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Foundry’s State of the CIO Study reveals AI/ML as top priority for 49% of CIOs in 2024

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cios in 2024

In the dynamic digital business landscape, IT leaders aren’t just laying the groundwork for innovation – they’re shaping the very future of how organizations operate. As the world pivots towards artificial intelligence (AI) and machine learning (ML), these tech visionaries are at the helm, orchestrating strategies and steering organizations towards unprecedented heights of success. The latest insights from Foundry’s 23rd annual State of the CIO research reveal how Chief Information Officers (CIOs) are rising to new prominence, fueled by the relentless pursuit of AI-driven excellence.

Enhanced collaboration between IT and line of business functions is bolstering core strategies and positioning IT leaders as trusted advisors for technology investments and digital business roadmaps. Despite their pivotal role in shaping future strategies, CIOs are concurrently focused on optimizing, modernizing, and securing existing technology infrastructure.

According to the research, 49% of CIOs identified ML and AI as the most strategically important technology initiatives for the upcoming year. Additionally, cybersecurity enhancements have regained prominence, with 49% of IT leaders citing it as a top priority.

CIOs to strive towards a business strategist role

In the next 3 years, nearly half (49%) of IT leader respondents foresee assuming a more strategic role, with 36% expecting a significant focus on transformational responsibilities particularly in areas such as redesigning business processes (33%), driving business innovation (34%), modernizing infrastructure and applications (28%), and developing and refining business strategy (27%). Security management will continue to be a significant focus for 30% of respondents.

CIO focus for the next 3 years

The survey also highlights the evolving nature of the CIO role towards a digital and innovation-focused direction. 88% of respondents cite this shift, indicating a slight increase from the previous year’s figure of 85%. This aligns with the broader digital transformation agenda embraced by organizations.

As CIOs’ influence grows, so do their connections with other corporate influencers. 79% of respondents note strong educational partnerships between CIOs, CEOs, and board members, a trend particularly noticed in retail (91%) and high-tech companies (85%).

Additionally, 83% acknowledge CIOs’ increasing reliance on trusted advisors to navigate new technologies, processes, and methodologies.

In terms of executive hierarchy, CIOs continue to maintain a direct reporting line to the CEO, as cited by 48% of respondents, reaffirming their position as key strategic leaders within organizations.

Key priorities cited by CIOs in 2024 include:

  • 44% are prioritizing initiatives aimed at increasing operational efficiencies.
  • 43% are focusing on projects to transform existing business processes through automation and integration.
  • Security/risk management technology is expected to lead IT investment initiatives this year, according to 45% of IT leaders.
  • Business process automation, IT automation offerings, and machine learning/AI technologies are also key areas of focus, cited by 44% of CIO respondents. Other targets include data/business analytics (38%), application modernization (27%), and infrastructure modernization (23%).
  • Improving customer experience remains a significant focus, with 32% of IT leaders citing it as a top business priority.
  • Technologies such as chatbots and mobile apps are expected to drive IT spending, as indicated by 22% of respondents.
  • Technology is being utilized to analyze customer needs and behaviors (44%) and enhance the security of customer data (40%), alongside leveraging AI/ML and automation to streamline customer service and support.

80% of IT leaders to increase AI/ML involvement in 2024

CIOs are at the forefront of steering their organizations’ journey into the realm of artificial intelligence. A significant majority, 71%, are deeply involved in formulating AI applications, while an even higher percentage, 80%, are actively researching and evaluating potential AI integrations into their technology stack.

IT leaders anticipate a surge in their involvement in AI and machine learning (ML) endeavors, with 80% expecting increased engagement compared to 55% from the previous year. The transformative impact of AI is palpable, with over half of IT leaders acknowledging its significant reshaping of data center operations.

CIO priorities for 2024

In response to the evolving landscape, CIOs are reevaluating their priorities. They plan to escalate their participation in cybersecurity, data privacy, compliance, and data analysis efforts. Healthcare IT leaders are showing deeper involvement in data analytics projects, while their counterparts in manufacturing are gearing up for increased engagement in Environmental, Social, and Governance (ESG) initiatives compared to peers in other industries.

At the same time, CIOs foresee a reduction in their involvement in certain areas over the next year, including physical security, cloud migration, and supply chain management. This realignment reflects their strategic response to emerging trends and evolving organizational needs.

AI and security to drive IT investments in 2024

Despite economic fluctuations, IT budgets have remained mostly stable, with 54% of CIOs expecting increases this year and 35% anticipating no change. Reasons for budget growth include the need for security enhancements (38%) and investment in emerging technologies like AI (34%). Conversely, tightening budgets are influenced by factors such as company performance (67%) and economic uncertainty (64%). Looking ahead, IT expects to control 48.7% of the total technology budget.

CIO budgets in 2024

CIOs are expected to maintain a significant role in guiding the technology procurement process. According to the survey, 63% of IT leader respondents are intending to collaborate with their business counterparts to identify business needs, while 52% aim to assess products and services, and 48% seek to define technical requirements.

Skills shortage to pose a major challenge to CIOs’ digital transformation initiatives

CIO hurdles in 2024

CIOs face hurdles in maintaining the balance between optimization and innovation. The primary challenge, cited by 39% of IT leaders, is staffing and skills shortages, with education and government sectors experiencing even higher levels of difficulty. Changing business conditions and addressing security threats are also significant concerns for 43% of respondents. Budgetary constraints and the need to demonstrate ROI present formidable obstacles for 41% of IT leaders.

In response, organizations are prioritizing talent acquisition efforts, particularly in cybersecurity, with 42% of IT leaders intending to increase hiring. However, attracting talent in AI/ML and other critical areas remains challenging, with 27% anticipating difficulties in finding professionals with the required skills. These talent shortages pose significant barriers to organizational innovation and optimization efforts, necessitating strategic attention and resource allocation.

Conclusion: Despite grappling with challenges such as staffing shortages and changing business conditions, CIOs are at the forefront of strategic decision-making, forging closer ties with core business partners and leading the charge in navigating the evolving landscape of digital business. As they continue to prioritize modernization and optimization efforts, CIOs are cementing their roles not only as technology leaders but as overall strategic visionaries.

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Read next: Enterprises across industries explore AI and ML application areas to drive efficiencies and enhance capabilities, says GlobalData

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