While many sectors of the economy remain fearful of a recession and are cautiously approaching the rest of 2024, technology leaders aren’t playing it safe – in fact, playing it safe has never been more risky.

To emphasize the point, Matthew Guarini, VP, senior research director, at Forrester Research points to a Bankrate survey that cites nearly 60 percent of economists surveyed in 2023 anticipate a recession in 2024, leading many sectors to tighten their belts. However, Guarini points out that the tech industry continues to outpace GDP growth.

Businesses aren’t enamored with technology for technology’s sake. It’s a little more pragmatic than that. “They believe it’s going to deliver value,” Guarini told SDxCentral. He added that businesses have invested, but “now they are looking for value.”

Business leaders are looking at IT as an engine of growth. “We’re passed the point where IT can view the business as that entity over there.”

Guarini said business growth falls into three vectors. The first – and most basic – level enables growth by effectively scaling and securing customer solutions to enable growth. “It’s not easy to do and it’s highly valuable,” he said.

The second is to create growth by collaborating and developing digital products to create new opportunities. The third vector is to amplify that growth by elevating insights, automation and artificial intelligence (AI) to optimize everything.

Guarini said CIOs and other executives must see AI as a tool for more than cost-cutting and operational efficiency, but rather for growth and innovation that offers a competitive advantage.

While AI can improve efficiency, businesses need it to do more. In developing a strategy for deploying AI and generative AI (genAI), Guarini used an example of how two law firms might approach it.

“Ask one lawyer how the firm will use AI and he says to add efficiency, to get rid of paralegals. Ask the second lawyer. The answer is to sue more people,” Guarini said.

“It’s efficiency vs. effectiveness. The second lawyer is using it for top-line growth vs. bottom-line revenue.”

In 2024, 60 percent of businesses will use genAI, according to Forrester. “This isn’t what you would say about metaverse and things like that, which is more of a technology push.”

“Employees use it [genAI] because it makes their jobs easier and lets them do their jobs better,” Guarini said, comparing genAI to mobile phones – and the iPhone in particular -- and the bring-your-own-device (BYOD) trend.

“It wasn’t just the iPhone, it was the App Store. You no longer had phone in your pocket you had a computer,” Guarini said. “AI has been around for years. But just as mobile phones existed before iPhones, Apple’s phone changed the perception just as ChatGPT changed the perception of AI.”

Guarini told SDxCentral that we are now entering the BYODAI era. “Firms need to have policies and procedures in place” to address security and compliance concerns that come workers bring AI to the enterprise.

While 60 percent of workers using genAI tools internally is impressive, more eye-catching is the fact that 50 percent will use AI to offer custom-facing tools, according to Forrester’s research. Guarani said Forrester is an example of this shift to custom-facing AI. While it started as an internal tool, Forrester now enables its clients to use genAI to search its entire library of research.

While businesses are deploying AI, Forrester predicts that only 10 percent of companies will get growth right. One of the challenges is many IT leaders still need to get a seat at the table, Guarini said. “Some have a seat, but they aren’t seen as confidants or are they are just to answer to questions.” AI is also complicated because you aren’t buying AI, you’re buying AI-enabled solutions from multiple vendors, creating technical debt.

While AI promises to boost productivity and problem-solving, it also necessitates a shift in talent acquisition strategies. With the rapid turnover of tech skills and emerging AI expertise in high demand, tech leaders are increasingly turning to skills-based practices to bridge talent gaps.

Replacing those skills is a challenge traditional HR teams haven’t met. Enter what Guarini calls, “shadow HR,” which is likened to shadow IT. “When IT couldn’t meet business needs, the business side brought in its own cloud solutions, for example.” Now it’s the IT teams that are getting creative.

Forrest expects 20% of companies to create their own talent acquisition pipelines to compete for scarce talent. “IT skills have a shelf life of five years, so you’re losing skills every year,” Guarini told SDxCentral, leaving 76% of tech leaders with skills gaps in their organizations. Forrester reports that firms like Google’s parent company Alphabet, Dell and Oracle have ditched degree requirements for technology roles and adopted skills-based hiring practices.

Forrester also says that technology leaders will seek partners to close the AI gap, predicting that 50% of enterprises fail to master it internally. Acquiring skills needed to drive growth and new AI-infused applications, in particular, will motivate tech leaders to lean on service providers such as Accenture, Tata Consultancy Services and Wipro, all of whom are investing the skills enterprises need.

To recap, Forrester predicting that executives will focus on these areas to drive business growth through technology:

• Increasing AI investment to seize a competitive edge.
• Expanding beyond operations to grow through customer-facing systems, product development and data-driven insights.
• Boosting productivity across IT operations thanks to AI, freeing up valuable time for innovation.
• Implementing shadow HR to create their own talent acquisition pipelines to compete for scarce talent.
• Seeking external help to bridge the AI skills gap
• Reshaping global tech operations to rebalance operations due to factors like export controls and data privacy regulations.