How sustainability and AI top Irish technology leaders’ agenda

In this pivotal period of transformation, technology leaders in Ireland are increasingly assuming an important leadership role in their organisations. Our survey highlights that technology leaders are primarily focused on operational concerns, with managing technology-related risk (43%), talent management (35%), and driving focus on security and compliance (27%) as their most critical role. Setting the vision for innovation and technology (25%) within the organisation was also cited as a key area of responsibility for technology leaders.

This expectation on responsibilities aligns with our findings on the most significant challenges faced by Irish technology leaders with managing cyber risk, managing talent, and managing data protection and flows featuring strongly.

Most significant challenges as an IT leader

What are the most significant challenges for you as an IT leader?

Many Irish technology leaders (40%) indicate their organisations are currently planning or executing a transformation or change programme. The drivers of these change initiatives are broadly in line with last year’s survey with improving quality of products/services, future-proofing the organisation against recession, staying ahead of or keeping up with competition and market disruptions, and growing revenue and / or market share at the top of the list. The survey suggests that change initiatives are being undertaken for largely positive reasons associated with the overall performance of the business.

Reflecting a notable shift from last year’s survey, having the right organisational culture emerged as the single most important success factor for transformation programmes. It rose from sixth place in 2023 to first, relegating strong cybersecurity and privacy to second. This rise likely stems from the post-pandemic return to office work, emphasising teamwork, collaboration, and interpersonal engagement, and indicates how shared cultural attributes critically shape an organisation's technological adaptation.
 
Talent remains a priority: Shortage of skilled employees to implement new technology has been cited by 27% of the respondents as a significant barrier to executing their technology related agenda, up from 18% in 2023. The need to continue to find new talent is highlighted by the fact that 38% of respondents expect to increase the capacity and capability of their IT function over the next two years, slightly up from 2023.

To retain key talent, the organisation must maintain focus on the following areas:

IT budget: IT budget availability is not seen as a challenge. The great majority of the technology leaders surveyed expect their allocation to either remain the same or increase over the next two years. This is broadly in line with the 2023 survey, indicating a stable and positive outlook for IT investments.

As technology leaders emerge as the protectors of the enterprise, they are increasingly looking to harness the power of technology to support their organisation’s sustainability efforts, enhancing the capability to establish, track, and oversee critical sustainability KPIs.

This is evidenced by the fact that sustainability management and reporting tools have been identified as the top technology that tech leaders believe will deliver the most value to their organisations over the next two years. It has jumped from 26% in 2023 to 43% in 2024, overtaking the mainstays of RPA, data, and augmented analytics and IoT. There is widespread appreciation that upcoming regulations are setting new sustainability standards and key performance indicators for organisations and technology will have to play a significant role in supporting their compliance.

Top two emerging technologies to deliver the most value for the organisation

What two emerging technologies would deliver the most value to your organisation and therefore likely to attract the largest share of investment over the next two years?

Half of the respondents say their organisation’s sustainability-related objectives will be supported using existing non-sustainability specific system capabilities, a relatively significant increase on last year’s survey. 39% say they will use sustainability specific tools, either standalone or embedded within their existing ERP solutions, for supporting sustainability objectives.

While the enthusiasm for new sustainability related tools is very welcome, it is still a nascent area. Organisations are having to respond quickly to requirements like CSRD using existing IT solutions. Yet, with increasing complexity in sustainability reporting, a need for advanced tools is emerging that is likely driving fast growth in sustainability focused technology markets.

To effectively navigate the evolving landscape of sustainability reporting, technology leaders need to consider the following actions:

As Irish organisations explore opportunities to become more efficient and increase market share in the face of competition, the adoption of AI is increasingly proposed as a key enabler for driving innovation. In light of this accelerating adoption, it’s notable that IDC predicts the implementation of new GenAI capabilities and automation will enable organisations to drive $1 trillion in productivity gains worldwide by 2026¹.

Our survey results show that Irish organisations are very interested in AI, with General AI / Machine Learning and GenAI and employee assisted technologies coming second and third, respectively, among emerging technologies that would deliver most value to the organisation over the coming two years. However, 62% of the respondents say they are currently not investing in AI technologies and do not have an AI related strategy.

Organisational approach to leveraging AI technologies

How is your organisation currently leveraging or considering the use of AI technologies?

Respondents to our survey identified a diverse range of GenAI use cases that could bring significant value to their organisations, but the more creative end of the spectrum came out on top. Legal and compliance review support and personal virtual assistance surprisingly came lower down the list.

Use cases for GenAI

Where the use of GenAI is permitted, what are the top two use cases where it is deemed to deliver the most value to your organisation?

The relatively low level of investment in AI is likely related to the lack of maturity of GenAI technology. While its potential is quite widely appreciated, its application is constrained by many factors including the lack of an accepted industry standard product. There is likely to be a prolonged tussle between providers before a winner emerges.

