New Report Urges Businesses to Embrace Generative AI or Risk Falling Behind: Exclusive

Businesses Only Have Two Years to Realise Generative AI's Full Potential, According to a New Report from Genpact and HFS Research only 5% of businesses have completed mature generation AI programs, according to research, indicating space for expansion.n61% of businesses recognize the value of gen AI and devote up to 10% of their tech spending to it.

 74% expect productivity increases, however, 52% advise against putting too much focus on productivity due to more important corporate objectives.

The Two-year Gen AI Countdown: How businesses are scaling GenAI adoption and avoiding the productivity trap.

May 23, 2024, New York City The global professional services and solutions company Genpact (NYSE: G) and the renowned global research and analysis firm HFS Research have released a new joint research report titled "The Two-year Gen AI Countdown: How businesses are scaling GenAI adoption and avoiding the productivity trap." The report highlights a crucial finding: there is only a two-year window of opportunity to take advantage of the benefits of generative AI before competitive disadvantages materialize. In the middle of the rapidly changing digital landscape, organizations are reaching a turning point in their use of generative AI (gen AI).

The paper highlights the urgency and difficulties associated with the adoption of Gen AI. It is based on a survey of 550 senior executives from companies with $1 billion or more in revenue spanning 12 countries and 8 industries. The majority of organizations are substantially investing in discovering and growing their own AI capabilities, despite the fact that most are still in the early phases of their journey. These are the key results.

Balkrishan "BK" Kalra, President and CEO of Genpact, stated, "Our research shows the majority of executives view generative AI as a catalyst for value creation, fostering not only productivity but also customer satisfaction, revenue growth, and competitive advantage." The way businesses view data and technology will fundamentally change, and this will have an impact on how competitive and successful businesses are in the future throughout the world. At Genpact, we think that by utilizing domain knowledge with data, technology, and artificial intelligence (AI), we can unlock value and innovation for our clients and create exponential results.

Businesses Are Increasing Their Investment by Twofold

According to the study, only 5% of businesses have developed gen AI projects, yet 61% of executives said they will use up to 10% of their IT budgets to speed up adoption, demonstrating the critical role gen AI plays in generating value. According to investment statistics, 51% of executives reallocate funds, mostly from software development and IT infrastructure, 50% set aside specifically for artificial intelligence (AI), and 42% want to reinvest expected efficiency advantages.

The industries most likely to shift current funding towards gen AI initiatives include high-tech, retail, and health care. The banking, capital markets, and insurance industries, on the other hand, are more willing to devote further funds to their own AI programs, demonstrating their high belief in the technology's promise. The life sciences industry, on the other hand, employs a dual approach, keeping open to outside funding and collaborations while relying on projected future AI-driven savings for financing.

"Enterprises venturing into the unexplored realm of generative AI have immense potential, but there are risks involved as well," stated Sreekanth Menon, Global Lead for AI at Genpact. The majority of businesses need help staying stuck in impressive proofs of concept that hardly ever scale to operational levels. It is priceless to have access to insights that can help steer towards the full advantages of generation AI, which go beyond productivity gains.

Beyond Increases in Productivity

The survey also shows that even while 74% of executives believe that generation AI would increase productivity, there are worries that productivity may be overemphasized at the expense of more important company objectives. 52% of respondents advise against this strategy due to possible harm to the working environment.

Phil Fersht, CEO and Chief Analyst of HFS Research, stated: "The significant investment in gen AI demonstrated in this research highlights its pivotal role as a primary catalyst for future value generation." "The emergence of generative AI heralds increased productivity and the production of real commercial value. Instead of concentrating just on productivity increases, businesses should evaluate the impact of generation AI by its ability to predict and customize experiences."

The Necessity of Data Quality

The quality of data is critical to the success of gen AI programs. Data quality and strategy are major obstacles for organizations hoping to achieve gen AI outcomes in the next two years, which emphasizes the critical necessity for a strong data strategy.

Changing Models of Engagement for Achievement

Executives stress that in order to adapt to the AI era, engagement methods must change. Eighty percent of respondents believe that time and material-driven models will become obsolete and that, in order to fully realize the potential of generative AI, they must move to performance- and purpose-driven commercial models in collaboration with partners.

Levels of Maturity

The study categorizes firms into four gen AI maturity levels based on the amount of money invested and the degree to which gen AI is being used in their operations. The key benefits of Gen AI are regarded differently throughout these maturity levels.

Pioneers (5%): Taking the lead in integration and establishing standards, Pioneer companies are looking for clear business benefits from Gen AI, like a bigger market share and an edge over competitors.

Quick Learners (27%): Fast Followers strategically apply gen AI to increase productivity, with a particular emphasis on leveraging gen AI to improve customer experience.

Wait and Watch (45%): By postponing investment, Wait and Watch businesses want to use Gen AI largely to boost productivity and operational efficiency.

Deniers (23%): Deniers, who lack faith in artificial intelligence, are losing out on possible advancements (not included in the report).

Organizations are realising that integrating their AI strategy with growth and market-oriented gains is the ultimate advantage as they progress in their generation AI journeys and generate operational advantages. However, time is of the essence. In an increasingly AI-driven world, the research exhorts organizations to take quick, decisive action, leveraging Gen AI to drive innovation, create value, and sustain competitiveness.

Concerning Genpact

Global provider of professional services and solutions, Genpact (NYSE: G) produces results that influence the future. Our almost 125,000 employees in more than 30 countries are motivated by our entrepreneurial agility, natural curiosity, and ambition to build enduring value for our clients. With our deep industry and business knowledge, digital operations services, and proficiency in data, technology, and artificial intelligence, we serve and transform top companies, including the Fortune Global 500, driven by our purpose—the unwavering pursuit of a world that works better for people.