Australian firms lagging in AI readiness, says Cisco report

The AI Readiness Index released by Cisco indicates a decline in Australian organisations prepared to fully leverage AI technologies.

The data shows that only 4% of businesses are fully prepared to adopt and optimise AI capabilities, a drop from 5% the previous year. This represents a significant challenge as AI continues to evolve at a rapid pace and its impact on operations is expected to be substantial.

The findings are based on a double-blind survey involving 3,660 senior leaders responsible for AI integration in companies with over 500 employees across 14 markets in the Asia-Pacific, Japan, and Greater China (APJC) region. The assessment focused on six critical pillars: strategy, infrastructure, data, governance, talent, and culture.

AI has become a crucial element of business strategy, and the urgency for its deployment has increased, with 92% of Australian organisations acknowledging a heightened need to implement AI technologies over the past year. This drive is led primarily by the CEO and top management teams.

Despite this urgency and the fact that 38% of organisations are allocating between 10% and 30% of their IT budgets towards AI, many companies are not seeing the expected returns. "As companies accelerate their AI journeys, it's critical they adopt a comprehensive approach to implementation and connect the dots to link AI ambition with readiness," said Dave West, President Asia-Pacific, Japan, and Greater China, Cisco. "This year's AI Readiness Index reveals that to fully leverage the potential of AI, companies need a modern digital infrastructure capable of meeting evolving power needs and network latency requirements from growing AI. This must be supported with the right visibility to achieve their business objectives."

Infrastructure emerged as a notable area of concern, witnessing the most significant decline in readiness. Only 13% of companies possessed the necessary graphics processing units (GPUs) to handle future AI demands, while 17% were capable of securing data in AI models with comprehensive security measures.

Investments in AI have targeted strategic sectors including cybersecurity, IT infrastructure, and data analytics, with aims such as operational efficiency, competitive innovation, and improved customer experience. However, half of the respondents acknowledged that results have fallen short of expectations.

Pressure from leadership concerning AI implementation is intense, with 42% of AI initiatives being directed by CEOs and senior management, and 21% of companies planning to allocate over 40% of their IT budgets to AI investments within five years. This is a significant increase from the current 4%.

Companies are aware of the need to enhance their IT infrastructure's scalability, flexibility, and manageability to improve AI readiness. 54% consider these as top priorities for their organisations.

A recurring difficulty across various pillars was the shortage of skilled talent. Anupam Trehan, VP, People and Communities APJC, at Cisco, stated, "As the race to adopt AI picks up, talent will be a key differentiator for companies. There is already a shortage of skilled talent across various aspects of AI. This means companies will need to invest in their existing talent pool to meet the growing demand. At the same time, it is crucial that all stakeholders - the private and public sectors, educational institutions, and governments - work together to develop local talent so that that entire ecosystem can benefit from the immense potential that AI offers."