Hybrid cloud positions leaders for swift digital transformation, new Oxford study reveals.

This post was first published on the Journey to AI Blog.

What defines those organizations leading their peers in cloud and artificial intelligence (AI) adoption — and how have their steadfast journeys contributed toward ROI and digital transformation? That was the focus of Oxford Economics and IBM’s research, which surveyed 6,000 senior IT executives world-wide from May through August 2020.

The report, entitled “Driving digital transformation – Exploring the impact of a unified data and AI strategy,” can be accessed here.

The survey called out 13.5% (809 respondents) as “Cloud and AI Unifiers” for meeting specific criteria for leading cloud and AI adoption: They must have at least doubled their AI applications in the cloud over the past two years, with 21% or more of new applications incorporating AI. The group also agrees that a unified platform for cloud, data and AI is critical to their organization’s long-term success. According to the survey results, four areas set these “outperformers” apart from the others when it comes to effectively incorporating AI into their applications:

  • Defining and communicating ethical standards for AI use (44%)
  • Increasing levels of data sharing within the organization (41%) and partners (33%)
  • Redesigning business processes for AI compatibility (44%)
  • Reskilling talent to focus on AI (39%)

Outperformers also typically respond that they have demonstrated positive business ROI from combined cloud and AI investments. Cloud has enabled or accelerated ROI in customer experience, the development of AI applications and many other areas, they say. 

A flexible, cloud-enabled AI strategy takes organizations further

Why has a unified strategy around cloud, data and AI emerged as critical to the world’s leading organizations? Transformation around new technologies is a complex job — with tasks such as process efficiency, product and service innovation or analytics-based decision making demanding more flexibility. 

The Oxford and IBM study reveals large firms especially are moving toward hybrid and multicloud environments to create a cohesive technology and data strategy that will position them favorably to speed their digital transformation. Over one-third have AI applications enabled by hybrid multicloud — up 18% from two years ago. Compare that to an overall rise of 13% among other organizations. 

Common findings among outperformers

  1. One-fifth of new applications developed incorporate AI, and more than half of organizations surveyed have already deployed AI in both back-office and customer-facing functions, including customer service (58%), IT operations (57%), business operations (57%) and process automation (56%).
  2. At least half of IT executives say investing in cloud (59%) and AI (50%) has become more important as a result of COVID-19, and nearly as many (47%) are increasing their overall spending and investments in response. 
  3. AI-enabled tools seeing the most investment include machine learning and IoT (61% each), predictive analytics (60%), and virtual assistants (51%) with cloud being the top technology used in combination with AI.

The biggest obstacle: Managing change

A common challenge that unifies all respondents, however, is managing change. Not surprisingly, AI adoption challenges differ among those further along in AI and cloud adoption from those who have yet to set sail.

The top four barriers facing outperformers are security issues (37%), compliance issues (37%), difficulty building and managing models with multiple AI providers (37%) and curating relevant data to leverage AI (35%). Less burdensome for these outperformers than the rest of those surveyed include lack of available data (15%) and lack of support from employees (10%) and executives (8%).

IBM delivers AI for business solutions that uniquely fuse together the intelligence of AI and the agility of hybrid cloud. Learn how you can scale AI to accelerate your digital transformation.

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