After one month, we are refining our 2023 outlook for Automation and Artificial Intelligence. We see three macro-economic themes influencing the buyers and sellers of Automation and AI software and services in 2023. The most successful companies are continuing to adapt new AI capabilities with a focus on delivering business outcomes. We see more teaming, and a higher level of business engagement through all sales phases. This impacts both buyers and sellers of AI software. Below are key drivers of change that will continue to shape the AI market in 2023.
Economic and geopolitical uncertainty will continue to create challenges for mid to long term business planning and strategy. While the end of the pandemic is improving stability in some sectors, rising interest rates, continued supply chain challenges, the strong US dollar, inflation, and the threat of recession are causing many companies to hedge their big bets. We hear consistently that companies need to be ready and able to respond to change quickly. The strong likelihood of continued economic and political instability means that business agility is top of mind for most senior business leaders. This focus on agility means AI projects with fast time to value, and projects that are adaptive will be the most sought after solutions.
Something changed in the workforce zeitgeist in 2022, and part of that change led to the great resignation. Many workers started to question their work, their working habits, and their purpose. As companies continued to grapple with how to best manage a hybrid workforce, most companies experienced high turnover rates – especially in entry level and lower level positions. In response, many employees are elevating the importance of lifestyle, DEI, and purpose as they weigh employment options. While hiring will slow in 2023, addressing employee engagement and the talent challenge will continue to be an important business leadership priority. In fact this is a top 3 Board focus area for 80% of boards in Q4 22.
The accelerating rate of change fueled by technology will continue to disrupt more businesses more quickly. The adoption of artificial intelligence will become table stakes for the companies that thrive and grow in 2023 and beyond. Over the past decade, many business and technology leaders had great hope for the potential of AI. Many early programs including Intelligent Automation (IA) programs failed to deliver the promised outcomes. In spite of early challenges, over 90% of leaders believe AI is critical, and demonstrating AI success is a top priority. A rapidly emerging trend for 2023 is more business-led initiatives that can be deployed quickly. This trend will change both buying and selling motions over the next 12 months.
When selling (internally or externally), presenting your software or project on the merits of ROI is not enough. Attaching to the highest value drivers makes your project a higher priority because your project is impacting what mattes most. These key drivers of change will continue to shape this market in 2023.
