2024 will be the year of doing more with less, according to the results of the Everest Group 2024 Key Issues Study of enterprise executives.
"’Do more with less’ will be the mandate in 2024 for both enterprises and service providers,” said Hrishi Raj Agarwalla, vice president at Everest Group. “Enterprise leaders in our 2024 Key Issues Study are focused on lowering costs and increasing profitability and will be placing high expectations on service providers with little room for rate increases.”
The top priorities for enterprises for the year ahead are revenue growth and a continued emphasis on cost optimisation.
Talent acquisition, which dominated enterprise concerns just two years ago, is no longer among the Top 5 expected challenges, falling to No. 8 from previous No.1 and No. 3 positions in expectations for 2022 and 2023, respectively.
“Enterprise spending in 2024 will be directed toward modernising technology, data analytics and process optimisation. We’ll certainly see a ramp-up in GenAI investment as organisations continue to explore use cases and try to keep pace with the rapid changes AI is bringing.”
“Overall, our research indicates that 2024 will be a ‘nose to the grindstone’ year of improving operational efficiency,” he concluded.
Findings from 2024 Key Issues Study
New technologies drive optimism
Although “bullish” may be too strong an adjective to use about enterprise expectations for 2024, the majority of enterprise executives are optimistic about the evolution and adoption of new technologies (76%) and positive changes in customer interest and purchasing behaviour (52%).
However, 75% of executives believed global macroeconomic conditions would have a negative influence on their business in 2024. Similarly, 68% of executives believe the geopolitical environment will pose challenges in the year ahead.
The global IT-BP services industry will continue to grow and shift
A vast majority of enterprises (82%) expect their global services budgets either to remain flat (39%) or increase in 2024 (43%). The headcount growth is also expected to be lower than in 2023. Further, enterprises expect to increase the leverage of Global Business Services and offshore locations.
New investment priorities
The key levers executives plan to use to achieve their business goals in the coming year include operational levers such as:
- Technology modernisation
- Data analytics and insights
- Process optimisation and operational efficiency
Productivity and resilience will drive technology investments
Executives ranked cybersecurity as the highest priority technology investment for the next six to 12 months, followed by cloud solutions, advanced automation, big data analytics and generative AI (GenAI). Enterprises are still early in their GenAI adoption cycles. Due to a lack of in-house capabilities, many enterprises are turning to service providers for help in integrating GenAI into their operations. Most executives (67%) expect GenAI to improve or transform workflows in functional areas.