India is on the cusp of digital hyper growth. Indian businesses have realized that differentiated services and experiences are key to moving ahead of the competition and staying relevant, and they are now turning to emerging technologies to build these differentiated services and experience more than ever before. But it is speed and agility, along with adequate understanding and deployment of the relevant technologies, that will make a difference.
Digital technologies such as generative AI (genAI) have gained lots of interest and traction in India and will continue doing so throughout 2024. Despite some challenges, 2024 will see many successful use cases of genAI implementation, which will require firms to have their AI strategy in line with their data and cloud strategies. We believe next year that genAI will not only stay in the “limelight” but will also find its way into many initiatives across companies in India.
Our top five India technology predictions for 2024 are:
- One in five Indian firms will benefit from genAI’s transformative impact. GenAI is in the early stages of adoption. Indian companies, especially ones that have not modernized their core, will face a lot of challenges, including data quality, data governance, data availability, data integrity, skill set availability, suitability of the right large language model (LLM), security, genAI concerns such as hallucinations and biases, and more. These major roadblocks, if not addressed properly, can lead to “genAI disasters” that have potentially catastrophic results. Only digitally advanced companies in India (one in five) will be able to successfully benefit from genAI implementations.
- Software commitments to genAI will drive 90% of firms to modernize their core. Indian companies have been carrying a lot of tech debt for the past decade. These old technologies hinder adoption of any new technologies and best practices. Ninety-one percent of companies are expecting investments in genAI to increase in 2024. CIOs are aware that, for genAI implementations to be successful, their data quality must be excellent, and they should be able to run the latest AI and analytics tools on top of large data lakes/warehouses. Old technologies that do not allow data integration and interoperability will be major roadblocks in genAI adoption. CIOs will address these challenges by modernizing their core.
- A fifth of India CIOs will revisit IT financial management and FinOps practices to fix post-pandemic tech debt. Push for genAI adoption will force Indian companies to work on removing tech debt. A significant part of enterprise modernization involves cloud adoption, as it is a faster route to adopt new technologies and address tech debt. But soon organizations will realize that they need to manage and maintain their cloud spending, leading to adoption of IT financial management and FinOps.
- Late adopters will finally move on SaaS, with only 11% staying on the sidelines. Sixty-one percent of Indian companies are either consumers of software-as-a-service (SaaS) services or plan to be on SaaS applications by 2024. Only 11% of Indian companies will continue to be using on-premises solutions. These are primarily companies and applications in the highly regulated sectors. Indian companies will be forced to move to SaaS solutions as vendors increasingly stop supporting on-prem solutions and offer new releases only on their SaaS platforms. Managing and maintaining on-prem solutions will become an expensive affair, and companies should get ready to operate such solutions in silos, with not much integration with new innovative technologies or solutions.
- Firms pushing into genAI experiences will be the catalyst for stricter SaaS policies. As personalization capabilities mature, software vendors will tout the capabilities of their LLMs to provide the intelligence required to segment, target, and deliver customized content in order to impact topline revenue growth faster. As some industries jump into adopting these new capabilities, others, especially in the highly regulated sectors, will be more careful and wary of these new features.
This is just a glimpse of our top predictions. There are many more predictions around tech, and as always, there are finer nuances around these that would benefit from dialogue. I would be happy to chat with you on these topics in detail! Please reach out to us for an inquiry or guidance session to know more.