Lori MacVittie, Distinguished Engineer at F5, explores how generative AI will drive digital maturity.
These days, it seems like generative AI is everywhere online and offline. Whether you are surfing the web, chatting to colleagues in the breakroom or engaging in small talk in the board room, generative AI will surely come up.
With this context, it’s unsurprising that a report published by KPMG in March 2023 found that 65% of US executives believe that “generative AI will have a high or extremely high impact on their organisation in the next three to five years.” However, fewer than 50% of respondents claim to have the right technology, governance and talent to implement the tech successfully.
This result can come as a surprise for those who read AI-generated content on a daily basis. But it is definitely not for those of us who have been closely following the corporate digital transformation journey and have been mapping it against six technical capabilities required to successfully navigate that journey, including data and apps delivery and IT infrastructure a (IT infrastructure, data, apps and app delivery, observability and automation, Site Reliability Engineering practices and security).
In our recent Digital Enterprise Maturity Index Report, we did a deep dive into the current state of digital enterprise maturity based on those six technical capabilities and found only 4% of the organisations operating at the highest level of maturity. That is, they are close to fully operating as a digital business.
Most organisations (65%) are dabbling in digital business. They show signs of maturity, harvesting the rewards of the hard work of modernising IT and its technology domains. Notably, this is nearly the same percentage KPMG found lamenting a lack of the right technology, talent, and governance to implement generative AI successfully.
That’s not a coincidence. The sheer breadth and depth of technical capabilities required to establish and operate an AI-enabled business can be overwhelming. From new technical domains in the enterprise architecture – SRE operations, observability and automation, app delivery, and security – to modernising existing domains such as data and infrastructure, a significant amount of work is needed, especially for enterprises that predate the Internet.
That’s why it’s no surprise that when we look at the maturity of organisations through the lens of industries, we find that no financial services organisation is operating at the highest level of maturity. Cloud providers, telecom, and technology firms dominate that category.
With the exception of telecom, cloud providers and technology firms are relatively adolescent industries with very little technical and architectural debt than their more-traditional counterparts. That makes it a lot easier for them to push forward faster.
The lack of financial services companies in the highest category of digital maturity — the doers — might seem odd given the rapid rise of digital banking. Upon deeper analysis, one can assume that FinServ is moving at a slower rate by design. Adding a new interface (apps and digital services) is much like putting a shiny façade on an old building — it gives the appearance of modernisation but behind the scenes is a great deal of traditional technology and practices.
That’s not a condemnation. After all, there are costly risks to missteps, and they have a considerable burden with existing infrastructure and app portfolios requiring modernisation.
This also explains the lack of healthcare companies in the top category. If a weighty portfolio and strict governance burden the financial services industry, imagine the burden on healthcare organisations. They are one of the most highly regulated and tightly governed industries, and rightly so, since missteps impact human lives. Digital transformation is not a race; thus, it is encouraging to see some industries progressing with a measured, strategic approach. The tortoise did beat the hare, after all.
That’s not to say there aren’t examples of healthcare and financial services organisations that are progressing faster than others. The data set we analysed was drawn from responses to our State of App Strategy survey, based on the completeness of answers.
Companies we’ve spoken to in both industries have demonstrated that there are exceptions to every statistic.
The healthcare sector, for example, needs more critical care nurses to cover the number of available hospital beds. This shortage of resources is an existential threat, but entirely outside of the control of the industry because there just are not enough nurses to go around.
To meet this challenge, some healthcare providers — especially those managing a large number of hospitals — are increasingly looking at how AI can increase the number of beds each nurse can cover without compromising the quality of care. Some providers are looking to Large Language Model AI to make nurses more effective by reducing the time needed to maintain patient health records. Others intend to use AI visual modelling to monitor hundreds of high-definition video streams for possible changes in patient conditions.
Financial services companies can sometimes lag in their adoption of certain technologies because they’re generally highly regulated. But bankers and brokers know that the greater the risk, the greater the reward. Using applied technology to obtain a first-movers advantage over competitors is central to the financial services industry embracing blockchain despite significant difficulties with reliable deployment, considerable risk, and regulatory scrutiny.
The industry has forecast certain advantages from the technology and is bankrolling some of the most sophisticated studies in areas such as Quantum Key Distribution, which can significantly increase the efficacy of security around transaction processing for monetary transfers or trading.
The 2022 SOAS found that IT/OT was the most exciting technology trend, and it remained in the top five in 2023, demonstrating that manufacturers are at the forefront of modernisation.
Manufacturers have always been on the vanguard of adopting any technology that leads to greater efficiencies and digitisation is no exception. The annual Oil and Gas Automation Conference for the past three years has shown that natural resources sector is far ahead of most enterprises in their use of automation, collection telemetry, and the adoption of zero trust approaches to securing remote assets.
Embark now or risk falling behind
There is no denying benefits of the digital transformation journey, which organisations of all sizes and at different growth stages profit from. Businesses with a certain level of maturity and experiences tend to gain great benefits from the competitive advantage, new opportunities and business operational efficiency digital transformation can bring.
Like with any other game-changing technology, if organisations don’t manage to integrate it into their everyday life, they risk being left behind their peers. An organisation’s digital maturity will determine whether or not it will be able to make the most of the latest tech innovation.