AI-Readiness declines in APAC as ROI not meeting expectations

Reality sets in for companies in Asia Pacific on their AI readiness, with only 15% in APJC fully ready to capture AI's potential, down from 17% last year.

Only 15% of organizations in Asia Pacific are fully prepared to deploy and leverage AI-powered technologies. These were the findings from Cisco’s 2024 AI Readiness Index. The figure represents a decline in AI readiness in the region, signifying the challenges companies are facing in adopting, deploying and fully leveraging AI.

The Index is based on a double-blind survey of 3,660 senior business leaders from organizations with 500 or more employees across 14 markets in APJC. These leaders are responsible for AI integration and deployment within their organizations.

Interestingly, the report revealed that there continues to be mounting urgency from top leadership to implement AI technologies with 49% of companies stating that the CEO and the leadership team are driving the pressure. 30% of organizations also plan to allocate more than 40% of their IT budget to AI investments in the next four to five years.

However, despite significant AI investments in strategic areas like cybersecurity, IT infrastructure, and data analytics and data management, many companies also felt the returns on these investments are not meeting their expectations. Specifically, the top three outcomes they aim to achieve are improving the efficiency of systems, processes, operations, and profitability as well as the ability to innovate and remain competitive plus being able to grow revenue and market share for the business.

“The majority of the respondents still see significant opportunity and value in AI. And this is an important acknowledgement of the opportunity that is available to move forward. It’s not just Asia Pacific as the trend is similar globally as well,” commented Raymond Janse van Rensburg, Vice President, Networking and Solutions Engineering, APJ and Greater China at Cisco.

Rensburg also feels that while every organization experiences challenges in their AI journey, it is still different on the curve for each of them. As such, he believes the realization on AI is setting in and it will be interesting to see the index next year, especially with 86% of organizations stating they have got 18 months to get their AI plans going or risk being left behind.

AI readiness and the partner ecosystem

As such, the findings signal the important role the partner ecosystem plays in ensuring businesses are capable of adopting and deploying AI use cases in their organizations. During a media briefing at Cisco Live APJ in Australia, Dave West, President, APJ and Greater China at Cisco mentioned that the partner ecosystem is the foundation is everything Cisco does in the region. He also said that over 95% of Cisco’s business in the region is led by its partners.

“If we look at Australia, they are often first in adopting new technology and leading from the front in APAC. They have been a strong integrator. But with AI, it takes a bit of building. Australia is still trying to find its way in the new AI world, and they are well on their way. A lot of enterprises are thinking how to be productive, profitable, save cost, drive greater customer outcomes,” said West.

Echoing his views is Jacqui Guichelaar, Senior Vice President and General Manager, Customer Experience, APJ and Greater China at Cisco. She pointed out that adoption of new technologies is not easy, especially when it comes to convincing teams and engineers in an organization to embrace something new.

“When it comes to AI, we need to show how amazing it is. We are changing the way things are. There will definitely be those who will be excited and also those who may be resistant. However, it's becoming easier. Organizations need to have the right mindset and people who can lead the way,” explained Guichelaar.

On ensuring businesses are able to realize the potential ROI from their AI investments, Guichelaar mentioned that Cisco’s renewal and customer engagement teams are constantly engaged with customers from the start and now looking to get in front of that as well. As ROI is key for businesses, she believes that it's imperative for Cisco to be there throughout the customer journey and make sure they are satisfied with the entire process.

“As we land, we need to activate, expand and deliver to customers what they expect from us. We make sure we deliver what we have promised our customers. As we integrate more capabilities across portfolios, it will take activation to ensure the outcomes are positive. As we need to do all the right things for customers,” added West.

Meanwhile, Tom Casey, Senior Vice President and General Manager, Products, and Technology at Splunk pointed out that having local relationships and local access is key in the region. And he believes this is only possible when the processes are embedded locally.

Splunk, which was acquired by Cisco, has focused on cross training patterns with Cisco’s portfolio as it looks to enhance partner capabilities. Casey explained that the market access with Cisco is a massive opportunity for them and training programs helps partners better strategize to deliver modern experiences to customers.

Enhancing partner capabilities

For Tom Gillis, Senior Vice President and General Manager, Security Business Group at Cisco, the landscape is changing really fast and while partners are helping customers with a lot of processes, most of these will be automated soon.

“So, what can partners do? They will need to go up the stocks and offer higher value services. For example, the way we integrate Cisco XDR into Meraki turns every MX into a network sensor. Teams can now have managed XDR. Partners can offer XDR in a margin. It’s a sticky service but of high value that partners can deliver, especially since managed security services being a big deal in the industry,” said Gillis.

In conclusion, the AI Readiness Index not only represents the state of businesses in their AI journey but also showcases the opportunities that partners can leverage to help customers in their AI journey.

As West puts it, the partners are an extension of Cisco’s teams on the ground. Cisco trains both teams and partners but the reality is that they may not be able to get it to everyone fast enough. As such, West mentioned that Cisco focuses, prioritizes and scales across the region.

“Ensuring partners understand our new tech and innovation is critical for us and it’s a topic we talk about all the time. We continue to have open conversations with our partners. Not only are they an extension of us but we are also an extension of their ecosystem. They are more capable in some areas than we are. It’s the power of coming together that makes our relationship great,” concluded West.