IT spending has become an integral part of business operations, encompassing hardware, software, maintenance, cloud services and other critical IT infrastructure elements. However, with the growing complexity and expanding scope of IT, it becomes increasingly challenging for leaders to gain insights into IT spending patterns.
While IT spending transparency serves as a crucial foundation for effective IT governance, data's potential extends far beyond financial analysis. As CEOs rethink business models, job roles and workflows to capitalise on the full potential of generative AI (Gen AI), they must carefully consider the broader IT cost implications – and not all of them are obvious.
Investment in Gen AI often requires a fundamental shift in how an organisation operates, which can lead to changes in IT infrastructure, data management and even the need for new skills and expertise.
A commitment towards leveraging AI and Gen AI
We spoke with Mohamad Ali, an experienced technology executive with a deep understanding of AI and a proven track record of success in the software and hardware industries. Ali recently rejoined IBM Consulting as the company’s Chief Operating Officer. His appointment highlights IBM's commitment to leveraging AI and Gen AI to transform the consulting market and deliver game-changing solutions for clients.
“In my early career, I was here at IBM. After college, I was one of a small number of people who started a company called Neural Applications Corporation back in the early nineties. Then that company was sold and I joined IBM and have now been here for 14 years.”
In the first half of his career at IBM, Ali worked in the hardware business before going back to technology and the software business. During this time, he met Arvind Krishna, who is now IBM's CEO, and together they built out the AI business within IBM for four years.
Joining IBM Consulting, Ali recognised the immense potential of AI to revolutionise the consulting industry. And now, as the leader of the cybersecurity and delivery organisation, he is spearheading efforts to integrate AI and Gen AI into IBM's consulting services, enabling them to provide clients with unprecedented levels of expertise, efficiency and innovation.
“It's a great time to join the business,” says Ali. “Last quarter, the IBM Consulting business signing grew 32%. A quarter before that it grew by 24%, and this is while we're watching our competitors start to decline. So on a revenue basis last quarter, we are the fastest growing large consulting business out there. It's a great time to be here.”
Hybrid cloud computing is a compelling choice
When it comes to the cloud space, a hybrid cloud architecture will seamlessly integrate the strengths of both environments. It will enable organisations to leverage the cost-effectiveness, security and control of on-premises resources while tapping into the elasticity, scalability and innovation of public cloud platforms.
“When Arvind [CEO of IBM] took over, it really crystallised IBM and IBM Consulting’s strategy which is around hybrid cloud and AI,” says Ali. “For IBM Consulting, these are two underpinning themes for all the services that we provide, whether we're doing an SAP transformation or a customer service/experience transformation where it's all about the user experience.”
IBM has strong ties with Microsoft Azure, Amazon Web Services (AWS) and Google Cloud, all of which leverage a hybrid cloud approach. This hybrid approach is crucial as the enterprise landscape is largely hybrid today and will remain so in the future.
“On the AI side, we're also taking a hybrid approach,” explains Ali. “There are a lot of foundation models out there, so for us, we focus on the client and the best technology that could meet their needs.
“What we've been doing for the last year or so since the Gen AI craze took off has been to start a set of pilots to help our clients develop Gen AI solutions in areas such as customer service, HR and code development, that utilise some of these foundation models.”
Implementing governance to ensure security
Adopting a hybrid approach in AI means the insertion of a crucial layer for governance in terms of AI capabilities, data usage and consumption tracking. “There is a set of tooling that few others have concerned themselves with, which has to do with things like governance,” says Ali. “IBM’s platform, called watsonx, serves as a platform for this.”
Ali explains how IBM has implemented a governance layer along with additional service layers, to ensure that the consumption of foundation models by Gen AI bots, digital workers, or similar entities is conducted in a controlled and secure manner. The discussed layer is responsible for managing and tracking the consumption of AI resources, such as GPUs, to ensure that organisations are not overspending.
“That layer is essential,” says Ali. “Not only is it for governance in terms of what the AI can and can’t do, as well as where the data comes from and what the data is going to be used for, but also how much of this AI you're going to consume.
“For both general and hybrid cloud, people realised how much they were spending. What then happened was a ‘FinOps’ category came into existence, just to measure how much was being spent. It will be similar for Gen AI because it’s an even more expensive resource. Therefore tracking token consumption should be done very early on.”
Using the power of AI for an innovative future
IBM has also been internally testing and deploying AI tools, particularly in HR and customer service, to streamline processes and improve efficiency. One example is the company’s internal HR chatbot, Ask HR, which can answer various questions and help employees book vacations or manage transfers. However, it is to be used as a tool, not a technology to replace people.
Ali explains: “In 2022, using some very similar technology that has now evolved, we were able to process 80,000 job transfers which saved managers 75% of their time. AI allows people to do higher-quality work faster, enabling them to work on more interesting things and solve more interesting problems.
“Each time there's a transition in technology, you have this question of replacing people. Yet each time we've been able to leverage the technology to improve the value that we bring to society. And hopefully, we can do that again this time.”
When looking to the future, Ali says: “I’m very excited for the future of IBM Consulting, I would not have come back here if I wasn't! The timing, as I mentioned earlier, couldn't be better. We have the wind at our back. The signings have been incredibly strong and the market is entering a space that IBM has been strong at for years, which is AI.
“Although AI can be very opaque by definition, we need to go out of our way to make sure it's open and transparent; to be responsible using some of this governance technology. I think it is going to be essential for people to have trust and adopt AI to make it a productive tool for society.”
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