Cisco 2024 AI Readiness Index: AI Readiness Flatlines in Malaysia

Cisco, the worldwide leader in networking and security, has announced findings from the Cisco 2024 AI Readiness Index. The Cisco 2024 AI Readiness Index reveals that only 14% of organisations in Malaysia are fully prepared to deploy and leverage Artificial Intelligence (AI)-powered technologies, from 13% a year ago. This underscores the challenges companies face in adopting, deploying, and fully leveraging AI. Given the rapid market evolution and the significant impact AI is anticipated to have on business operations, this readiness gap is especially critical.

The Cisco 2024 AI Readiness Index is based on a double-blind survey of 3,660 senior business leaders from organisations with 500 or more employees across 14 markets in APJC. These leaders are responsible for AI integration and deployment within their organisations. The Cisco 2024 AI Readiness Index is measured across six pillars: strategy, infrastructure, data, governance, talent, and culture.

Acting with Urgency

Artificial Intelligence has become a cornerstone for business strategy, and there is increasing urgency among companies to adopt and deploy AI technologies. In Malaysia, 98% of companies report an increased urgency to deploy AI in the past year, driven primarily by the CEO and leadership team. Additionally, the Cisco 2024 AI Readiness Index found that companies are committing a significant amount of resources towards AI, with 55% reporting that as much as 10% to 30% of their IT budget is being allocated to AI deployments.

Despite significant AI investments in strategic areas like cybersecurity, IT infrastructure, and data analytics and management, many companies report that returns on these investments are not meeting their expectations.

“As companies accelerate their AI journeys, it’s critical they adopt a comprehensive approach to implementation and connect the dots to link AI ambition with readiness,” said Hana Raja, Managing Director at Cisco Malaysia. “The Cisco 2024 AI Readiness Index reveals that to fully leverage the potential of AI, companies need a modern digital infrastructure capable of meeting evolving power needs and network latency requirements from growing AI workloads. This must be supported with the right visibility to achieve their business objectives.”

Key Findings of the Cisco 2024 AI Readiness Index

• AI Readiness flatlined, with infrastructure identified as a pain point. The largest decline was in infrastructure readiness, with gaps in compute, data centre network performance, and cybersecurity, amongst other areas. Only 29% of organisations have the necessary GPUs they need to meet current and future AI demands and the capabilities to protect data in AI models with end-to-end encryption, security audits, continuous monitoring, and instant threat response.
• Companies are investing, but gains fall short of expectations. Over the past year, AI has been a priority spend for organisations in Malaysia, with 55%allocating 10–30% of their IT budgets to AI projects. AI investments have focused on three strategic areas cybersecurity (54% of companies are at full/advanced deployment), software development (47%), and data management (40%). The top three outcomes they aim to achieve include improving efficiency of systems, processes, operations, and profitability; growing revenue and market share in existing lines of business; and improving risk management and decreasing business risk.
• Despite increased investments, on average almost half of respondents said they have either seen no gains or the gains have fallen short of their expectations, in augmenting, assisting, or automating current processes or operations.
• There is a relentless pressure to succeed.There is mounting pressure and urgency from top leadership to implement AI technologies. Over half (55%) of companies report that the CEO and the leadership team are driving AI deployment, closely followed by board of directors (49%), and middle management (46%). As the clock ticks, businesses in Malaysia are accelerating efforts and increasing investments to overcome barriers and embrace AI-driven transformation. Notably, 39% of organisations plan to allocate more than 40% of their IT budget to AI investments in the next four to five years, a steep climb from 6% of companies who said they are allocating a similar portion of their IT budget to AI currently.

Companies recognise they need to do more to be better prepared to leverage AI effectively. Across Malaysia, the Cisco 2024 AI Readiness Index found that 48% rated improving scalability, flexibility, and manageability of their IT infrastructure as their top priorities, highlighting an awareness of the gaps that must be addressed to improve overall AI readiness.

Addressing Skills and Talent Gaps

Despite unique challenges within each pillar, there is a common theme that has emerged across the board. That theme, according to the Cisco 2024 AI Readiness Index, is the lack of skilled talent. Companies highlighted this as the top challenge across infrastructure, data, and governance underscoring the critical need for skilled professionals to drive AI initiatives.

Anupam Trehan, VP, People and Communities APJC, at Cisco, said: “As the race to adopt AI picks up pace, talent will be a key differentiator for companies. There is already a shortage of skilled talent across various aspects of AI. This means companies will need to invest in their existing talent pool to meet the growing demand. At the same time, it is crucial that all stakeholders—the private and public sectors, educational institutions, and governments—work together to develop local talent so that the entire ecosystem can benefit from the immense potential that AI offers.”