Lack of Governance, Infrastructure Readiness, and IT Talent Leading to Enterprise GenAI Struggles: New Report

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Jul 09, 2024, 08:59 ET

Nearly all organizations surveyed view GenAI as a top 5 priority, but just 44% have comprehensive governance policies in place

Organizations cite security, infrastructure, and data management as top barriers to adoption

SANTA CLARA, Calif., July 9, 2024 /PRNewswire/ -- Despite growing interest and enthusiasm for Generative AI (GenAI), significant challenges are emerging that threaten the success of GenAI projects, according to a co-sponsored research report from Enterprise Strategy Group (ESG) and Hitachi Vantara, the data storage, infrastructure, and hybrid cloud management subsidiary of Hitachi, Ltd. (TSE: 6501). Surveying 800 IT and business leaders across the United States, Canada, and Western Europe, the report explores the critical role of data infrastructure for enterprise GenAI and the associated decisions underpinning successful implementation, finding that 97% of organizations with GenAI in flight view it as a top-five priority, with U.S. companies 35% more likely to say it was the top priority compared to European respondents.

For more information on report findings, visit: https://www.hitachivantara.com/en-us/featured/enterprise-infrastructure-genai

Additionally, nearly two-thirds (63%) say that they have already identified at least one use case for GenAI. Despite the increasing pursuit of GenAI implementation, however, several factors pose serious risks for businesses:

Less than half (44%) of organizations have well-defined and comprehensive policies regarding GenAI.
Only slightly more than one-third (37%) believe their infrastructure and data ecosystem is well-prepared for implementing GenAI solutions; however, C-level executives were 1.3 times more likely to indicate that their infrastructure and data ecosystem is highly prepared, highlighting a notable disconnect.
61% of respondents agreed most users don't know how to capitalize on GenAI, with 51% reporting a lack of skilled employees with GenAI knowledge.
40% of respondents agreed they are not well-informed regarding planning and execution of GenAI projects.

"Enterprises are clearly jumping on the GenAI bandwagon, which is not surprising, but it's also clear that the foundation for successful GenAI is not yet fully built to fit the purpose and its full potential cannot be realized," said Ayman Abouelwafa, chief technology officer at Hitachi Vantara. "Unlocking the true power of GenAI, however, requires a strong foundation with a robust and secure infrastructure that can handle the demands of this powerful technology."

Building the Foundation for Enterprise GenAI
Data shows that organizations are actively seeking out lower-cost infrastructure options, but privacy and latency are also top factors in consideration. 71% of respondents agreed that their infrastructure needed to be modernized before pursuing GenAI projects - an overwhelming 96% of survey respondents prefer non-proprietary models, 86% will leverage Retrieval-Augmented Generation (RAG) and 78% cite some mix of on-premises and public cloud for building and using GenAI solutions. Over the long term, however, organizations expect the use of proprietary models to increase – six-fold according to the survey – as businesses gain expertise and seek to achieve competitive differentiation.

"The need for improved accuracy shows organizations prioritizing the most relevant and recent data gets incorporated into a Large Language Model, followed by the desire to keep pace with technology, regulations and shifting data patterns," said Mike Leone, principal analyst at Enterprise Strategy Group. "Managing data with the right infrastructure will not only enable greater levels of accuracy, but also improve reliability as data and business conditions evolve."

Drivers and Barriers to Adoption
The report found that several areas are driving companies to GenAI, as well as giving them pause. In terms of what's driving enterprise investment in GenAI, the most cited use cases centered around process automation and optimization (37%), predictive analytics (36%), and fraud detection (35%). It's therefore no surprise that improving operational efficiency was the area most cited for where businesses are seeing results; however, less than half (43%) have realized benefits up to this point.

When it comes to some of the top concerns and challenges being faced, more than four in five (81%) of respondents agreed on concern around ensuring data privacy and compliance when building and using applications that leverage GenAI, while 77% agreed that data quality issues needed to be addressed before accepting the results of GenAI outputs.

Hitachi Vantara is actively building AI solutions to meet modern enterprise needs. The company recently introduced Hitachi iQ, it's industry-optimized solution suite for AI workloads that goes beyond basic integration and testing by layering industry specific capabilities on top of the AI solution stack, making it more relevant to an organization's business. Complimenting Hitachi iQ, Hitachi's Center for Excellence (COE) for generative AI supports customers on their accelerated journeys, while helping to control risks so that customers can fast-track their paths to become today's AI leaders, and tomorrow's market leaders.

For more information on Hitachi Vantara's expertise in AI, please visit: https://www.hitachivantara.com/en-us/solutions/ai-analytics.

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About Hitachi Vantara
Hitachi Vantara is transforming the way data fuels innovation. A wholly owned subsidiary of Hitachi Ltd., Hitachi Vantara provides the data foundation the world's leading innovators rely on. Through data storage, infrastructure systems, cloud management and digital expertise, the company helps customers build the foundation for sustainable business growth. To learn more, visit www.hitachivantara.com.

About Hitachi, Ltd.
Hitachi drives Social Innovation Business, creating a sustainable society through the use of data and technology. We solve customers' and society's challenges with Lumada solutions leveraging IT, OT (Operational Technology) and products. Hitachi operates under the 3 business sectors of "Digital Systems & Services" – supporting our customers' digital transformation; "Green Energy & Mobility" – contributing to a decarbonized society through energy and railway systems, and "Connective Industries" – connecting products through digital technology to provide solutions in various industries. Driven by Digital, Green, and Innovation, we aim for growth through co-creation with our customers. The company's revenues as 3 sectors for fiscal year 2023 (ended March 31, 2024) totaled 8,564.3 billion yen, with 573 consolidated subsidiaries and approximately 270,000 employees worldwide. For more information on Hitachi, please visit the company's website at https://www.hitachi.com.

HITACHI is a trademark or registered trademark of Hitachi, Ltd. All other trademarks, service marks, and company names are properties of their respective owners.

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