The five key trends that will define the business landscape in 2024

(© Andrii Zastrozhnov - Canva.com)

For those of us in business leadership, the past year has been characterized as the third in a period of uncertainty, headwinds and change. As I’ve heard our Chairman and CEO, Bill McDermott, say, “the world has never moved so fast and will never move so slow again.” We entered a new era of exponential technology – as we’ve seen previously with first mobile and then the internet. And, as uptake of AI continues in 2024, there will be era-defining impacts on how companies adapt to ‘big picture’ problems such as environmental, social and governance (ESG) issues, and the ongoing skills gap. The Federal Minister of Labor and Social Affairs of Germany, Hubertus Heil, recently said that if no action is taken, the country will be short a whopping seven million workers by 2035.

“Digital transformation” is a word that we’ve heard for many years. It became a necessary imperative after 2020 and the transition to working first from home, then anywhere, and now in a hybrid world. In 2024, as we take stock of three years of uncertainty and constant change, I believe we’ll see business transformation become the new norm – where businesses embrace ongoing change as both an IT and cultural reality, while also seeking to organize their systems, policies and priorities for the new human-centric future.

Generative AI will enter the business world

Generative AI (gen AI) has gone from a niche research topic to mainstream awareness, seemingly overnight. This technology that scarcely existed 12 months ago is now understood to have the potential to fundamentally transform businesses and society. By 2026, Gartner predicts that over 80% of enterprises will have used gen AI APIs and models or deployed gen AI applications in production environments, up from less than five percent in early 2023.

In 2024, I expect to see businesses move from talking about gen AI, to trying, testing and learning how to benefit from it. Businesses will begin experimenting with AI, which will be the first step in understanding how best to integrate it. But as budgets tighten amidst continued economic uncertainty, organizations will need guidance and support to rise to the challenge and leverage gen AI’s full potential.

As uses of AI increase, governance and human oversight will be critical to mitigate emerging risks like bias. Vendors must provide robust controls and transparency around AI, including human-in-the-loop reviews and controls, particularly as regulations such as the EU's proposed AI Act come into force. Clear guidelines will be needed as regulatory scrutiny increases. The potential rewards are staggering but customers must be supported through the changing regulatory landscape and maintain customer trust through transparent data security controls.

Companies that are early adopters and carefully implement responsible AI and automation will see enhanced productivity, efficiency, and customer and employee experiences. Those that don’t will fall behind. This move towards deploying generative AI at scale will also be driven by the demands of employees eager to engage with the technology. In ServiceNow's Future of Work survey, almost half of employees in EMEA (48%) say that AI is the biggest opportunity for the future of the workforce. Employees realize that businesses must keep up with the pace of innovation to thrive - and this sets the tone for greater transformation in the year ahead.

Reskilling to build a more adaptable workforce

Where many started 2023 with a string of workforce reductions and layoffs, the fading threat of a recession means that the demand for digitally skilled talent has rapidly risen again. Reskilling employees will become a critical strategy, as companies face an increasingly competitive race – and demand – for talent. With skilled tech workers in short supply, businesses will need to amplify investments in upskilling and reskilling to build capabilities internally, especially around AI. Offering robust training programs and learning opportunities will also be key to attracting and retaining top talent. Companies that invest in their people's growth will gain a long-term competitive advantage. Closing the global skills gap could add $11.5 trillion to global GDP by 2028, according to the World Economic Forum, so reskilling should become a strategic business priority, not just an HR initiative. With the right vision and tools, companies can build workforces with adaptable skillsets ready for whatever the future may hold.

There is also a growing recognition that the education sector needs to rapidly adapt to meet the demands of businesses. ServiceNow's Future of Work research found that 76% of workers across EMEA believe that AI should be a mandatory subject in schools before the age of 18, and 75% believe coding should be part of the curriculum. Almost half of workers feel that they need to retrain to keep up with the rapidly evolving technology environment, and 43% say their formal education did not equip them for the working world. In the immediate future, the onus will be on employers to offer easy-to-use digital touchpoints where employees can upskill themselves to meet the challenges of the future, aided by opportunities for continuous skills development, growth and internal mobility.