Organisations appear to have quite a relaxed approach to the use of GenAI by their employees and, quite alarmingly, 59% do not have a formal usage policy (i.e., do’s, don’ts, permitted, prohibited, etc.) but say unlicensed GenAI is most likely used by its employees.

Organisational stance in relation to the use of GenAI tools by employees

Which of the following statements best reflects your organisation’s stance on the use of GenAI tools by employees in support of business operations?

This is both concerning and surprising as it seems to suggest a lack of appreciation for the potential security threat posed by unlicensed GenAI. These tools risk data privacy breaches and copyright infringement, leading to potential data leaks and increased cyber threats if not managed correctly.

Businesses must continue to monitor advances in AI and examine their potential value to ensure they do not lose ground to competitors. Organisations should remain firmly focused on the value case and avoid investing in technology for its own sake. 

It is clear from the results of the EY Ireland Tech Leaders Outlook Survey 2023 and 2024 that both the metaverse and extended reality technologies are yet to convince Irish business and technology leaders of their potential value. Those that are tracking the technology as a potential future investment are also not planning to implement anything in the next two years.

This is not to say that the technologies do not have their uses, but they tend to be quite niche. For example, while extended reality technology can be extremely useful in specific areas like training people who work in extreme environments or as a support tool for maintenance and repair engineers in the aerospace and high-end manufacturing sectors, it tends to be far too expensive for lower value applications where it is difficult to justify its added value. Indeed, the technology has in some ways become a solution seeking a problem in recent years.

It would, however, be premature to predict the imminent demise of either of these technologies. After all, software as a service (SaaS) faced failure in the 1990s and early 2000s due to technical and cost barriers, yet it has since become the standard for many software offerings. 

There have been some significant changes in relation to cloud adoption since the EY Ireland Tech Leaders Outlook Survey 2023. The number of organisations hosting all their corporate systems on the cloud has more than doubled to 32% from just 15% in 2023, while the number using cloud for less sensitive data and retaining critical systems on premises has fallen quite dramatically from 39% to 17%.

Organisational cloud strategy

Thinking about cloud in your organisation (private, hybrid or public), which of the following statements are true?

One third of respondents say they are pursuing a cloud strategy and are in the process of migrating away from on-premise infrastructure.

Conversely, just 13% of respondents described adopting greater use of cloud as one of the most important roles for senior technology leaders. This indicates the degree to which the cloud has matured as a technology and become the default for many organisations. Indeed, with more than 80% of organisations either on the cloud or migrating to it, the adoption phase would appear to be nearing its end. 

Cybersecurity matters emerge as a key area of concern for technology leaders in Ireland, with anticipation of increasing challenges over the next two years. The percentage of respondents who identified elevated cyber risks and the management of data protection and flows as critical challenges has risen to 61%, a notable increase from 53% in 2023.

Interestingly, when it comes to challenges to the organisation’s growth over the next two years, cyber threats increased by precisely the same amount as economic disruption decreased. This could suggest that the diminishing prospect of a global recession has seen technology leaders renew their focus on cybersecurity and that the threat environment may not be significantly worse than it was last year. However, with hackers and other bad actors now adding GenAI and other advanced tools to their malign arsenal it is no surprise that cyber awareness has increased.

This is perhaps one of the reasons why a quarter of respondents pointed to their organisation’s vulnerability to cyberattacks as an area of concern.

A significant number of respondents also say they do not have sufficient controls in place to identify and contain threats. From a positive perspective, this demonstrates an encouraging level of awareness of the evolution of the cyber threat scape and the growing sophistication of cybercriminals. On the other hand, cybersecurity does not feature at all among the top priorities for IT functions over the next two years.

Notwithstanding that apparent omission, the ability of the technology leaders to put adequate defences in place appears to be somewhat constrained by financial and other considerations. One of the more interesting findings from our survey is that the only area where they are experiencing any budgetary issues is cybersecurity.

Top two concerns regarding information security

What do you consider to be biggest challenge to your organisation’s growth over the coming two years?

The top two concerns expressed in relation to information security are lack of awareness and sponsorship for security related initiatives and the costs associated with cybersecurity and cyber insurance. This may point to a worrying disconnect between technology leaders and other senior leaders in organisations in matters of cybersecurity.

This could relate to the nature of the expenditure being sought. As a purely defensive measure, it is naturally difficult to estimate potential return on investment. Therefore, when cyber spend comes up against competing priorities at C-suite or board level, those with clear cost savings benefits or return on investment business cases are more likely to be favoured.

External factors also come into play and cyber insurance costs are increasing for all organisations in line with the evolution of the threat landscape. This is straining IT budgets available for cybersecurity spending.

Effective board representation is, therefore, crucial. Technology leaders with the ability to argue for cybersecurity investments face fewer budgeting challenges. They must have the ability to communicate the urgency of cyber threats to the C-suite and board members to secure the necessary support.