UK firms lag in cloud & AI adoption, hindering growth

UK businesses are facing challenges in development due to a reluctance to fully integrate cloud-based solutions and artificial intelligence (AI) technologies, according to insights from the 2024 OneAdvanced ninth Annual Trends Report.

The report, which gathers insights from over 6,000 senior executives across UK businesses, indicates a significant gap in the adoption of modern technologies. Findings reveal that only 35% of UK businesses have entirely embraced cloud solutions, while merely 14% are strategically integrating AI across their operations.

This technological inertia is occurring despite 44% of business leaders in the UK identifying increased efficiency and productivity as their main priorities for the upcoming year. The report further highlights that handling both cloud and on-premise systems has increased from 36% last year to 42% this year, suggesting a complicated approach to technology management.

Andrew Henderson, Chief Technology Officer at OneAdvanced, commented on the findings: "Business growth requires the right infrastructure and software services to be in place. It's not at all surprising that so many leaders say that efficiency and productivity are their top priorities, but to find that so few are actively embracing the technology and services that will allow them to grow is quite astonishing."

Henderson further pointed out the issues with cloud adoption: "Cloud solutions are one example of where British businesses are lagging. Only a third of businesses are leveraging a complete cloud approach, and more businesses are juggling both cloud and on-premise this year than last year. This is a complex approach to systems management that prevents businesses from truly realising their growth potential."

The report also elaborates on the challenges facing AI integration, highlighting that 48% of AI projects tend to fail due to poor implementation. Additionally, while 85% of leaders recognise the benefits of effectively implemented AI, a considerable number of businesses either have not tried integrating AI or have not succeeded with their initiatives.

Henderson remarked: "Meanwhile, slow uptake on AI projects – coupled with a high rate of failure – could put British businesses at a disadvantage on the global stage. Many businesses are currently implementing AI for fear of missing out rather than to address customer needs. Artificial intelligence has amazing potential to solve productivity concerns and elevate customer experience innovation, but without the proper adoption of cloud solutions and a lack of availability of reliable data, businesses will continue to find it hard to realise the full potential of AI tech."

He further advised businesses to act proactively: "This is not a time for sitting back. If businesses are not moving, they are losing ground. They should experiment and then make practical investments in the technology, where aligned to clear customer outcomes. This will enable their growth plans to become a reality, boost the country's knowledge and skills in this emerging area while supercharging the economy, cementing our place on the global business stage," he added.

Furthermore, the report finds that 15% of business leaders are either unsure or lack confidence in the ability of their current technology infrastructure to support their growth goals. However, 66% acknowledge having plans to update their digital systems.

Julian David, Chief Executive Officer of techUK, warned about the risks of underinvestment: "Investing in digital transformation cannot be optional for British business success. Technology can drive growth and support key objectives such as cybersecurity and sustainability, so business leaders will be looking to their CTOs to guide them to the right choices."

David further stated, "It is concerning that so many businesses are struggling to modernise their technology solutions and update legacy systems. Underinvestment in this area is holding back UK economic growth. Leaders in all sectors must grasp the opportunity to accelerate digital transformation and empower their employees with agile data-driven tools that can boost productivity and help their organisations thrive."