Data grows in importance as companies demand speed to return on intelligence

Speaking to customers today, I hear a consistent story: those who rapidly adopted disparate technology solutions over the past few years are now struggling to get the full value of those investments. Rather than several disparate technology stacks, they need help to connect the dots across their internal tools to get more value from them as a whole. 

As companies seek to maximize return on investment and operational efficiency, the importance of high-quality, unified data will move front and center. For business leaders, sound data management is already a top priority to enable intelligent decision-making. In the year ahead, we will see increased focus on technologies that rapidly unlock value from data assets. Reliable, secure and integrated data feeds will become the prerequisite for everything from day-to-day operations to long-term strategic planning. In 2024, the changing regulatory landscape will mandate an increased focus on data, with regulations such as the Digital Operational Resilience Act (DORA) in Europe imposing stringent new requirements.

Just as electricity underpins the operations of the modern world, unified data access will power the next wave of business transformation. Companies that focus on connecting the dots within their data will be best positioned move quickly to realize the value of exponential technologies like AI and automation.

ESG moves back to the top of the agenda 

Two years ago, every conversation I had with the C-Suite started with ESG. That seemed to pause in 2023 as leaders struggled to manage an uncertain economic environment while also focusing on the shiny new opportunity of generative AI. I’m already seeing a shift back to the topic of ESG as we approach COP28 in Egypt. In 2024, ethics and transparency around sustainability initiatives will become pivotal considerations for customers, investors, and buyers. Data-driven insights will separate authentic ESG efforts from mere greenwashing. Beyond external stakeholders, ESG is becoming ingrained in corporate culture, with even frontline workers driving meaningful impact.

With legislation such as the European Sustainability Reporting Standards (ESRSs) mandating new rules for the reporting of environmental information starting in the 2024 financial year, carbon tracking and reporting capabilities will be viewed as more than standard requirements in the year ahead. In this sense, ESG requirements will increasingly drive technology investment decisions in boardrooms and those that get it right will earn market share and win bigger as a result in 2024.

Ultimately, adopting ethical and sustainable practices is no longer optional - it's an imperative for any business that aims to remain viable and competitive. Companies perceived as lagging in ESG will face exclusion from markets and backlash from partners. Organizations need to upskill advisory and supervisory boards to educate, and KPIs need to be clear to measure success and differentiate between “green” and “green-wash.”

Technologies will support growth of new business models and revenue streams

Innovation is always top of mind for any forward-thinking business leader. However, as I said above, the pace of this is faster than ever and isn’t showing signs of slowing down. The accelerating pace of innovation will make it necessary for organizations embrace new business models and revenue streams in the coming year – and the CIO may just sit at the heart of this.

According to the 2023 State of the CIO Report, more than two thirds (68%) of CIOs acknowledge that the creation of new revenue streams is among their job responsibilities. Incumbents will leverage technology to reach customers in novel ways, while agile startups will continue to design disruptive offerings from scratch. With change coming faster than ever, companies will demand faster time-to-value when investing in new solutions.

Collaboration will become key as organizations look to partners with complementary capabilities to jointly develop new products, services – changing the traditional vendor-customer relationship. The companies that openly share knowledge and expertise with their network will be best positioned to thrive amidst the coming wave of technology advancement.

A year of change

The coming wave of technology is set to uproot most aspects of life. It is imperative that businesses anticipate this, and ensure they have the efficiency, scalability, flexibility and agility to be able to navigate the pace of change. Underpinning everything, however, is the need to remain human-centric. Transformation and innovation are critical, but we know that customers also crave that human layer as we hurtle forward in the digital realm. We are living in unprecedented times in many ways, so remembering that communication and human connection are at the heart of relationships, in alignment with technology, will be ServiceNow’s guiding light in 2024.