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The advent of GenAI has proven to be the first real innovation to disrupt industry since the advent of the internet. While GenAI is only over a year old, it has left enterprises scrambling to gain a competitive advantage. However, the window of opportunity for these enterprises may be shorter than anticipated.
Enterprises have only two years to adopt GenAI before competitive disadvantages emerge, according to a new report by Genpact and HFS Research. The report also highlights that only 5% of enterprises have mature GenAI initiatives, signaling an urgent need for acceleration of GenAI adoption.
Genpact is a global professional services and solutions firm and HSF Research is a leading research and analytics firm. The two companies released the findings of their research in a report titled “The Two-year Gen AI Countdown: How Businesses Are Scaling Genai Adoption And Avoiding The Productivity Trap”.
The report is based on a survey of 550 senior business executives from enterprises with revenue exceeding $1 billion across 12 counties and eight industries.
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One of the key findings of the report is that enterprises are aware of the importance of GenAI, with 61% allocating 10% of their tech budget to GenAI. However, knowing the importance of GenAI has not translated into progress. Most organizations are too caught up in the proof of concept stage, rarely allowing the GenAI initiatives to reach operational scale.
“The fundamental shift will be in how enterprises think about data and technology; this will shape the future competitiveness and success of organizations globally. At Genpact, we believe the opportunity to drive exponential outcomes is now, by leveraging domain expertise alongside data, tech, and AI to unlock value and innovation for our clients.” said Balkrishan “BK” Kalra, President and CEO, Genpact.
The data from the research shows that executives are reallocating funds from IT infrastructure to software development, with half set aside for GenAI. Two out of five enterprises (42%) plan to reinvest the efficiency gains. With nearly three in four senior executives expecting productivity gains from GenAI initiatives, raises concerns about overemphasis on productivity at the expense of other business goals.
The two major hurdles to GenAI progress are a lack of data quality and strategy. To overcome such hurdles, organizations can take a few key steps. The report recommends pivoting to system-wide optimization for holistic enhancements across systems. It also recommends prioritization of robust data frameworks and the development of a skilled workforce ready for AI.
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Another key recommendation in the report is for organizations to focus on performance and purpose-driven partnerships, moving away from traditional, effort-based models. This evolved form of partnerships could be better suited to the complex nature of AI projects, and are more likely to deliver tangible outcomes.
According to Phil Fersht, CEO and Chief Analyst, HFS Research, enterprises need to think beyond productivity and focus on creating tangible business value. GenAI initiatives can be used to boost employee experience, revenue growth, and customer satisfaction.
With the rapidly changing digital landscape, organizations have reached a pivotal point in their use of GenAI. The research by Genpact and HSF shows that companies that remain focused on strategic outcomes that bring long-term benefits will be best placed to reap the full benefits of their GenAI initiatives.
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