IT 3.0: What AI means for the future of technology leadership

How AI is reshaping enterprise software — and IT

Artificial intelligence (AI) is changing technology leadership, team dynamics and underlying IT operating models. So how do tech executives respond to the latest wave of disruption, balancing business empowerment with IT control - and IT innovation with business-as-usual?

In recent years, the information technology department has emerged from the dark ages. No longer considered a back office function, consigned to the dimly-lit basement, IT has become a critical business partner at the heart of every modern enterprise, infusing everything from sales and marketing to finance and HR. 

Technology leadership has evolved through this time too, to the point where today’s CIOs and CTOs are considered influential stakeholders and boardroom members whose impact extends beyond the confines of day-to-day technology delivery.

Small wonder then that, according to Gartner’s CIO Agenda Survey, 80% of CIOs have expanded their role, with 18% now leading non-IT functions and 10% leading P&L efforts. 

And yet, for all of this, these same leaders face the same competing tensions of yesterday, balancing the quest for innovation with common constraints. Today, many of these executives find themselves forced to do ‘more with less’ against a backdrop of macroeconomic and geopolitical pressures, and yet expected to lead AI efforts for fear of being left behind by the organisation’s competitors.

During this Food for Thought discussion, hosted by HotTopics in partnership with Box at the House of Commons, executives discussed how AI is changing technology leadership, transforming enterprise software - and prompting the arrival of IT 3.0; a new design in the information technology department.

This session was discussed under Chatham House Rule and attended by the following executives:

• Gillian Lamela, Former, Executive Director, Public Cloud Enablement, JP Morgan
• Karen Ambrose, Chief Data Officer, The Francis Crick Institute
• Chris Lord, Group CTO, Babcock International
• Mark Bramwell, Chief Digital and Information Officer, Said Business School, University of Oxford
• Richard Millar, SVP Operations & Technology Chief Operating Office, Risk and Control, Citi
• Mariana Montalvão Reis, Enterprise Head of Data Governance, WPP
• Alison Davis, Executive Director - Global Customer Engagement Solutions, GE Healthcare
• Krenar Muhidini, Director of Engineering, EML Payments
• Richard Frost, CISO, esure Group
  
• Samantha Wessels, President EMEA, Box

Tech leadership is under ‘existential threat’ 

The pace of change may be faster than at any other point in the digital era, but technology executives have seen similar threats to their influence in the past.

From the introduction of the web to SaaS and Business Intelligence (BI), leaders have had to focus on empowering and supporting business units, rather than be the gate-keeper seen to be stifling progress and innovation. With AI, however, this can be challenging. The proliferation of these technologies can often grow within organisations unchecked - and ungoverned.

During this HotTopics Food for Thought discussion, executives raised newfound concerns over shadow IT, with line-of-business departments already spinning up their own GPTs – and IT only being asked to play an active role when employees leave the organisation – or worse, when things go wrong. 

This democratisation of technology, and the ease of use in which individual employees and departments can use these AI tools, means there’s a risk of IT being left behind if they don’t gently coax, support, encourage and enable their line-of-business peers.

“I think it's a bit of an existential threat,” said one leader in attendance, “in the sense that if we have not yet proven that IT is crucial to business growth and we're part of it – then we will be thrust into the back office. We will be hated as a cost.”

“As CIOs, CTO, or CDIOs, we need to avoid becoming known as the ‘abominable no man’,” said another leader. “We've got to be on the pitch, supporting and embracing this change, because if we don't, it's going to happen around us, and we will become obsolete.”

Another leader, working in the media and entertainment industry, illustrated this point further- saying that there’s an ongoing fight for who owns the AI strategy, budgets and responsibilities. 

During other recent HotTopics events, the consensus has been that, amidst an increasingly crowded C-Suite, the CIO and Chief Data Officer will need to find a way to join forces when AI becomes falls into the ‘trough of disillusionment’ and part of everyday BAU.

“There's a lot of internal conflicts at the moment in how to move forward with the AI strategy, and who is basically on the budget, and who ultimately is gonna own things. It's a point of inflection.”

From ‘utility to facility’: The strategic shift required in IT

For the technology leaders here, AI’s omnipresence across the organisation - and the appetite from the boardroom down - requires a fundamental shift in how technology departments not only operate - but how they’re perceived internally.

With one leader advocating for IT to move from ‘utility to facility’, the consensus around the room was that IT needs to move beyond traditional system management to strategic business enablement through intelligent technologies like AI and machine learning. Or, in other words, to a world where an IT function, augmented by the assistance of GenAI and agentic systems, enables the business to do better, more valuable work, faster.

