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Outlook on 2024 - CIOs Doing More with Less

From what we’re hearing in the Data Analytics industry, we expect to see companies hold or reduce their technology spend in 2024. Although in contrast to what some industry analysts are saying, we see companies are tightening things up and optimising for profitability (with a greater impact on traditional businesses than digital ones). 


Companies with property assets like REITS or CRE who are in position to refinance or renegotiate loans will be doing so at a higher rate than they did five years ago. So essentially, companies that have debt as part of their business model are going to feel this more than others. 


They will aim to hold growth steady or instead, re-tool for profitability. So in doing that, any kind of technology initiative that's geared towards growth is not going to be as attractive. They will look at technology that's helping them shed costs. 


Because of this, we expect three things to happen this year:

  • Big push to reduce technology spending 

  • Slow down on our GenAI and AI initiatives

  • Strengthening of internal teams 



Reduce Technology Spending

Leaders looking to directly reduce spending (vs creating value or cost deflection) are going to have a greater chance of success this year. Commonly, those decisions are made by taking the following actions: 

  • Better manage cloud usage and/or bring on-premises data into the cloud

  • Consolidate vendors to streamline redundant data sources 

  • Reassess service contracts, so you pay only for things you use


For example

  • If you are using a property management software system that has 600 licences and you have a similar system  generating the operational information you need, then you can retire those licences. 

  • It’s time to get serious about legacy systems to save money. Move on-premises data servers or a combination of on-prem and data centre hardware to the cloud.

  • Reassess service contracts to eliminate redundant add-ons if it's feasible. Alternatively, maintenance contracts might include items that are typically incurring office expenses like printer toner. 

Take a look at our blog on Modernising Data Analytics for REITs for examples by business unit.


Continued Innovation

This one is potentially polarising, but I feel like, in the enterprise space, we’re in for a bit of an AI winter. Although vendors will continue to push along their AI agenda, we think the funding and experimentation from 2023 has not yielded demonstrable value at scale. We see CIOs monitoring this space, but cautious to make any significant investments in GenAI for 2024 unless there are real, industry specific, reference-able success stories that clearly show positive ROI.



On Pressure to report gains in AI

“True innovation lies in the ROI phase rather than the hype phase

Jim Young, Realcomm Founder

Realcomm Innovation Outlook and Reflection Webinar, Part I


There are prototypes and presentations out there but nothing of Enterprise Value. The economics and some of the projects aren't as attractive in production. We’ve heard a lot of chatter that it’s really easy to build solutions on OpenAI's APIs. However, when you start to look at how they monetize on API calls and you do that calculation, the total cost of ownership starts to become very expensive.


There's just not a lot of maturity there. If you combine that with tight budgets within the CIO office, people will still be following it and vendors will continue to add generative AI capabilities to their products. But, we think CIOs are going to be risk averse and will require some very real referenceable results. 


Here are some points to think about:

  • GenAI is not the only thing on the table

  • Save time and improve efficiency with simpler tools or traditional ML

  • Communicate a strong use case, with the long game in mind


Strengthening Internal Teams

We’re going to start seeing a change in how consultants are used. Teams are getting squeezed and the work still has to get done while finding ways to do it cheaper. We expect to see companies pulling back on their consulting spend and re-investing that to build out their own internal teams.


Here are some areas that are best to work on:

  1. Focus on the interconnectedness of operational data

  2. Establish business unit partners to share in house expertise

  3. Bring in co-creation partners to build upon internal team experience


We think the days of the large consulting engagements are numbered, especially in areas that are of strategic value to organisations like cyber, data and AI.


The 2024 Data Analytics Strategy

The best way to tackle 2024 is with a sound data and analytics strategy that strengthens fundamentals with the input of people who use the data in their day-to-day. 


We can help you start the year off right:


Solve the Problem First - the Right Problem - Reduced or frozen budgets create constraints. A laser focus on solving the right problem will get you through the challenges. 


Business Alignment - A shift in mindset where business units and IT goals are in alignment will give people the insights they need to make better, cost saving, decisions. 


Data Modernization - Under the pressure to report gains in AI, a single source of truth with clean, synced data sources is needed to save on R&D. 


Can’t see through the weeds?

We can help with your 2024 data analytics strategy




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