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Reinvent through generative AI, seamlessly run IT operations
Technology leaders may feel caught between a rock and a hard place. In our latest PwC Pulse Survey, CEOs see a wave of disruption ahead: 82% say their average competitor will not be in business in 10 years unless they change their current business model. Chief information officers (CIO) echo this, with 83% predicting that same fate for competitors. It’s no surprise that tech is driving this disruption, especially generative AI (GenAI). To tackle their own reinvention, 79% of CIOs (and 73% of all executives) say they will use the technology to help change their company’s business model.
At the same time, CIOs must also modernize and safeguard the tech foundations that drive operations. The majority of both CIOs (78%) and business executives (79%) deem more frequent and/or broader cyber attacks a serious or moderate risk — making it the risk most often cited by business executives. Most tech leaders don’t feel that their companies are fully ready for reinvention from a technology standpoint. CIOs and chief technology officers (CTO) should take a leading role in changing that by collaborating with the rest of the C-suite to develop strategies for new business models, workforce transformation and more.
Not quite fully prepared for reinvention
36%
of CIOs and CTOs say their company’s technology is completely prepared to support a new business model
CIOs and CTOs are a lot less confident — or perhaps more clear-eyed — than they were last year. Compared to our August 2023 survey, they are now far less likely to say that they, their functions and their companies are fully prepared, from a technology standpoint, for reinvention. The drops are considerable: 20 percentage points for IT function readiness, 14 points for their companies’ readiness and six points for their personal readiness.
What’s worrying tech leaders? Cyber threats are rising, the tech talent gap persists and, as technological advances accelerate, it’s becoming clearer just how substantial the disruption will likely be. The impact has already been bigger than many executives anticipated less than a year ago. GenAI, for example, already challenges business models based on outsourcing software development and back-office processes. With new tools and training, end users can often perform the work themselves. But to better harness the benefits of GenAI and other emerging technologies, many businesses will need to modernize platforms.
Forty-two percent of CIOs and CTOs say there’s strong consensus in their company’s C-suite for how to change or adapt their business models. Another 42% say there’s some consensus. That’s a good sign that reinvention will, in fact, take place. It’s also another reason why tech leaders need a seat at the strategy table — since technology will be at the heart of new business models.
What you can do
Modernize platforms to support reinvention. Focus on incremental delivery and wins, rather than a big bang approach. Prioritize platforms that increase agility and reduce costs by treating data, applications and infrastructure as a broad ecosystem.
Help the business set priorities. CIOs and CTOs should advise the rest of the C-suite on how to use tech for reinvention. GenAI, for example, can impact different areas of the business at different rates. Start with an AI impact assessment to provide information on where to start.
Build trusted relationships with your vendors. To close capabilities gaps, consider technology providers that can complement your existing skills and technology tools — and help you enhance both.
Get more on this topic
- Executives are increasingly optimistic about the business environment and their companies’ ability to mitigate risk. Find out more.
- What are the top strategic priorities for sector executives?
- What else is important to CIOs right now?
What reinvention requires: Top CIO priorities
88%
of CIOs and CTOs say that increasing GenAI use in IT is a priority
GenAI is creating a lot of pressure for tech leaders. CEOs often want to see immediate productivity gains, but don’t get distracted by short-term demands. You should start laying the foundations for longer-term AI-driven transformation. Don’t be timid. You may be haunted by the recent past, where prior tech investments did not deliver the expected value.
One way to address these pressures is to start with your own function, where GenAI can often deliver attractive, measurable value quickly. In software development, for example, GenAI is already growing productivity by 20% to 50% while improving quality. It’s automating and augmenting user stories, acceptance criteria, test cases, test scripts, documentation and more.
Since GenAI is so scalable, once you’ve achieved value with it in your own function, you’ll be better equipped to help the business and other functions do the same. With GenAI delivering value at scale, you’ll then be able to address other priorities, such as developing innovative strategies, being a more strategic business partner to the CEO and expanding your function’s influence.
What you can do
Deliver AI proof points. GenAI capabilities offered by cloud providers and enterprise apps can often quickly grow productivity in software development and other IT functions — offering significant and measurable near-term ROI.
Prepare to scale. With a modern data architecture and an AI factory, you can scale up successful use cases quickly to support new business models.
Team with the CEO on tech. Seventy-four percent of CEOs rate their CIO as highly effective. Build on that trust to help the CEO create or adjust strategies to benefit from how AI is transforming workforces, operating models, business models and so on.
The skills tech leaders need now
Only 58%
of CIOs say building data and AI skills is very important in the near term
Reinvention requires new skills — some to deliver the next-generation business capabilities built on AI and cloud, others to build and manage the new architecture that will support them. Reinvention also requires resources. More than half of CIOs (53%, and 55% of all executives) say that they lag the competition in adopting new technologies, and 88% of CIOs (and 86% of all executives) are worried about the adoption costs of new technology. Communication skills can help technology leaders tell their stories more effectively, to garner the resources, support and influence they need.
Tech leaders have other jobs too. Besides the transformative work with technologies such as GenAI, they need to keep core infrastructure and operational platforms up and running. If those fail, the business could be brought to a grinding halt. That’s likely why tech leaders are also prioritizing skills related to infrastructure management, cloud migration, cybersecurity and business applications in the next 12 months.
What you can do
Cross-skill. As new technologies change the skill mix you need, consider cross-skilling existing employees. As GenAI grows the capacity of software and other teams, for example, you may be able to reallocate tech talent.
Develop agentic workflows. AI agents can enhance workflow automation in areas ranging from customer service to financial reporting. You can also use AI agents to help manage complex legacy architectures during the journey to the future state. But tech and business teams will need to collaborate to develop these new operating models.
Cultivate creativity. Whether it’s for AI, cloud or data, people will need a culture of creativity — reinventing their own roles to work hand-in-hand with AI agents, finding new ways to solve problems with AI and data and focusing on continuous improvement.
Get access to the complete survey response data and future insights
View the main Pulse Survey
Finding opportunity in reinvention
About the survey
Our latest PwC Pulse Survey, fielded May 15 to May 22, 2024, surveyed 673 executives and board members from Fortune 1000 and private companies about the current business environment, the risks executives are facing and their company’s strategic plans and priorities. Of the respondent pool, 81 were CIOs, CTOs and technology leaders.
Past surveys
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