Technical debt is back in the spotlight. It erodes profitability, drains resources, inhibits growth, and stifles creativity. It’s an albatross CEOs carry, impeding their push to accelerate transformation with generative AI.
As a result, many CEOs find themselves mortgaging the future to survive in the present. In fact, the 2024 IBM IBV CEO study found that two-thirds of CEOs say they’re meeting short-term targets by reallocating resources from longer-term initiatives.
There is a better way. CEOs can have their cake and eat it too. But how?
It starts by changing how we think about IT spending. Rather than viewing IT as a cost center—an expense businesses must eat to keep the lights on—we need to rethink how technology can better boost ROI. That means automating more than simple tasks that offer quick productivity boosts. Instead, leaders must assess entire IT workflows, looking for ways to improve processes with a combination of automation and augmentation.
It’s a big mindset shift. Today, a typical organization spends just 23% of its tech budget to drive revenue, according to recent IBM IBV research. But generative AI changes the equation. Three-fourths of IT executives say the value created from gen AI will be reallocated to new investments that drive business innovation and growth.
This is why CEOs shouldn’t view tech upgrades as a series of isolated IT costs. They need to connect IT automation to business strategies that will drive improved performance. And then invest accordingly. By deliberately upgrading their IT estate with business priorities in mind—applying what we call hybridby-design principles to IT programs—IBM analysis suggests that organizations can increase ROI three-fold over five years.
The IBM Institute for Business Value has identified three things every leader needs to know:
And three things every leader needs to do right now:
Technical debt is back in the spotlight. It erodes profitability, drains resources, inhibits growth, and stifles creativity. It’s an albatross CEOs carry, impeding their push to accelerate transformation with generative AI.
As a result, many CEOs find themselves mortgaging the future to survive in the present. In fact, the 2024 IBM IBV CEO study found that two-thirds of CEOs say they’re meeting short-term targets by reallocating resources from longer-term initiatives.
There is a better way. CEOs can have their cake and eat it too. But how?
It starts by changing how we think about IT spending. Rather than viewing IT as a cost center—an expense businesses must eat to keep the lights on—we need to rethink how technology can better boost ROI. That means automating more than simple tasks that offer quick productivity boosts. Instead, leaders must assess entire IT workflows, looking for ways to improve processes with a combination of automation and augmentation.
It’s a big mindset shift. Today, a typical organization spends just 23% of its tech budget to drive revenue, according to recent IBM IBV research. But generative AI changes the equation. Three-fourths of IT executives say the value created from gen AI will be reallocated to new investments that drive business innovation and growth.
This is why CEOs shouldn’t view tech upgrades as a series of isolated IT costs. They need to connect IT automation to business strategies that will drive improved performance. And then invest accordingly. By deliberately upgrading their IT estate with business priorities in mind—applying what we call hybridby-design principles to IT programs—IBM analysis suggests that organizations can increase ROI three-fold over five years.
The IBM Institute for Business Value has identified three things every leader needs to know:
And three things every leader needs to do right now:
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