Collateral damage along the road to AI adoption: New research reveals significant increase in customer-facing incidents in mad dash to deployment

by | Feb 14, 2024 | Public Relations

As companies around the world raced to get Generative AI deployed across their operations last year, many wondered what the consequences might be to a largely uninformed and unprepared saturation of AI use. New research from digital operations management firm PagerDuty uncovers a significant increase in the number of tech and data incidents that directly involved customers in 2023—which raises the question: Is this just the tip of the iceberg?

The firm’s 2024 State of Digital Operations study examines the concerns and priorities of enterprise and upper mid-market decision makers for the year ahead. Drawing insights from a survey of 350 business and technical leaders across numerous industries, the study reveals critical initiatives, budgets strategies and risks businesses face driving operational transformation at scale.

Among the key findings was a 13 percent year-over-year increase in customer-facing incidents, reflecting rising levels of complexity and risk as businesses continue to push ahead in their operational transformations. Enterprise companies saw sharper increases (16 percent) on a higher base of incidents vs. mid-market companies (8 percent).

AI customer-facing incidents

But businesses appear to be turning attention to this situation, at least from this point onward. With mandates to achieve top line growth while improving efficiency in an uncertain macroeconomic landscape, the majority of leaders expect to expand IT operations budgets with a focus on mitigating risk, increasing revenue and improving resilience. Cloud and security infrastructure remain top priorities given their foundational role in businesses’ digital health.

Key survey findings:

  • 77 percent of leaders plan to expand investment in cloud services, and 76 percent intend to increase spend on cloud storage.
  • 45 percent of respondents ranked security and reducing risk among their top three business imperatives, with 29 percent naming this the number one priority and 73 percent expecting to increase security budgets.
  • More than half of respondents say their 2024 IT operations budgets will be higher than they were last year, while just 16 percent expect budgets to decrease.

Despite a significant disconnect between business and technical leaders’ outlook on adoption of innovation––81 percent of technical decision makers report teams are using automation more effectively than they were 12 months ago vs. 47 percent of business decision makers––they remain aligned on pushing forward to operationalize investments in AI in 2024.

AI customer-facing incidents

Across participants, 71 percent are growing budgets for AI and machine learning, and 76 percent are pursuing automation of IT or business operations workflows. This accelerated rate of AI adoption has potential to both increase efficiency and add strain to already stretched IT infrastructure, underscoring the importance of foundational safeguards to manage unplanned incidents.

Leaders also indicated plans to operationalize investments in artificial intelligence in 2024, with 71 percent looking to grow budgets for AI and machine learning, and 76 percent pursuing automation of IT or business operations workflows. The accelerated rate of generative AI adoption has potential to add strain to already stretched IT infrastructure, underscoring the importance of safeguards to manage unplanned incidents.

AI customer-facing incidents

“The priorities are clear for leaders across industries: risk, revenue and resilience,” said Katherine Calvert, chief marketing officer at PagerDuty, in a news release. “With the continued mandate to drive growth and efficiency, we believe 2024 will be the year of operational transformation using AI and automation.”

Download the full report here.

Richard Carufel
Richard Carufel is editor of Bulldog Reporter and the Daily ’Dog, one of the web’s leading sources of PR and marketing communications news and opinions. He has been reporting on the PR and communications industry for over 17 years, and has interviewed hundreds of journalists and PR industry leaders. Reach him at richard.carufel@bulldogreporter.com; @BulldogReporter


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