Following a challenging start to 2023 for the technology sector, characterized by macroeconomic weaknesses and cost-savings, company strategies centered on generative artificial intelligence (GenAI) have triggered a rebound in confidence. It is against this backdrop that injecting GenAI into digital transformation strategies has debuted in poll position on annual EY ranking, Top 10 opportunities for technology companies in 2024.
According to the EY report, the top 10 opportunities in technology for 2024 are:
- Inject GenAI into digital transformation strategies and establish a “control tower”
- Experiment with GenAI in targeted front-office and back-office use cases
- Invest in new forms of digital infrastructure in the burgeoning “edge economy”
- Establish additional supply lines in emerging markets
- Shape corporate investment strategy around the AI roadmap
- Harness platform business models to industrialize and scale advancing technologies
- Establish proactive and holistic responses to new and forthcoming tax burdens
- Prioritize energy efficiency of data center in environmental efforts
- Invest in advanced risk tools and revisit trade-offs between costs, risks, resiliency and agility
- Deploy advanced technology to reduce current and future cyber risks
The report cautions, however, that most organizations (90%) are still at a nascent stage of AI maturity,[1] and urges companies to establish an “AI control tower” to support safe and ethical AI deployments, with humans at the center.
Ken Englund, EY Americas TMT Leader, says:
“In 2023 the technology industry navigated global economic headwinds and geopolitical tensions, while building widespread expectation around the potential of AI. The opportunity for the year ahead is clear. By putting AI at the center of their strategies, technology businesses could leapfrog competitors who were previously ahead, not only by accelerating their transformation journeys but also repositioning operations to capitalize on rapidly emerging technologies and business models.”
The opportunity to experiment with GenAI in front- and back-office use cases is another new entrant to the Top 10, ranked in second position. Rather than leveraging GenAI for all use cases, the report states that companies should target high-impact, high-value use cases and transformation opportunities. Examples include using GenAI in software coding (front-office); and deploying AI to attract and retain talent (back-office).
Indeed, Joongshik Wang, EY Asean Technology, Media & Entertainment and Telecommunications Sector Leader, observes that technology firms are experimenting with GenAI in targeted front-office and back-office use cases. Specifically, many technology companies are experimenting in areas where there is already proven track record, such as customer care, IT development, marketing and sales. More advanced players are attempting more ambitious technological breakthroughs, such as enterprise order fulfilling, digital twins, supply chain, optimization of energy efficiency and self-healing networks.
Buy or build?
In this landscape, it is little surprise that shaping corporate investment strategy around the AI roadmap features in this year’s Top 10 (fifth position). AI and large language model (LLM) usage is taking off at pace, and acquisitions, deals and partnerships can speed up development by helping companies overcome challenges including demand for hardware, costly training and adopting the requisite talent to deploy.
Diversifying supply chains
In fourth place on this year’s ranking is the opportunity to establish additional supply chains in emerging markets. The risk of supply chain decoupling continues to loom, particularly for hardware-oriented businesses, and a race is underway in subsectors such as semiconductors to realign supply chains in a way that mitigates geopolitical disruption. The report highlights an emerging trend toward creating operations in emerging markets, including India and Southeast Asia, helping expand operations away from regions exposed to trade conflicts.
AI demands energy action
Prioritizing energy efficiency of data centers also ranks in this year’s Top 10 – at eighth position. Data centers’ energy usage is imminently set to accelerate rapidly, triggered by the huge computing power required to train LLMs or run intelligent systems. Indeed, the report highlights that by 2027, AI could consume as much electricity as a country the size of the Netherlands. The report suggests that businesses respond by collaborating with energy equipment providers to develop innovative ways to power data centers – helping reduce costs in both the short- and long-term.
