UK firms slow to adopt cloud and AI, risking growth

New data indicates that UK businesses are hesitant in fully adopting cloud and AI technologies, which may impede their development.

A report by OneAdvanced, based on insights from over 6,000 senior UK executives, found that only 35% of UK businesses fully utilise cloud-based solutions, while less than 20% are strategically incorporating artificial intelligence (AI) into their operations. This reluctance to adjust to new technologies comes despite 44% of UK leaders prioritising efficiency and productivity for the upcoming year.

The 2024 OneAdvanced ninth Annual Trends Report underscores the technological challenges faced by British business leaders as they strive for growth. The study, conducted in September 2024, also pointed out that 42% of businesses are currently using a mix of cloud and on-premise solutions, an increase from 36% in the previous year.

Moreover, while 85% of business leaders acknowledge the benefits of successfully implemented AI solutions, nearly half (48%) have not attempted AI integration, and a significant portion of those who have faced project failures.

Julian David, CEO of techUK, emphasised the importance of digital transformation, stating, "Investing in digital transformation cannot be optional for British business success. Technology can drive growth and support key objectives such as cybersecurity and sustainability, so business leaders will be looking to their CTOs to guide them to the right choices."

He further noted, "It is concerning that so many businesses are struggling to modernise their technology solutions and update legacy systems. Underinvestment in this area is holding back UK economic growth. Leaders in all sectors must grasp the opportunity to accelerate digital transformation and empower their employees with agile data-driven tools that can boost productivity and help their organisations thrive."

Andrew Henderson, CTO at OneAdvanced, remarked on the significance of having the right technological framework for business expansion. "Business growth requires the right infrastructure and software services to be in place. It's not at all surprising that so many leaders say that efficiency and productivity are their top priorities, but to find that so few are actively embracing the technology and services that will allow them to grow is quite astonishing," he stated.

He added, "Cloud solutions are one example of where British businesses are lagging. Only a third of businesses are leveraging a complete cloud approach, and more businesses are juggling both cloud and on-premise this year than last year. This is a complex approach to systems management that prevents businesses from truly realising their growth potential."

Henderson also commented on the slow uptake and high failure rate of AI projects, warning of potential competitive disadvantages. "Many businesses are currently implementing AI for fear of missing out rather than to address customer needs. Artificial intelligence has amazing potential to solve productivity concerns and elevate customer experience innovation, but without the proper adoption of cloud solutions and a lack of availability of reliable data, businesses will continue to find it hard to realise the full potential of AI tech," he explained.

He stressed the urgency of technological adaptation, saying, "This is not a time for sitting back. If businesses are not moving, they are losing ground. They should experiment and then make practical investments in the technology, where aligned to clear customer outcomes. This will enable their growth plans to become a reality, boost the country's knowledge and skills in this emerging area while supercharging the economy, cementing our place on the global business stage."

The report also highlighted that 15% of business leaders are unsure or lack confidence in their current technology infrastructure's capability to support growth ambitions. However, 66% of leaders indicated they have plans to update their digital systems.