Funding Shifts in 2024: Focus on Business Value Beyond Gen AI

In 2024, the focus will be on business value, extending beyond just Gen AI to encompass all technology investments. Most companies, well into their digital transformation journey, now seek greater returns on their investments, moving beyond the initial low-hanging fruit. However, there is a fundamental shift in sentiment regarding investing more to gain more value.

Digital Density plays a significant role in this shift. Companies have either high or low digital density based on their tech investments over the past decade, particularly in cloud migration. Those with high digital density have already moved substantial parts of their tech estate to the cloud. In 2024, there is little appetite or funding available to migrate the remaining low-density estates to the cloud. This marks a shift away from focusing solely on modernizing IT infrastructure to extract value from existing investments.

Decision-makers for technology funding have also evolved, especially with the rise of Gen AI. Previously, IT-driven decisions focused on efficiency gains, but now the emphasis is on creating value for the business. This has led to a shift in funding responsibility from CEOs and CFOs to departmental budget holders who assess the business value of tech investments.

Achieving success with Gen AI requires a multidisciplinary approach, going beyond AI and data expertise. Teams must include members who understand the specific business functions being impacted, data management, and how AI integrates with other technologies to deliver desired outcomes. This poses a challenge for organizations accustomed to hiring specialized skill sets.

For third-party service providers, this shift requires a reevaluation of their approach. The traditional specialist model may not suffice in a multidisciplinary environment. Providers need to adapt their offerings to align with the evolving tech funding landscape, where clear ROI and business value are paramount.