Skills shortages are the main barrier facing Irish technology leaders as AI investment rises, according to EY. In the firm's survey, 36% of respondents ranked talent gaps as their biggest constraint.
The findings point to a widening gap between enthusiasm for AI and the capacity needed to put it to work across organisations. EY surveyed 150 senior technology leaders in Ireland, including chief technology officers and chief information officers, across government, infrastructure, consumer, health, industrial, energy, telecommunications and technology.
AI adoption has risen sharply over the past year. Some 82% of respondents said they are investing in AI, up from 44% a year earlier. While 37% said they already have an AI strategy, a further 45% said they are still exploring the technology's uses.
That increase in investment has not yet translated into confidence in delivery. Nearly one in five technology leaders, or 19%, said they were concerned their organisations could not adopt AI quickly enough, up from 12% previously.
Skills pressure
Access to people with the right expertise is the most immediate obstacle. More than a third of respondents said a shortage of skilled employees was the most significant barrier to delivering their technology agenda, up from 24% in the previous survey.
Pressure is also growing inside organisations. The share citing insufficient internal capability to drive change rose to 16% from 6%, while 18% said succession planning and talent development had become a leadership priority, up from 5%.
The survey suggests AI is not yet driving broad changes in hiring plans. Just 6% said AI adoption would reduce recruitment, while 3% said it would increase hiring. A large majority, 84%, expected no effect on recruitment levels.
Ronan Walsh, Head of Technology Consulting at EY Ireland, said the findings highlight the strain on technology teams.
"While there has been much recent discussion on job displacement in tech, our research finds that the single most significant barrier to Irish technology leaders executing their agendas right now is the shortage of skilled employees to implement new technologies or progress complex transformation programmes. This points to a more nuanced reality: while AI adoption is accelerating, most organisations are struggling to find the talent they need to make AI work in practice. AI specialists are in short supply and training cannot keep pace.
"In many cases, technology leaders are being asked to work miracles, balancing rising expectations with limited capacity, and being more creative than ever in how they allocate resources while maintaining a clear focus on value and return on investment. Tech leaders across all industries are navigating a period of profound change, balancing transformation and AI agendas with the need to keep their organisations secure and running smoothly.
"As they modernise legacy environments, strengthen data foundations and manage rising cyber risk, the challenge is delivering change that is secure, practical and sustainable within constrained budgets. The organisations that will pull ahead will be those that lean into this AI-enabled transformation opportunity and invest in people, tech, governance and their ability to deliver."
Budget squeeze
Spending expectations were steadier than a year earlier, but pressure on resources has not eased. Around 36% of respondents expected budgets to rise by 3% to 9%, while 11% expected an increase of more than 10%.
Almost half, or 46%, said spending would stay broadly flat. Even so, nearly 30% cited budget limits as a key challenge, up from 19%, suggesting that stable headline budgets are being stretched by pre-committed spending and leaving less room for discretionary projects.
The pattern points to a more difficult operating environment for technology chiefs. They are being asked to support AI programmes, maintain existing systems, improve cyber defences and deliver broader transformation without a corresponding increase in capacity.
Cautious approach
Most organisations are taking a measured approach to change rather than pursuing wholesale reinvention. Only 4% described their strategy as aggressive enterprise transformation.
By contrast, 41% said they were pursuing incremental transformation, 33% favoured cautious, risk-managed change, and 21% were mainly focused on maintenance with limited appetite for change.
That caution is also reflected in how AI is being used. The most common deployments were employee productivity tools, used by 49% of organisations. Industry-specific AI tools were in place at 28%, while 18% used customer engagement tools such as chatbots and 16% had adopted AI for data analytics and decision support.
Respondents most often linked AI's benefits to improved productivity, efficiency and customer experience rather than direct cuts in spending. Just 7% cited cost reduction through automation as a key outcome.
Cyber concern
Cybersecurity emerged as the leading area for future investment and one of the most pressing operational risks. One-third of technology leaders identified cybersecurity as a key concern, while 17% pointed to weaknesses in data management and 11% highlighted data governance as a priority.
Preparedness for AI-related cyber threats was uneven. Some 31% said they were aware of AI-enabled cyber risk exposure and well prepared. Another 36% said they were aware but not prepared, 21% had limited awareness but some response capability, and 12% said they were neither aware nor prepared.
Asked about the single biggest cyber concern in the age of AI, 48% cited data leakage through generative AI tools. Other risks included AI-driven automation of cyberattacks at 38%, exposure of intellectual property or sensitive data at 26%, AI-enabled phishing and social engineering at 23%, and deepfake-enabled fraud at 20%.
Carol Murphy, Head of Markets at EY Ireland, said: "Businesses are operating in a more volatile and faster-paced world than ever before. For tech leaders, that means attempting to keep pace with AI developments, safeguarding against cyber risk and dealing with intense competition for talent, simultaneously and at pace. This research explores how they are navigating this unprecedented environment with confidence: where they feel well positioned, where they feel exposed, and how they are plotting the path forward."