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Image: Яна Деменишина/Adobe Stock

AI will deliver efficiency and effectiveness in the enterprise next year, with initiatives expected to boost productivity and creative problem-solving by 50% across IT operations, according to Forrester in its new report, Predictions 2024: Tech Leadership. The report also details predictions about tech investments, “shadow HR” and the impact of geopolitics on manufacturing and automation.

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Benefits and budgeting of AI projects

Current AI projects are seeing up to 40% improvement in software development tasks, according to the report. “Visionary tech execs will seize this as an opportunity to strategically realign IT resources to unlock the immense creative potential within their teams — not just among developers but across all IT roles,” the report said. “They will leverage this AI moment to create an environment that promotes innovation, interdisciplinary teamwork, continuous learning and alignment with the broader business strategy.”

SEE: 31% of Organizations Using Generative AI Ask It To Write Code (TechRepublic)

AI deployments require budget spending, and even though a recession is predicted in 2024 and many businesses will play it safe, “tech spend has grown faster than GDP each year so far this century,” the report noted.

Other improvements from AI will include freeing “up to 50% more time for employees to engage in creative problem-solving, driving customer-centric innovation and creating unprecedented business value” from this shift, the report maintained. “Businesses will benefit as their tech teams provide products and services that deliver better, more innovative customer experiences.”

But despite the allure of generative AI, the report advises that “the winning strategy will be to home in on the compelling advantages that this technology can deliver for advancing your operations and successfully driving long-term growth.”

Tech execs will turn to “shadow HR” for talent acquisition

Another one of Forrester’s predictions is that 20% of tech executives, out of frustration, will establish their own talent capabilities in-house, or “shadow HR,” to keep their staff up to date in skills such as AI, given that talent is expensive and hard to find.

“A source of untapped talent sits right inside organizations already, and tech leaders are increasingly working with their HR counterparts to increase internal mobility into the technology organization,” Matthew Guarini, vice president and senior research director at Forrester, explained to TechRepublic. “Highly transferable skills such as stakeholder management, communication, critical thinking and customer experience are already available within the broader organization, and paired with upskilling and reskilling programs, can create a powerful new pipeline of talent into the technology organization.”

SEE: Study: Reskilling Is Inevitable As AI Changes How We Work (TechRepublic)

In the past five years, one-third of the required skills for tech roles have turned over, and this has left 76% of tech leaders with skills gaps in their organizations, according to the report. It noted that tech companies including Alphabet, Dell and Oracle “have ditched degree requirements for technology roles, preferring to screen candidates based on skills. Not every company will have the capability or HR capacity for this shift.”

Utilizing external partners is another measure tech execs will take to close the AI gap, the report said. “Acquiring skills for prompt engineering, scenario prioritization, partner development and new AI-infused applications will drive tech execs straight to their service providers,” the report said, adding that vendors including Accenture, Tata Consultancy Services and Wipro are investing heavily in these practices.

More on how AI will impact jobs and work

The report recommends that tech leaders “up their game with transparency and AI-driven automation” wherever they operate, which will cause a shift in work. This will result in “a premium put on higher value-creating roles, some of which will be new while the majority will just adapt,” Guarini said. At the same time, AI/automation will reduce the need for more manual-intensive jobs.

“Most forecasts recognize this dynamic as it has played out in the past with automation,” he added. “The difference will be AI’s impact on more jobs than automation, and its ability to impact jobs more deeply. The opportunity for tech leaders is to identify ways to augment their talent with these tools and then reposition this enhanced capability to drive better outcomes for the business and customers.”

Global tech operations will be rebalanced amid geopolitical pressures

Forrester is also predicting that two-thirds of firms will shift their manufacturing footprints due to geopolitical pressures. The report noted that 72% of 2023 corporate filings cited geopolitics or export controls as impacting the outlook of their long-term business models.

This means that more sourcing will be done within the U.S. – if U.S.-based companies are exposed to China and Eastern Europe, Guarini said. “The main drivers for companies to think through would be current exposure to countries that have weakening trade relations with where they are domiciled, current exposure to countries with civil unrest, (and) current exposure to countries with growing economic instability,” he said.

SEE: Gen AI to Increase US Production — With Caveats (TechRepublic)

These factors all indicate the need to diversify from these exposures to mitigate any adverse impact on their business in the short/medium/long term, Guarini said.

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