Cisco AI Readiness Index Hype Meets Reality Executive Summary3Benchmarking Readiness for AI Adoption and Integration5Strategy6Infrastructure8Data11Governance13Talent16Culture18Size and Industry Related Insights20Recommendations22About the Research24 Executive Summary Artificial Intelligence (AI) has been the dominanttheme of the business world over the pastcouple of years. It’s increasingly in strategyupdates, earnings statements, and in almostevery stakeholder communication. At itscurrent level of mass scale impact, AI may wellovertake the cloud and even the internet in itssignificance as a technology disruptor. (moderately prepared),Followers, (limited preparedness),andLaggards(unprepared). The Index highlights thatorganizations globally have seen a decline across multipleareas of AI Readiness. This means that despite the focusand investment, business leaders do not feel they havemade enough progress towards their AI ambitions. This is not deterring them, as leaders say they will not onlycontinue to invest in AI, but actually increase their spend.The Index reveals that the C-suite is the biggest driver of AIadoption, with 50% of companies citing pressure from theCEO and their leadership team. However, enthusiasm aroundthe transformative power of AI has faded at the senior level.Only 66% of respondents report that their organizations’boards are receptive and 75% say their leadership teams arereceptive, down from 82% for both last year. However, as companies learn more about AI and howto adopt, deploy, and fully use its capabilities, they arebeginning to realize they may not be as prepared as theythought. TheCisco 2024 AI Readiness Index, which followsthe 2023 inaugural Index, measures AI readiness ofcompanies across six key pillars:Strategy,Infrastructure,Data,Governance,Talent, andCulture. Based ontheir readiness score, companies are categorized intofour levels:Pacesetters(fully prepared),Chasers Less than one in seven companies globally are ranked asPacesetters, a decline from last year’s Index. We have alsoseen fewer companies make it to Chasers, the next categoryof preparedness. Individual pillars including Infrastructure,Data, Governance, Talent, and Culture, each saw declines. Companies allocate a significant amount of money towardsAI, with 50% of those surveyed saying as much as 10-30%of their current IT budget is dedicated to AI. Interestingly,a large number of respondents in our survey noted thattheir AI investments have not yet delivered the gainsthey expected. Nearly 50% of respondents reported notseeing any gains or gains below expectations in areassuch as assisting, augmenting, or automating a process oroperation. The results highlight that while companies arekeen to adopt and deploy AI, the ability and readiness tofully leverage it remains limited. The lack of visible resultsmay also be due to organizations not having the rightprocesses in place to accurately measure the impact ofAI, with just over a third (38%) of respondents saying theyhave clearly defined metrics to do so. Some of the other key findings of the Index are: •TheStrategypillar has the highest number ofPacesetters of any of the pillars for the secondconsecutive year. TheCulturepillar continues to have thelowest percentage of Pacesetters and even saw its shareof lowest-ranking readiness tick up by four points.•93% of respondents predict that AI will increaseinfrastructureworkloads as AI technologies aredeployed. •Less than a third (32%) of respondents report highreadiness from adataperspective to adapt, deploy, andfully leverage AI technologies. •Governancereadiness fell this year, potentially due tothe quickly-evolving global regulatory landscape aroundAI. Only one in three respondents (35%) believe there isa high level of understanding across their organizationabout global data privacy standards. Encouragingly, companies recognize they need to do moreto be better prepared to leverage AI. For example, 51% ofthose surveyed have rated improving scalability, flexibility,and manageability of their IT infrastructure as amongtheir top three priorities as they look to improve overall AIreadiness. •TheTalentpillar reveals that close to half (48%) ofrespondents say their organization is only moderatelywell-resourced with the right level of in-house talent tomanage successful AI deployment. The Index is based on a double-blind survey of 7,985senior business leaders with responsibilities for AIintegration and deployment at organizations with 500or more employees. A more detailed explanation of thebenchmarking methodology is contained in later sectionsof this report. However, businesses face significant challenges on theroad to improving their readiness. These include: lack oftalent with the right skills, concerns over cybersecurityrisks posed by AI workloads, long lead times to procurerequired technology, data silos, and data spread acrossmultiple geographical jurisdictions. Overall, this year’s research finds that orga