Indian Companies Embrace AI: Significant Progress and ROI-Driven Results, IBM Study Reveals

Indian Companies are Investing in AI for the Long Term, Intend to Use Open-Source Tools to Drive ROI and Innovation: IBM Study

87% of IT decision-makers surveyed in India reported significant progress in their companies' 2024 AI strategy, with 76% saying they have achieved ROI-driven results Implementing responsible AI practices will be key to scaling as AI governance emerges as top concern for Indian businesses 71% of Indian companies eye Open-Source solutions in 2025 for ROI boost New research commissioned by IBM (NYSE: IBM) found that companies surveyed are investing in AI for the long term, with a growing interest in using open-source tools to drive ROI and innovation going forward. The study of IT decision makers (ITDMs), conducted by Morning Consult and developed in collaboration with Lopez Research, revealed that 87% of Indian respondents report making significant progress in executing their 2024 AI strategy, with 76% already seeing positive ROI from their AI investments. In addition, Indian companies are experimenting with AI to find new uses cases as 89% of those surveyed said that their companies have started more than 10 pilots in 2024. Moving forward, 93% of Indian respondents indicate they will increase their AI investments in 2025, while 71% are planning to leverage open-source ecosystems to optimize their AI implementations. The data also confirms that having the right tools and strategy in place for responsible AI will be key to scaling its implementation in 2025 as governance becomes the top concern for those surveyed from India. Implementing responsible AI practices require a holistic, end-to-end approach that addresses various stages of AI development and deployment that prioritizes explainability, fairness, robustness, transparency and privacy. "India is rapidly embracing AI with a clear focus on driving innovation and ROI. The growing use of open-source AI tools is crucial for improving productivity and financial returns. However, it's clear that this technology needs to be leveraged responsibly if we are to scale its use," said Sandip Patel, Managing Director, IBM India & South Asia. "At IBM, we're committed to empowering businesses with solutions across the full AI stack to capitalize on the AI opportunity, with an approach based on transparency, trust and choice," he added. Study findings for India: Enterprises are ramping up AI investment, but with a greater strategic focus 97% of surveyed Indian organizations are planning to either increase or maintain their investment in AI in 2025. Surveyed Indian companies are focusing on specific areas for allocating their AI investments in 2025, particularly IT operations (83%), software coding (56%) and data quality management (55%). When asked what strategic changes will be made in 2025, surveyed ITDMs identify utilizing open source (71%), managed cloud services (70%), and hiring specialized talent (66%) among the most common ways they plan to optimize their AI investments. Companies face a broad range of challenges as they implement AI, top of which is the need for robust governance highlighting the need for responsible AI. The top 5 barriers are lack of AI governance (53%), lack of AI expertise (51%), technology integration (51%), data management (41%) and failure to deliver business value (39%). Open source is becoming crucial to companies' AI strategies 48% of companies in India said that more than half of the AI solutions they are using are based on open-source. As company size increases, so does the likelihood that the majority of AI solutions are based on open source. Organizations report successfully advancing their AI projects, but often through less traditional ROI metrics 87% of surveyed Indian ITDMs report making progress in executing their AI strategy, while only 1% report no progress. 63% of Indian respondents say their company typically moves from AI pilot to full production within 12 months. 62% of surveyed companies say their AI investments are equally innovation and ROI driven; while 15% said its driven mostly by innovation, and 13% said they are mostly ROI driven. Faster software development (34%), rapid innovation (32%), and productivity time savings (17%) ranked as the three most important metrics Indian ITDMs use to calculate ROI from AI investments. Hard dollar/quantifiable savings was at 11%. More than three-fourth (76%) of surveyed Indian companies say they are achieving positive ROI from their AI projects; 19% say they are breaking even and just 4% say they are recording negative ROI. Among Indian companies not yet achieving positive ROI, 33% expect to begin seeing dollar savings within the next 12 months; 100% believe they will turn a positive ROI within 3 years. To view the full study, visit: https://newsroom.ibm.com/image/IBM_ROI_of_AI_Report-December_2024.pdf Additional quote: "As organizations begin to implement AI at scale, many are placing greater stock in success metrics such as productivity gains, in part because traditional hard-dollar ROI have yet to show up on the balance sheets," said Maribel Lopez of Lopez Research. "Yet, they continue to rapidly advance their AI strategies, with no sign of slowing down. Companies seem to now recognize the value of defining specific use cases and optimizing AI projects. They are leveraging hybrid cloud strategies and open source to drive AI innovation and deliver financial returns." About IBM IBM is a leading provider of global hybrid cloud and AI, and consulting expertise. We help clients in more than 175 countries capitalize on insights from their data, streamline business processes, reduce costs and gain the competitive edge in their industries. More than 4,000 government and corporate entities in critical infrastructure areas such as financial services, telecommunications and healthcare rely on IBM's hybrid cloud platform and Red Hat OpenShift to affect their digital transformations quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting deliver open and flexible options to our clients. All of this is backed by IBM's long-standing commitment to trust, transparency, responsibility, inclusivity and service. Visit www.ibm.com for more information.

Indian Companies Bullish on Long-Term AI Investments; 76% Surveyed Firms Achieved ROI-Driven Results: IBM Study

Among the companies that are yet to achieve ROI-driven results from AI projects, 33% expect to see savings within the next 12 months. A research study commissioned by computing giant IBM revealed on Wednesday that most Indian companies made significant progress in executing their AI strategies last year. The study surveyed over 2,000 IT decision-makers worldwide, 224 of whom were from India. Among the ones surveyed in the country, 87% reported progress in their AI strategy, and 76% revealed that they had achieved results driven by return on investment (ROI). About 89% of the Indian respondents said their companies have started more than 10 AI pilots in the last year. Furthermore, 93% of the Indian respondents said they will increase their AI investments this year. The majority of them reported looking for open-source solutions, and 48% revealed that more than half of the AI solutions being used are based on open-source technologies. Among the companies that are yet to achieve ROI-driven results from AI projects, 33% expect to see savings within the next 12 months, and all of them believe they will achieve a positive ROI within three years. Only 1% of the surveyed Indian respondents revealed that their AI strategy had not made progress. The surveyed Indian companies revealed that they are focusing their AI investments this year on IT operations, software coding, and data quality management. The detailed report from IBM, outlining the findings from multiple countries worldwide, can be found here. Indian Prime Minister Narendra Modi on Tuesday spoke at the AI Action Summit in Paris, where he said that India leads in AI adoption. According to him, India has one of the world's largest AI talent pools. "India is building its own large language model. Considering our diversity, we also have a unique public-private partnership model for pooling resources like computing power," he added. In this year's Budget, the government allocated ₹2,000 crore for the IndiaAI mission - nearly a fifth of the scheme's ₹10,370 crore announced last year. Moreover, AIM recently reported that Indian companies and startups are increasingly using AI-enabled coding tools. Although companies were initially hesitant to adopt such tools, they are now leaning toward them due to their benefits. Furthermore, a recent survey by GitHub revealed that 56% of Indian developers are using AI tools to help them boost their chances for employment owing to the skills they develop. Moreover, around 80% of them believe AI tools have improved code quality.