In spite of slow economic growth, few tech leaders will be reducing their IT budgets over the next 12 months, the Nash Squared digital leadership report pulse survey has revealed.

The report, which forms part of a larger annual survey of technology leaders, took in the views of 322 digital leaders, exploring factors that may have changed in the past six months. When asked to assess IT budgets over the next 12 months, 43% of those polled said their IT budget would be increasing, 45% expected their IT budget to remain the same, while 12% said their IT budget would decrease.

The Nash Squared digital leadership report pulse survey found that growth in headcount investment is lower than at any time since the company has been measuring headcount. According to Nash Squared, digital leaders are looking to increase the impact of technology through technology, such as using artificial intelligence (AI) for code development and customer support, and are currently cautious about adding people. “We want to grow our impact, not our headcount,” one respondent said.

Nash Squared reported that the poll shows that digital leaders are focusing on technology investments to deliver operational efficiencies – in other words, improving the performance of the business. Nash Squared noted that this is similar to what has been seen in previous economic downturns, where the focus of technology tends to be inward-looking.

Almost three-quarters of organisations (72%) were found to have deployed generative artificial intelligence (GenAI) to at least some extent among their employees, and one in five have deployed it enterprise-wide (21%). Nash Squared expects the adoption of GenAI to be more pronounced in larger organisations where data volumes are high. Implementations have been facilitated by the relative simplicity and low costs of rolling out the technology as a productivity tool and a desire to explore its possibilities.

In the report, Nash Squared noted that like the growth of cloud computing 10 years ago, GenAI is largely being deployed as shadow IT, with users accessing tools outside the watchful eye of the IT department. One digital leader commented: “Part of the reason we rolled out GenAI enterprise-wide was to stop people doing it themselves, and to put proper governance in place.”

But while the adoption of GenAI is growing, the survey also found that 54% of digital leaders believe unproven business cases are holding the technology back. Although many have been impressed by what GenAI can do when pointing it to the vast amount of data available on the public web, the report noted that data is a repeated concern for digital leaders. Some have found corporate data lacking in quantity and quality. One respondent commented: “We tried to feed it with the content of our helpdesk software. Failed Big. Cancelled.”

“As organisations change and grow, AI will be stitched into the operations and structure, its impact happening bit by bit”

Bev White, Nash Squared

Bev White, CEO of Nash Squared, said the survey shows there is great promise in AI. However, she noted that UK tech leaders are still trying to make it work. “There’s no doubt there have been some incredible advances. One tech leader mentioned how the last year has seen a giant leap in cancer screening through AI – good news for us all,” she said. “Another talked about how machine learning has supported the fundraising revenue for their higher education institution, opening access to a wider student population.”

In discussions with tech leaders, Nash Squared found there was a belief that AI’s impact will be evolutionary rather than revolutionary. “As organisations change and grow, AI will be stitched into the operations and structure, its impact happening bit by bit,” said White.

While there have been concerns around AI replacing human jobs, White said the survey showed that organisations with company-wide implementations of GenAI are more likely to be increasing tech headcount in the next year than the average.