New report urges companies to embrace generative AI or be left behind: Exclusive

Companies only have two years to realize the full potential of generative AI. Only 5% of companies have completed mature-generation AI programs, according to a new report from Genpact and HFS Research, indicating room for growth. 61% of companies recognize the value of AI and spend up to 10% of their technology spending on it.

74% expect productivity to increase, but 52% advise against focusing too much on productivity due to more important corporate goals.

Gen AI Two-Year Countdown: How Companies Increase GenAI Adoption and Avoid the Productivity Trap.

May 23, 2024, New York Global professional services and solutions company Genpact (NYSE: G) and renowned global research and analytics firm HFS Research have released a new joint research report titled “The Two-year Gen AI Countdown: How businesses are scaling adoption GenAI and avoid the productivity trap.” The report highlighted a key finding: There is only a two-year window to realize the benefits of generative AI before competitive disadvantages materialize. In a rapidly changing digital landscape, organizations are reaching an inflection point in the use of generative artificial intelligence (AI).

The article highlights the urgency and difficulties of adopting generational AI. It is based on a survey of 550 senior executives from companies with at least $1 billion in revenue, spanning 12 countries and eight industries. Most organizations are investing significantly in discovering and developing their own AI capabilities, even though most are still in the early stages of their journey. These are the key results.

Balkrishan “BK” Kalra, president and CEO of Genpact, said: “Our research shows that a majority of executives see generative AI as a catalyst for value creation, supporting not only productivity, but also customer satisfaction, revenue growth and competitive advantage.” The way companies view data and technology will fundamentally change, impacting how competitive and successful businesses around the world will be in the future. At Genpact, we believe that by leveraging domain knowledge combined with data, technology and artificial intelligence (AI), we can unlock value and innovation for our customers and drive exponential results.

Companies are doubling their investments

According to the study, only 5% of companies have developed Gen AI projects, yet 61% of executives said they would use up to 10% of their IT budgets to accelerate implementation, demonstrating the critical role that AI plays in generating value. According to investment statistics, 51% of managers reallocate funds, mainly from the development of software and IT infrastructure, 50% allocate specifically to artificial intelligence (AI), and 42% want to reinvest the expected benefits in terms of efficiency.

Industries most likely to shift current funding towards generational AI initiatives include high-tech, retail and healthcare. In turn, the banking, capital markets and insurance industries are more willing to commit further resources to their own AI programs, demonstrating great faith in the promises of this technology. The life sciences industry, on the other hand, is taking a dual approach, remaining open to external funding and collaboration while relying on projected future AI-related funding savings.

“Enterprises entering the uncharted territory of generative AI have enormous potential, but it also comes with risks,” said Sreekanth Menon, global AI leader at Genpact. Most companies need help getting stuck into impressive proofs of concept that almost never scale to operational levels. Having access to insights that can help you realize the full benefits of generational AI beyond productivity gains is invaluable.

More than an increase in productivity

The survey also shows that while 74% of executives believe generational AI will increase productivity, there are concerns that productivity may be overvalued at the expense of more important company goals. 52% of respondents advise against this strategy due to possible harm to the work environment.

Phil Fersht, CEO and principal analyst at HFS Research, said: “The significant investment in Gen AI demonstrated in this study underscores its critical role as a key catalyst for generating future value.” “The emergence of generative AI heralds increased productivity and the creation of real commercial value. Instead of focusing solely on productivity gains, companies should evaluate the impact of AI generation based on its ability to predict and adapt experiences.”

The need for data quality

Data quality is critical to the success of gen AI programs. Data quality and strategy are the top hurdles for organizations looking to achieve AI results over the next two years, underscoring the critical need for a solid data strategy.

Changing models of engagement for achievement

Managers emphasize that to adapt to the era of artificial intelligence, engagement methods must change. Eighty percent of respondents believe that time- and materials-centric models will become obsolete and to fully realize the potential of generative AI, they must work with partners to transition to performance- and purpose-driven commercial models.

Maturity levels

The study divided companies into four levels of generational AI maturity based on the amount of money invested and the degree to which they are using generational AI in their business. The key benefits of Gen AI are perceived differently at different maturity levels.

Pioneers (5%): By taking a leadership role in integration and standard setting, Pioneer companies are seeking the clear business benefits of generational AI, such as increased market share and competitive advantage.

Fast learners (27%): Fast Followers strategically leverage Gen. AI to increase productivity, with a particular focus on using Gen. AI to improve customer service.

Wait and watch (45%): Investments aside, Wait and Watch wants to leverage generational AI largely to increase productivity and operational efficiency.

Deniers (23%): Deniers who lack faith in AI are missing out on possible advances (not included in the report).

Organizations realize that integrating AI strategies with growth- and market-oriented profits is the ultimate advantage as they progress in the AI ​​generation process and generate operational benefits. However, time is of the essence here. In an increasingly AI-driven world, the research encourages organizations to act quickly and decisively, leveraging generational AI to drive innovation, create value and stay competitive.

As for Genpact

A global provider of professional services and solutions, Genpact (NYSE: G) generates results that impact the future. Our nearly 125,000 employees in over 30 countries are motivated by our entrepreneurship, natural curiosity and ambition to create lasting value for our customers. Through our deep industry and business knowledge, digital operations services, and proficiency in data, technology and artificial intelligence, we serve and transform the best companies, including the Fortune Global 500, guided by our purpose – an unwavering pursuit of a world that works better for people.