RESTON, Va.–(BUSINESS WIRE)–A new study from Modus Create reveals significant insights into how business leaders are adapting product development teams to incorporate artificial intelligence (AI) more effectively. Conducted in partnership with research firm Ascend2, the study surveyed over 500 leaders across Europe and the United States to shed light on evolving strategies in the AI landscape and the internal challenges faced by organizations.
Among the key findings, the report indicates that while a substantial 84% of companies claim to have integrated AI into their processes, the actual application remains limited. Specifically, only 28% utilize AI for prototyping, and 38% for coding. This disparity highlights a gap between aspiration and execution in AI integration.
Sharon Lynch, Chief Executive Officer at Modus Create, stated, “Teams have figured out how to move fast. But they need to understand how that speed connects to business value. Boards and investors aren’t asking how many releases you did this quarter — they’re asking what it delivered.” This sentiment underscores the pressure on development teams to demonstrate real returns on investment (ROI), with 90% of leaders acknowledging that the urgency to prove ROI has intensified.
The study also identifies cloud migration as a pivotal strategy for modernization, with 95% of respondents confirming their organizations are working on transitioning legacy systems to cloud-based infrastructures. This shift is a critical enabler for leveraging AI technologies effectively, facilitating improved operational efficiencies.
However, governance issues are proving to be a significant barrier to AI rollouts. More than three-fourths (76%) of organizations reported that regulatory and ethical concerns are hampering their AI initiatives. While many companies have implemented basic monitoring and governance measures, few have established advanced frameworks that include model risk assessments or formal ethics oversight.
As organizations adapt to these challenges, the structure of product teams is evolving. The study found that 91% of organizations have restructured their product functions, although not necessarily in the ways commonly reported in the media. The majority of companies are focusing on reskilling existing developers (53%) and hiring machine learning engineers or data scientists (43%), with only 30% reducing traditional software engineering roles. This suggests a strategic pivot towards enhancing existing teams rather than a wholesale replacement of personnel.
The need for external expertise is also becoming increasingly evident. Around 60% of product teams indicated that finding the right partnerships is critical for their progress, a notable increase from 51% in 2023. This trend highlights the widening skills and capacity gaps as companies accelerate their AI adoption efforts.
As AI continues to gain traction across industries, understanding its implications for product development remains crucial. The findings of the Modus Create study not only reflect the current state of AI integration but also point to the broader challenges organizations face as they navigate this transformative landscape. The emphasis on governance, strategic hiring, and the quest for external knowledge will shape the future of product development in an increasingly data-driven world.
For those interested in delving deeper into the research findings, the complete study can be downloaded here.
About Modus Create
Modus Create is a digital product engineering partner for forward-thinking businesses. Their global teams collaborate with clients to design, build, and scale custom solutions that deliver real results and lasting change. Learn more at www.moduscreate.com.
Contacts
Ellie Behling, Director, Corporate Communications
[email protected]
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