journey is a multidisciplinary one that requires more than just a specific, highly focused combination of expertise.

This is also a problem for third-party service providers or technical services organizations, internal IT, external consulting, system integrators, etc., where the expert model currently used breaks down or is often difficult to implement in the multi-disciplinary journey.

If third-party technology service providers want to participate in the revenue wave surrounding GenAI, they must rethink how to enter the market.

Vendors and enterprises recognize that more investments are needed, but they want a clear view on those investments, which shows that CIOs, CTOs and enterprises are changing their vision of where and how they will be in 2024 Think about making technology financing decisions.