CIOs Bet on AI’s Central Role in Digital Transformation: IDC

IDC Asia Pacific has disclosed pivotal forecasts for the technological landscape, highlighting the role of AI in reshaping digital businesses at the IDC FutureScape 2024 event held at Raffles Hotel Singapore.
Sandra Ng at IDC's FutureScape eventAccording to IDC’s projections, 80 percent of Chief Information Officers (CIOs) are poised to leverage organizational changes by 2028 to harness the power of AI, automation, and analytics, propelling the emergence of insight-driven digital enterprises.

Sandra Ng, Group Vice President and General Manager for IDC Asia Pacific Japan Research, and other IDC subject matter experts delivered insights into key predictions for 2024 and beyond. These predictions spanned core technologies such as infrastructure, cloud, and security, while also exploring the implications for industries like the public sector, manufacturing, and telecommunications.

Rapid AI Growth Presents Challenges and Opportunities

The exponential growth of AI in the digital business landscape underscores its diverse applications and the challenges in its effective implementation. IDC forecasts that by 2026, tech providers will allocate half of their Research and Development (R&D), staffing, and capital expenditures (Capex) investments to AI and automation. This surge in AI’s prominence poses a challenge for CIOs in aligning vendor selection and IT operations priorities with emerging use cases.

As AI evolves from handling specific tasks to broader applications, the importance of data-centric infrastructures, skill transformations, and trust becomes even more pronounced.

Digital-First Strategy and Spending Surge

Organizations aiming for sustained growth are urged to adopt a digital-first strategy. IDC predicts that spending on digital technology by organizations will grow at four times the rate of the economy in 2024, surpassing the previous prediction for 2023. Furthermore, by 2027, 80 percent of CEOs are expected to assert that their C-suite technology leaders’ primary function should be to invest in digital-first initiatives.

AI’s Three-Phased Evolution in Asia Pacific Japan

IDC envisions a three-phased evolution of AI adoption in the region from 2023-2028, starting with productivity enhancements in 2023, progressing to customer engagement by 2024, and introducing new business models by 2025. By 2028, IDC predicts that 10 percent of top A2000 companies will experiment with AGI systems, presenting transformative effects on society and creating significant opportunities and threats.

New World Tech Order 2.0: Transformative Predictions

Central to IDC’s predictions is the accelerated integration of AI and specialized hardware and software, establishing New World Tech Order 2.0 that redefines business strategies and operations. Key aspects of this transformation include:

Infrastructure Turbulence (CPU vs GPU): Application Development 1.0 to 2.0 – By 2027, 60 percent of enterprise developers will use GPUs and other specialty processors to enhance development for machine learning, AI video editing, 3D modeling, simulations, and digital twins.

Interwoven IT: Intelligent Core to Edge – With Gen AI as a catalyst, by 2027, 30 percent of enterprises will rely on interwoven digital infrastructures across cloud, core, and edge to support dynamic, location-agnostic workflow priorities.

Self-Discovery, Healing Software: Autonomous Workflows – By 2026, two-thirds of A2000 businesses will leverage a combination of generative AI and RAG to power domain-specific self-service knowledge discovery, improving decision-making by 50 percent.

AI-Influenced Products: Tech-Created/Enhanced Product Design and Development – By 2027, 45 percent of enterprises will have mastered the use of generative AI to co-develop digital products and services leading to double the revenue growth compared with their competitors.

Data Act: The Digital Identity Benchmark – By 2026, 25 percent of organizations will utilize AI to enhance data privacy through the use of data anonymization, encryption, anomaly detection, and privacy-preserving ML techniques like differential privacy.

As the world enters this new chapter in the digital business era, IDC’s predictions provide a playbook for technology vendors and buyers, guiding them in navigating the transformative landscape shaped by AI and emerging technologies.