CFOtech Asia - Technology news for CFOs & financial decision-makers
Story image
Business leaders feeling unprepared for AI transformation, report finds
Fri, 19th Jan 2024

A new report by global management consultancy, Kearney and leadership advisory firm Ergon Zehnder, reveals that 73% of business leaders feel unequipped for AI transformation. Lack of time, resources, and sufficient funds are the key reasons why leaders feel ill-prepared, according to the report.

The report, titled Leadership in the Age of AI, delves into how world business leaders anticipate the influence of AI on organisations and employment, and their level of preparedness for such changes. It uncovers that although 70% of leaders believe AI will disrupt their company within the next five years, just one in five (20%) feel their organisation is currently ready for this.

Arjun Sethi, Regional Head and Chairman, APAC at Kearney, states that "as AI continues to transform companies in the region, leaders can help their teams embrace the change and challenges that AI brings, and make sure their organisations are reaping the benefits".

Sethi clarifies that the dominant sentiment among leaders when it comes to AI is optimism; however, the difficulty now is shifting this optimism into tangible action and ensuring their organisations evolve to benefit from AI. He said, "keeping pace with AI through personal learning and continuous exploration are pivotal steps for leaders to not only embrace this transformative technology but also ensure sustained success in an ever-evolving landscape."

The report further shows that 85% of business leaders view AI as an opportunity for their organisations. More than 90% claim AI offers personal opportunities in their roles. This optimism is evidently being translated into action, as business leaders are proactively prepping for the AI-led future: 49% are investing in infrastructure, 44% are seeking external partnerships, and 39% are recruiting expert talent.

The report outlines that, although 73% of surveyed leaders believe their preparations are constrained by time, staff and money, over half (51%) attribute the issue to a lack of understanding of AI among leaders. On the other hand, of those who feel prepared for AI transformation, 89% attribute their readiness to their leadership team's understanding of AI and its capabilities.

Reflecting on the likely impending changes to organisations due to AI-enabled technologies, Burcu Bicakci, a partner at Egon Zehnder who focuses on Technology and Communications and AI for Southeast Asia, emphasized the critical role of leadership in this shift.

"The report underscores the importance of leaders comprehending the impact of AI on their business and steering their organisations accordingly. Although the pace of AI adoption has accelerated, it is never too late for leaders to devise a clear AI strategy that can guide their organisation through this transformative phase and keep them ahead of the curve," said Bicakci.

The report signals a call to action for business leaders to prepare their companies for the inevitable wave of AI disruption, indicating that, despite optimism, practical steps need to be taken to ensure businesses globally aren't left behind. This includes investing in personal learning and ongoing exploration of AI technologies.