To achieve a step change in business performance, organizations are combining technology modernization and sustainability into their core business processes. To achieve this, better user support tools are needed that can help business leaders make the increasingly complex decisions needed to optimize costs, service levels, working capital and sustainability.
Generative AI is a catalyst for business transformation, and the technology is capturing the attention of business leaders around the world. As CEOs respond and embrace generative AI, they are faced with the monumental task of both operating responsibly and maintaining the trust of business, employees and shareholders.
What CEOs say about generative AI
The annual CEO survey*, CEO decision making in the age of AI, trade with intentionResearch found that 75% of CEOs surveyed believe competitive advantage depends on who has the most advanced generative AI.
CEOs rank productivity or profitability as their top business priority – up from sixth in 2022, according to the new CEO Survey from the IBM Institute for Business Value. These leaders also recognize that modernizing technology is key to achieving their productivity goals and consider it their second-highest priority. Yet CEOs face significant barriers as they rush to modernize and adopt new technologies like generative AI.
CEOs firmly believe in the benefits of generative AI across their organizations, but when it comes to AI readiness, there seems to be a disconnect with their management teams. While 69% of CEO respondents see broad benefits from generative AI across their organizations, only 29% of their management teams agree that they have the internal expertise to adopt generative AI.
What does a battle with AI mean for sustainability?
Despite a shift in their priorities, sustainability remains a key challenge for business leaders. CEOs cite environmental sustainability as their biggest challenge for the next three years. What keeps executives from achieving their bigger goals? Leaders point to factors such as difficulty in achieving this manage manual dataunclear ROI and economic benefits, lack of insights from data and regulatory barriers as the three biggest challenges in achieving sustainability goals.
The fact is, Sustainability and profitability can go hand in hand. Forward-thinking organizations are using sustainability as an opportunity to advance their business and achieve greater transparency around their sustainability commitments.
Creating a balanced sustainability/profitability roadmap is a powerful first step in moving organizations forward in the age of AI. This roadmap can help leaders identify opportunities and gaps in the current IT environment, which will aid in more informed decision-making. Applying data and AI towards sustainability goals is one way leaders can help increase productivity.
It appears that corporate boardrooms are taking notice of the link between sustainability and profitability and are holding CEOs accountable for their companies’ sustainability efforts. In fact, the percentage of CEOs with compensation linked to specific sustainability measures has more than tripled since 2022 to more than 50% this year.
Modernizing IT environments can help organizations understand their data and make progress toward their sustainability goals in several ways, including:
- AI implementation that automates manual data and converts it into actionable output without compromising the security or reliability of the data
- Green IT solutions that can help reduce and even reduce an enterprise’s IT carbon footprint Reduce up to 30% of computer costs
- Advanced analytics platforms that provide transparent management of sustainability data across value chains, with a single point of truth for sustainability analytics data, and create greater transparency
Learn more about sustainability, CEOs and the role of AI
Sustainability is still a team sport and it takes leadership across the business to drive real, lasting change. It is imperative that CEOs and other decision makers view sustainability as a necessary and business driver.
The IBM Institute for Business Value, in partnership with Oxford Economics, interviewed 3,000 CEOs from more than 30 countries and 24 industries as part of the 28e edition of the IBM C-Suite Study series. These conversations focused on executives’ perspectives on leadership and business; their changing roles and responsibilities; and CEO decision-making today, including key challenges and opportunities, their use of technology, data and metrics, and their visions for the future. The IBM Institute for Business Value also conducted a survey of 200 CEOs in the United States on their reactions to generative AI.