Artificial Intelligence (AI) presents significant opportunities for enhancing operational efficiency and revenue generation across industries. The potential benefits of AI to the global economy are substantial. According to Goldman Sachs' projections for the next decade, AI is forecast to contribute a 7 per cent increase in global GDP and a 1.5 per cent annual upswing in productivity growth.
Organisations that successfully leverage AI have achieved both cost reductions and increased revenue. However, integrating AI into organisational workflows presents challenges, including technical debt, skill gaps and fragmented strategies. Moving forward, IT service providers can play a crucial role in helping customers address these challenges and enable AI adoption. This will allow IT service providers to capitalise on the growing demand for AI integration.
AI adoption journey
Many organisations lack the groundwork for AI integration, requiring considerable infrastructure upgrades and better data management practices. Cloud migration and robust data organisation are crucial for effective AI implementation.
A step-by-step approach to adoption is key. Many organisations are currently transitioning on-premise or hybrid infrastructure to the cloud, a process that involves the modernisation of large volumes of applications and workloads to harness the benefits of cloud computing. Once data resides in the cloud, it needs to be organised, typically within a data lake or warehouse, acting as a centralised repository for quick analysis and querying. Only then, with data centrally stored, can AI models effectively leverage it to provide actionable insights throughout the organisational workflow.
However, despite the widespread movement towards cloud migration and data analytics implementation, the integration of AI remains limited in many organisations. Several barriers hinder or slow down the journey to AI adoption, including outdated infrastructure, lack of strategic alignment and talent shortages. These challenges underscore the importance of external support in guiding organisations through the AI adoption process. IT service providers can offer valuable expertise and resources to help organisations overcome these barriers and realise the full potential of AI.
Role of IT service providers
IT service providers are well-positioned to respond to the increasing demand for AI integration. Many existing IT service providers already possess the capabilities to support organisations in adopting and implementing AI. Given that AI adoption is still in its early stages, pivoting to become AI integrators could allow you to be first movers in a significant, growing market opportunity.
Various types of IT service providers, typically offering cloud and data transformation services, are particularly suited to shift into AI integration. To achieve this, you will need to develop specialist AI capabilities tailored to the size and sectors of your target organisation, either through internal development or strategic acquisitions. While project volumes may be low initially, providers can accumulate case studies, expertise and vendor accreditations. This will prove advantageous as AI adoption continues to grow and services transition becomes more commoditised (with much higher volumes).
Key characteristics for success
Here are five characteristics that could position IT service providers transitioning into AI integrators for success in the growing AI integration market:
- Coverage of multiple steps on the IT services value chain. IT service providers that serve customers across multiple and/or higher value areas of the IT services value chain hold an advantage and are better placed to deploy and manage AI within customer environments.
- An AI-focused go-to-market approach. Given the high interest in AI deployment, service providers should seek to embrace their AI capabilities when acquiring new business. This positions them as a trusted advisor for the entire AI adoption journey, even for customers who are still in the initial stages.
- Early investment and expertise building. While current AI adoption may be low, early investment offers significant benefits. Building a strong foundation through case studies, expertise development, and vendor accreditations positions service providers for future growth and attracts investor interest.
- Offering AI strategic support. Many organisations lack a clearly defined strategy for internal AI deployment. There is a role for service providers to provide initial strategic support to define the problems that could be solved with AI, followed by developing and implementing recommended AI tools thereafter.
- Technology vendor alignment. AI integrators may choose to specialise in deploying AI solutions from a large technology vendor (e.g. Microsoft AI Copilot, Salesforce Einstein). These products, while still under development, offer mass-market appeal and can form the basis of a compelling service proposition. Deep expertise and accreditations with leading, large technology vendors can bolster new customer acquisition by capitalising on existing interest in such tools.
As AI gains traction across various industries, IT service providers have a unique opportunity to establish themselves as leaders in AI integration. By offering strategic guidance, technical expertise and ongoing support, providers can help organisations in navigating the complexities of AI adoption and driving business transformation. In this evolving landscape, the role of IT service providers in AI integration is paramount, paving the way for innovation and growth in the digital era.