Silicon Valley tech giants have already called for the same trend; Nvidia CEO Jenson Huang recently said that ‘the IT department of every company is going to be the HR department of AI agents in the future’, while Box’s Aaron Levie says ‘we can imagine going to the IT department to actually get one work done with AI in the company’. No surprise then that research has shown that nine in ten leaders believe agentic AI will become core or peripheral towards IT operations within the next two years.

This groundswell of AI adoption could yet help instigate better, more collaborative and agile partnerships between IT departments and their business counterparts.

“AI has brought business functions and IT together quicker, because in the past, IT architects might go build a data lake to replace reporting and tell the business, ‘I think you need this.’” said one executive.

“But nowadays, you get the business talking about AI, it's very much in the newspapers. How can it reduce the cost in my contact centre? How can it improve customer service? I think it’s driving the business and IT to work more collaboratively in enabling the business to meet those high-level goals.”

Technology leaders have, of course, been here before. The introduction of the world wide web, ecommerce, cloud and big data have also posed similar challenges to IT’s impact within the organisation.

“One of the things I've been saying is; AI is just IT 3.0,” said one executive in attendance. “Digital was IT 2.0. AI should just be the way we do IT in the future, but we've got to elevate ourselves. 

“The medium can't become the message,” said a former CIO, who would go on to compare the current AI battleground to the early days of information technology teams being responsible for web development.

In a similar guise, AI’s introduction does not also necessarily change the nature of change and transformation programmes. The same principles of change management still apply, no matter which technology is being implemented.

“Is AI actually any different to any other application in our portfolio, in the way that we should be introducing it and managing the change?” asked one leader in higher education, highlighting the need for strong policies and governance frameworks. 

“I would argue not – we would treat all the other applications in our portfolio exactly the same way.”

IT augmentation will force AI skills evolution

The elevation of IT, and the relationship with business departments, requires a new type of information technology department. The rise of IT automation, and human augmentation, requires new skills and work attitudes.

Attendees spoke of the necessary ‘hard’ and ‘soft’ skills within the IT department - team members needing new competencies on AI and machine learning, but also to shift from purely technical implementation to strategic planning. 

Given recent reports of an erosion of critical thinking, team members also need to show a focus on critical analysis, value creation and – given the rise of agentic tools – increasingly an ability to manage and monitor autonomous machines.

AI is already permeating IT operations in this regard. Senior executives here spoke at length about how AI ‘quick wins’ have come in IT service desk management, to improve ticket automation and experience, and in software development for better testing and coding. Other leaders see the potential of these technologies in shortening software development lifecycles by expediting analysis and standardising business processes for global organisations. More holistically, GenAI and agentic technologies are already supporting ‘end-to-end’ employee and customer experiences across multiple sectors.

Despite this, there remains a level of pragmatism that this AI augmentation is not without risk to IT functions;  wide-scale automation means it’s harder for junior technology staff to become seniors, while there was a more philosophical question on to what extent AI becomes the ultimate authority on decision making. Quality control becomes imperative too, particularly with biased or hallucinating systems.

“Remember that it's a statistical model based on averages. AI gives you a good enough, absolutely average response. What part of your business are you okay with being absolutely average?” asked one leader.

IT reimagined: The challenges and opportunities ahead

Technology executives have a raft of challenges ahead as they evaluate not only how AI impacts their business, but - specifically - their IT departments. Some of the primary challenges which emerged during this session included:

• Managing shadow AI and decentralised technology adoption
• Balancing innovation with risk management
• Developing flexible, adaptive technology strategies in the face of a changing market
• Creating frameworks for responsible AI use

Practical steps to driving IT alignment with the business on AI included:

• Establish AI governance councils
• Develop comprehensive AI training programmes
• Focus on data hygiene; the quality of your structured and unstructured data
• Create secure, experimental AI environments
• Explore consumption-based pricing models to better align AI costs with usage
• Build a culture of continuous learning and innovation

Leading IT 3.0 in an age of AI transformation

To drive their organisation’s AI transformation, executives once again need to reiterate and reinforce the value of IT - that they are there to ‘empower the organisation’ and to help colleagues deliver ‘higher-value’ outputs. IT 3.0 is just the latest wave of technological change.

“It's going to be one of those journeys that we've been through, through the various life cycles as IT departments….where organisations will perhaps only really understand the value of an IT team after time….and after we’ve had some accidents along the way. 

“It’s going to be that voyage of discovery.”