India’s AI Preparedness Declines as Market Evolves and Impact Looms

India, Nov 13, 2024 — Cisco, the worldwide leader in networking and security, today announced findings from the Cisco 2024 AI Readiness Index. The index reveals that only 18% of organizations in India are fully prepared to deploy and leverage AI-powered technologies, down from 26% a year ago. This decline underscores the challenges companies face in adopting, deploying, and fully leveraging AI. 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 organizations with 500 or more employees across 14 markets in APJC. These leaders are responsible for AI integration and deployment within their organizations. The AI readiness index is measured across six pillars: strategy, infrastructure, data, governance, talent, and culture.

Acting with Urgency

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 leadership team. Additionally, companies are committing a significant amount of resources towards AI, with 57% reporting that as much as 10% to 30% of their IT budget is being allocated to AI deployments.

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 companies accelerate their AI journeys, it’s critical they adopt a comprehensive approach to implementation and connect the dots to link AI ambition with readiness,” said Dave West, President, APJC, Cisco. “This year’s AI Readiness Index reveals that to fully leverage the potential of AI, companies need a modern digital infrastructure capable of meeting evolving power needs and network latency requirements from growing AI workloads. This must be supported with the right visibility to achieve their business objectives.”

Key Findings

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 center network performance, and cybersecurity, amongst other areas. Only 21% of organizations have the necessary GPUs they need to meet current and future AI demands and 36% have the capabilities to protect data in AI models with end–to–end encryption, security audits, continuous monitoring, and instant threat response.

Companies are investing, but gains fall short of expectations: Over the past year, AI has been a priority spend for organizations in India. AI investments have focused on three strategic areas cybersecurity (47% of companies are at full/advanced deployment), data analysis (44%), and data management (42%). 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.

Despite increased investments, on average half of respondents said they have either seen no gains or the gains have fallen short of their expectations, in augmenting, assisting, or automating current processes or operation.

Relentless pressure to succeed: There mounting pressure and urgency from top leadership to implement AI technologies. Nearly half (48%) of companies report that the CEO and the leadership team are driving AI deployment, closely followed by the board of directors (39%). With the clock ticking, businesses in India are accelerating efforts and increasing investments to overcome barriers and embrace AI-driven transformation. In fact, 39% of organizations plan to allocate more than 40% of their IT budget to AI investments in the next four to five years, a steep climb from 7% of companies who said they are allocating a similar portion of their IT budget to AI currently.

Companies recognise they need to do more to be better prepared to leverage AI effectively. Across India, 55% rated improving scalability, flexibility, and manageability of their IT infrastructure as their top priorities, highlighting an awareness of the gaps that must be
addressed to improve overall AI readiness.

Addressing Skills and Talent Gaps

Despite unique challenges within to each pillar, there is a common theme that has emerged across the board – that of lack of skilled talent. Companies highlighted this as the top challenge across infrastructure, data, and governance underscoring the critical need for skilled professionals to drive AI initiatives.

Anupam Trehan, VP, People and Communities APJC, at Cisco, said: “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.”