Grit Young outlines 10 key strategies to help Ireland’s tech firms unlock real value from their investments in artificial intelligence
Artificial intelligence (AI) deployments in technology companies often fall short of expectations due to a lack of preparedness for the level of change and costs involved.
To succeed, tech companies must shift their focus from merely integrating AI into traditional business processes to fundamentally rethinking and reinventing their operations for an AI-first era.
To help ensure success, companies in Ireland should seize the opportunity to explore 10 key areas that can drive AI value creation.
1. Turn potential into performance improvement
Tolerance for low returns on AI spend has reached a breaking point as organisations across all sectors seek tangible yields from their investment in the technology.
Tech companies need to establish clear frameworks to measure the operational and financial impact of any AI solutions they implement.
This will help to demonstrate quantifiable business value and return on investment, thereby differentiating their offering in an increasingly crowded market.
2. Drive growth through an agentic AI future
Agentic AI can execute complex tasks independently, potentially transforming how tech companies and their customers operate their businesses.
Tech companies must capitalise on the opportunities presented by agentic AI to secure an early mover advantage for themselves and their customers.
The emergence of AI agents that can enhance an organisation’s workforce could provide a viable solution for Irish companies seeking to avoid relocating their headquarters to overseas locations, such as to the US, to attract a broader talent pool, as has occurred in the past.
Consequently, these agents could enable Irish organisations to scale operations in Ireland, ultimately benefiting the domestic economy.
3. Adopt outcome-based pricing models
Pricing needs to move from a purely software-as-a-service (SaaS) subscription model to an outcome-based model aligned with customer value expectations.
Customers increasingly expect tangible results from the products they purchase. Simply providing access or usage will no longer be sufficient to justify a charge; a clear outcome will be required.
The move to outcome-based pricing will not be easy. Demonstrating outcomes and communicating them to customers will require a major shift in current practices.
However, tech companies will likely have no choice but to do this, given changing customer demand.
4. Tap into the power of the AI-first operating model
The competitive advantage enjoyed by born-digital tech companies over legacy organisations is now being outstripped by AI-born companies and their distinct structures and operating cultures.
Simply bolting AI onto an existing operating model will not be sufficient to bridge this competitive gap.
Organisations will need to rethink and reimagine their structures and operating models to become more like this new wave of competitors.
5. Unlock the value of AI expertise
Tech companies have an opportunity to position themselves as key partners in their customers’ AI transformation journeys by offering tailored solutions addressing both the infrastructural and operational aspects of AI adoption.
Customers will increasingly ask for AI offerings that do not require the costly replacement of legacy IT infrastructure and architecture. This presents an opportunity for tech companies that can provide such solutions.
6. Develop new skill sets for the AI era
Tech companies can help drive growth by equipping their workforce with future-ready skills through targeted training programmes.
By embracing more immersive training and learning environments, such as virtual and augmented reality, tech companies can better assess skill gaps, provide on-the-job support and ensure employee capabilities are fit for purpose.
Today’s employees are increasingly demanding continuous learning in and through the use of emerging technologies. Embedding generative AI in learning and development programmes will help meet these expectations.
7. Involve all business functions from the outset
Changes in tax, trade and regulatory requirements should be anticipated and addressed up front.
In a rapidly shifting global tax and regulatory environment, treating tax or local regulatory issues as an afterthought—particularly when pursuing a transaction or making an AI-driven change to your operating model—is fraught with risk.
Finance, tax and legal professionals should be involved in the process from the outset, so that decisions can be made without the risk of giving rise to unforeseen financial, tax or legal liabilities.
8. Use AI to bolster cyber defences
The EY 2024 Global Cybersecurity Leadership Insights Study found that AI delivered a 40 percent increase in cybersecurity teams' efficiency.
The technology offers more effective and comprehensive cybersecurity through the automation of threat and vulnerability detection and response. The built-in learning and adaptation capabilities of AI can help organisations stay ahead of the next major threat.
The same tools are available to bad actors, who can use AI to amplify their ability to identify vulnerabilities and penetrate systems by an order of magnitude.
Thus, it is all the more important for organisations to meet heightened cyber threats by using AI to strengthen defences and maximise incident response when breaches do occur.
While there are many good cyber education programmes in Ireland, widespread adoption of AI as a cyber defence tool remains rare.
The Irish government is actively promoting cyber security programmes and Enterprise Ireland provides grants to client companies to help bolster their cyber defences.
9. Explore ways to free up capital for AI investment
While investment in AI capabilities is driving higher valuations for many tech companies, the cost of such investments is placing many of the companies concerned under strain.
The capital-intensive nature of AI investment may require tech companies to consider the divestiture of non-core operational elements and underperforming assets.
Such sales can provide a fresh source of capital for AI investment and create more streamlined and profitable businesses.
The big technology companies constituting the foundation of Ireland’s foreign direct investment landscape have historically expanded through acquisition rather than divestiture.
If these companies consider divesting, it could impact their operations in Ireland.
How any new buyer decides to manage the business will depend on their overall strategy, which could prompt them to keep, expand or scale back their presence in Ireland.
10. Engage with regulators
The European Union’s AI Act, Digital Services Act, and General Data Protection Regulation are just a few examples of the regulations governing tech companies in Europe.
Governments around the world are also developing policies and regulations on topics that affect tech companies.
Regardless of size, tech companies can seek to influence the regulatory direction of travel by collaborating with industry groups and national government agencies.
The aim should be to seek a more harmonised global regulatory environment which supports innovation while protecting citizens and addressing societal concerns.
Grit Young is Technology, Media and Entertainment and Telecommunications Industry Leader at EY Ireland
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