72% Of Organisations Plan To Use Generative AI In Software Engineering: Capgemini

Organisations expect their software-based revenue to grow to 29% by 2030.

<div class="paragraphs"><p>(Source: Unsplash)</p></div>
(Source: Unsplash)

Software is set to lead businesses in the future and will make a significant contribution to revenue by 2030, according to a report by Capgemini Research Institute.

Organisations expect their software-based revenue to grow to 29% by 2030, up from 7% in 2022; and 72% of businesses plan to use generative artificial intelligence to assist with software engineering in the next year.

Software and software-enabled technologies—including cloud, Internet of Things, high performance networks (including 5G) and AI/machine learning—are accelerating innovation and research and development for products and services across industries. This is resulting in the creation of personalised customer experiences, new revenue streams and business models, and reduction in costs, the report showed.

Organisations are transitioning from traditional hardware-centric business to software companies. Findings indicate that a quarter of businesses already identify as software companies, and an additional 32% anticipate transitioning to software company status within the next 3‒5 years.

“We have entered a new era of software-led business. Leaders must view software as a key strategic asset, which can unlock a myriad of benefits and establish competitive differentiation,” said William Rozé, chief executive officer of Capgemini Engineering.

Nearly 60% of organisations agree that software-driven transformation is a boardroom topic, with the majority recognising it as a strategic capability to stay ahead of competition, transform business models and unlock new value for customers.

Successful software-driven transformation is expected to deliver financial gains for businesses across industries by 2030, the report suggested. The telecom sector leads this trend with a predicted revenue increase of 39%, followed by automotive, and banking and insurance (32% for each) and life sciences (31%).

One-Fifth Of R&D Budgets Invested In Software-Driven Initiatives

According to the report, nearly 18% of R&D budgets are being spent on software-driven initiatives. Additionally, 60% of organisations are planning to increase their investments in software initiatives by 9% over the next two years. Of this investment, over one third is focused on product or services engineering.

Generative AI Key Co-Pilot In Software-Led Transformation

Organisations are turning to technologies like generative AI to assist engineers and accelerate the delivery of the software code. Over the next three years, the report projects that generative AI tools will increase the time saved for software engineering from 15% to 43%.

Seven out of 10 organisations plan to employ generative AI to enhance and supplement existing software engineering over the next year, anticipating that these tools will help write 37% of the code in the next three years. Only 28% of organisations stated they don’t intend to use generative AI to aid software engineering in the next 12 months.

Challenges In Software-Led Transformation

Of the organisations surveyed, 68% remain at early experimentation stages of software-driven transformation. Only 29% have started to scale and utilise software to drive transformation, while just 5% have implemented fully scaled initiatives.

To realise the full potential of software, businesses will need to ensure interoperability and flexibility across platforms. However, less than half (48%) have a highly scalable architecture, and 40% of organisational software investment currently focuses on maintaining legacy products.

Talent Key To Realising Success

The report suggests that fostering talent is important to realising software-driven success. While organisations expect 39% of employees to work on software solutions in the next three years, critical skills are in short supply. This is notable in areas such as cybersecurity and compliance (61%), AI, ML and deep learning (60% each), and data and cloud (57%).

“To achieve software excellence and the gains that it has to offer, organisations will need to think holistically: from striking up strategic partnerships where necessary to defining a clear transformational roadmap to ensure the architecture that underpins it is robust, sustainable and scalable. Generative AI poses significant potential here,” Rozé said.

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