Generative AI's leap and how 2024 will see a focus on security & ROI

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 USD$143 billion in 2027, up almost tenfold from USD$16 billion in 2023, with the world's largest companies expected to allocate over 40% of their core IT spend to AI-related initiatives.

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. 

Security concerns remain paramount – it's time to get back to basics

As the past 18 months have shown, the number and ferocity of cyber-attacks on some of Australia and New Zealand's largest organisations is increasing – and this will continue in 2024. Enterprises need to get back to security basics, which involves modernising legacy infrastructure, simplifying complex IT environments and securing high-quality data. Ongoing geopolitical turmoil continues to threaten local supply chains, and the use of malicious AI by bad actors to exploit any weakness will intensify. Securing critical data will become a regulatory imperative as Australia deploys its new Cyber Security Strategy and New Zealand expands the National Cyber Security Centre's role.

The digital workplace is here to stay

While there has been much talk about the return to office-based work, the reality is that the remote digital workplace in some form is here to stay. In 2024, there will be even more focus on how digital workplace technologies can improve employee and customer experiences. In both Australia and New Zealand, the focus will be aligned to how organisations can use digital workplace technology, such as generative AI, to help address national productivity issues while enabling the retention of top talent. Organisations recognise that employee experience is directly tied to customer experience. When employees have flexible, reliable and robust workplace tools, they feel empowered and can increase their productivity and ultimately deliver a much greater experience to an organisation's customers.

New ISSB standards will bring ESG compliance to the fore

Many organisations are already voluntarily reporting their ESG compliance. From July 1, this will become mandatory in Australia, so enterprises will invest in becoming more data driven to transparently manage their progress and make more informed sustainability decisions. At the same time, many organisations will up their game in efforts to reduce their carbon footprint, not only with regard to scope 1 and 2 emissions, which include direct emissions and purchased energy but also scope 3 emissions — produced throughout the value chain and subsequently more difficult to measure and control. By employing technologies such as AI and automation, IoT sensors and blockchain, technology partners can help businesses gain valuable information about emissions throughout their supply chains.

Organisations will seek to maximise technology ROI

Australian and New Zealand organisations have widely adopted cloud technology to become more efficient and help secure IT operations. This is likely to continue during 2024.

However, there is now a desire to reign in cloud spending because of current global economic pressures. Organisations are weighing up the strengths and weaknesses of cloud technology and the role it will play in navigating AI alongside regulatory changes and sustainability goals, so the 2024 focus will be on how to maximise ROI from this technology.

So, while it was once expected that the cloud would replace the mainframe, this year, the mainframe will remain crucial to delivering the ROI organisations expect from enterprise technology, especially when operating in complex environments.

Consequently, in 2024 more enterprises will adjust their cloud-first strategies in pursuit of a hybrid strategy to achieve the right workload on the right platform for their business operations. A recent Kyndryl survey found that while about 95% of organisations are moving around 37% of their workloads to the cloud, the remainder are staying in the mainframe and being modernised and integrated into a hybrid environment. In addition, people with the best mainframe skills will be critical to the success of modernisation initiatives and, therefore, very sought-after in the industry.

Governance will underpin the enterprise

In addition to cyber-security, ESG and privacy act reforms, organisations will have a firm focus on delivering strong data governance. As generative AI permeates every facet of our lives, organisations will increasingly seek to build much stronger governance around their data to meet new levels of regulatory compliance and help them manage the impact of generative AI.