How data, AI and resilience are redefining competitive advantage

Addressing data and AI issues in the context of business needs

A HotTopics Food for Thought in partnership with Hitachi Vantara

Overview

• AI needs good data reliability
• Machine Learning and Operational Technology deliver business benefits
• Businesses need a new data culture
• Managing AI agents
• Identifying the right level of governance

Economic volatility, geopolitical instability, cyber threats, supply chain disruption, and the rapid rise of AI are reshaping the environment in which organisations operate. Today, the ability to make timely and informed decisions has become a defining source of competitive advantage.

Data is now being understood as the way organisations can become resilient, increase their competitive advantage, and, without good data, organisations cannot harness the abilities of artificial intelligence (AI). A recent HotTopics Food for Thought debate in partnership with Hitachi Vantara revealed that although the business, both at a senior leadership and workforce level, understands the importance of data, there are many obstacles for digital leaders to address.  

Attendees described how their organisations definitely see data and AI as opportunities for increasing the competitive advantage of the firm, but that they faced a series of obstacles to being in a position of data-led or AI-powered competitive advantage at present. These include issues outside of the power of the digital leader. Macro-economic issues and how these are reshaping the market the digital leaders operated in were among these; this in turn led to budget cycles being shorter, making it harder for digital leaders to commit resources, whether technological or talent, to those data programmes. Data projects are often time-consuming, require distinct skills, and may need new data management technologies, the attendees said.

With the backdrop of oil prices seesawing up and down due to a war in the Middle East, the continued conflict in the Ukraine and the ever-present threat of tariffs on many sectors, it is of little surprise that digital leaders and their seniors are worried about committing to long-term change. In addition to these threats, the attendees said cyber security threats were increasing. This is also a time and resource constraint on digital leaders. With data being one of the key assets that cyber criminals target, our digital leaders are working hard on ensuring their data is secure.

The CEO of the National Cyber Security Centre (NCSC), a UK government-backed agency for cyber security, recently revealed that over three-quarters of the cyber attacks impacting the UK were from hostile state actors, in particular Russia, China and Iran.

As our digital leaders looked to protect the data of their organisations, they also said the reliability of the data needed to be addressed, in particular if it was to be used for AI. Many said their organisations still suffered from data silos in departments and that as a result, the firm struggled to have a single version of the truth. This delayed or made data-led decision-making difficult or even impossible. This issue, in turn, had a part to play in pockets of resilience to AI adoption in organisations. More than one attendee said that if AI delivers unreliable outcomes because it cannot access good data, then time-poor employees will not adopt the technology and continue working in their traditional ways. This may then hamper productivity.

When discussing how to address this obstacle it was raised by digital leaders that they were constantly looking to strike a balance between good data governance, but not a level of data governance that was a pain and a blocker to staff.

Finding opportunities

With attendees from manufacturing, fast-moving consumer goods (FMCG), professional and financial services, there was a desire to overcome these obstacles and explore new data strategies and methods.

In manufacturing, a data and digital leader revealed that machine learning, when integrated with the operational technology, was delivering significant benefits. These ranged from better maintenance of the machinery, through to an adaptability to change production lines according to the market shifts.

As the discussion moved to AI, and in particular the use of agentic AI for business processes and code development, one digital leader revealed that agentic AI had enabled his organisation to codify a great deal of its technology operations, that meant that if there were disruptions or staff losses, they felt they had a short-term assistant in the technology that could help manage the IT estate. This certainly gained a great deal of interest from peers. The digital leaders were not advocating cutting the workforce and replacing them with AI agents, but instead saying that the adoption of AI agents meant there was less strain on the existing workforce, and less need to retain talent no matter the cost. You can see that this would help a digital leader assess their workforce, and if people do decide to leave, they have the capacity to consider new skills they could employ instead.

On the topic of AI agents, a number of attendees said they had already witnessed AI drift and a reduction in quality of the AI agents in use in their firms. They said this was a concern, as it can lead to hallucinations. The greatest concern here was that many staff are already becoming reliant on AI, and placing high levels of trust in it. Having faced issues with AI agents under-performing, one digital leader said they had witnessed AI agents being placed on a performance review, utilising the same human resources protocols as poor-performing staff. This was an idea that interested a number of attendees.

Budgeting

This HotTopics Food for Thought debate took place in a week when AI token costs, often dubbed tokenomics, was at the forefront of enterprise technology news and debate, and it came up as an issue our community of digital leaders were grappling with. Many said their organisations had not yet got a true handle on cloud costs, and therefore they were concerned that AI costs would become unwieldy, and that their teams would be held to account for this. Yet CEOs are demanding that all levels of the organisation adopt AI.

Digital leaders are struggling to get the organisation to understand that AI is the right tool for certain use cases, but that existing technology or methods are more cost-efficient and accurate for other use cases. It was clear from this line of debate that our digital leaders see getting AI costs right will be a key part of AI delivering a competitive advantage to the business. More than one attendee remarked that if the data is well managed and structured, then the AI costs will not spiral and the organisation will get that advantage from using AI.

Digital leaders clearly see the opportunity for data and AI to deliver competitive advantage to their organisations, and as we heard, they face challenges both from within the business and in the wider economy. Whether it is AI agents taking retention pressure off the shoulders of digital leaders, or AI agents being placed on performance review, this was certainly a debate that provided food for thought.

In partnership with