News Summary:
- Reality sets in for companies in South Africa on their AI readiness, with only 18% in South Africa fully ready to capture AI’s potential.
- Organisations are investing heavily in AI, with 54% companies allocating 10-30% of their current IT budget to AI deployment, but returns are not yet meeting expectations.
- There is a relentless sense of urgency with 62% of companies saying they have a maximum of a year to get their AI strategies right or face potential negative impacts.
Cisco, has recently announced findings from the Cisco 2024 AI Readiness Index, with a key take-away that only 18% of organisations in South Africa are fully prepared to deploy and leverage AI-powered technologies.
This emphasises the challenges companies face in adopting, deploying, and fully leveraging AI, to not only benefit from AI’s computational capabilities and analytical prowess, but also to ensure that the process produces growth and additional profits for the organisation.
Given the rapid market evolution and the significant impact AI is anticipated to have on business operations, this readiness gap is especially critical to address if companies want to remain competitive and agile.
Adaption to AI Linked to AI Readiness
Smangele Nkosi, General Manager at Cisco South Africa comments that “AI is reshaping the future of business on a global scale, and South African business must adapt to keep pace with the global market”. “While AI has amplified the sophistication of threats, it also presents an unparalleled opportunity to leap forward with advanced capabilities. Businesses must address gaps in infrastructure, skills, and governance to protect their assets and fully harness AI’s transformative power,” he says.
The AI readiness Index is based on a double-blind survey of 7,984 senior business leaders from organisations with 500 or more employees across 30 markets. These leaders are responsible for AI integration and deployment within their organisations. The AI readiness index is measured across six pillars: strategy, infrastructure, data, governance, talent, and culture.
Acting with Urgency
AI has become a key mix in today’s business strategy development, with increasing urgency among companies to adopt and deploy AI technologies.
In South Africa, nearly all (99%) report an increased urgency to deploy AI in the past year, primarily driven by the CEO and leadership team. Additionally, companies are committing significant resources to AI, with over 50% indicating that between 10% to 30% of their IT budget is allocated to AI deployments.
However, despite significant AI investments in strategic areas like cybersecurity, IT infrastructure, and data analytics and management, many companies report that returns on these investments are not meeting their expectations.
Key Findings
- AI Readiness declined across all pillars, with infrastructure identified as a pain point: The largest decline was in infrastructure readiness, with gaps in compute, data center network performance, and cybersecurity, amongst other areas. Only 20% of organisations have the necessary GPUs to meet current and future AI demands and nearly half (48%) have the capabilities to protect data in AI models with end–to–end encryption, security audits, continuous monitoring, and instant threat response.
- Companies are investing, but gains fall short of expectations: Over the past year, AI has been a priority spend for organisations in South Africa, with 54% allocating 10-30% of their IT budgets to AI projects. AI investments have focused on three strategic areas: cybersecurity (55% of companies are at full/advanced deployment), IT infrastructure (50%), and data analysis (52%). The top three outcomes they aim to achieve include improving the efficiency of systems, processes, operations, and profitability; the ability to innovate and remain competitive; and create a better experience for customers and partners. However, over 45% of respondents report that the gains from their AI investments have not met expectations in augmenting, assisting, or automating current processes and operations.
- Despite increased investments, more than 45% of respondents said they have either seen no gains or the gains have fallen short of their expectations, in augmenting, assisting, or automating current processes or operation.
“Organisations must move beyond incremental improvements and adopt a holistic approach to readiness. By addressing infrastructure and talent gaps, South African businesses can create a foundation that not only supports AI integration but also ensures sustainable value creation,” adds Nkosi.
Addressing Skills and Talent Gaps
Despite unique challenges within each pillar, a common theme across the board is the lack of skilled talent. Companies highlighted this as the top challenge across infrastructure, data, and governance, underscoring the critical need for skilled professionals to drive AI initiatives.
