Networking and security major Cisco has come out with the findings of its 2024 AI Readiness Index, and it has found that AI readiness among organisations has declined in India, with only 18 percent of them fully prepared to deploy and leverage AI-powered technologies. This is down from 26 percent a year ago. This decline underscores the challenges companies face in adopting, deploying, and fully leveraging AI. The Index finds out that given the rapid market evolution and the significant impact AI is anticipated to have on business operations, this readiness gap is especially critical.
The Index is based on a double-blind survey of 3,660 senior business leaders from organisations with 500 or more employees across 14 markets in APJC. These leaders are responsible for AI integration and deployment within their organisations. The AI readiness Index is measured across six pillars: strategy, infrastructure, data, governance, talent, and culture.
The findings reveal that AI has become a cornerstone for business strategy, and there is increasing urgency among companies to adopt and deploy AI technologies. In India, all companies report an increased urgency to deploy AI in the past year, driven primarily by the CEO and the leadership team. Additionally, companies are committing a significant amount of resources towards AI, with 57 percent reporting that as much as 10 to 30 percent of their IT budget is being allocated to AI deployments.
Interestingly, the Index finds that despite significant AI investments in strategic areas like cybersecurity, IT infrastructure, and data analytics and management, many companies report that returns on these investments are not meeting their expectations.
As per the Index, AI readiness declined across all pillars, with infrastructure identified as a pain point. One of the largest declines was in infrastructure readiness, with gaps in compute, data centre network performance, and cybersecurity, amongst other areas. Companies are investing, but gains fall short of expectations. Over the past year, AI has been a priority spend for organisations in India. AI investments have focused on three strategic areas: cybersecurity (47 percent of companies are at full or advanced deployment), data analysis (44 percent), and data management (42 percent). The top three outcomes they aim to achieve include improving efficiency of systems, processes, operations, and profitability; the ability to innovate and remain competitive; and growing revenue and market share for the business.
There is, however, mounting pressure and urgency from top leadership to implement AI technologies. Nearly half of the companies report that the CEO and the leadership team are driving AI deployment, closely followed by the board of directors. With the clock ticking, businesses in India are accelerating efforts and increasing investments to overcome barriers and embrace AI-driven transformation. In fact, 39 percent of organisations plan to allocate more than 40 percent of their IT budget to AI investments in the next four to five years, a steep climb from 7 percent of companies who said they are allocating a similar portion of their IT budget to AI currently.
The lack of skilled talent in AI is a challenge that many organisations are grappling with in India to be AI-ready. Companies have highlighted this as the top challenge across infrastructure, data, and governance, underscoring the critical need for skilled professionals to drive AI initiatives.
“As the race to adopt AI picks up pace, 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 the entire ecosystem can benefit from the immense potential that AI offers,” remarked Anupam Trehan, VP, People and Communities APJC, at Cisco.
