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NEW YORK, August 15, 2024 â€�  Executives say that generative AI is already having a significant impact on how they are charting the course for their organizations, according to a new survey by ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø LLP, and the vast majority say that investments will increase with positive ROI expected in the next three years.

The survey of 225 senior business leaders at companies with $1 billion or more in revenue found that the majority are already seeing the impact of GenAI on their business: 71% are leveraging data in decision making, 52% say it is shaping competitive positioning, and 47% say it is opening new revenue opportunities.

Respondents also weighed in on their planned investments and anticipated impact in the next three years. 

• 83% believe that GenAI investments will increase over the next three years.
• Executive management says revenue growth is the top goal for GenAI investment, while the rest of the respondents say their top goal is productivity.
• 78% are confident in the ROI of planned investments in GenAI over the next 1-3 years,  including 11% who are highly confident.  ROI is defined by revenue growth, profitability, cost savings, efficiency, employee engagement, and more.
• 24% plan to deeply integrate generative AI into business processes and strategy.
• 61% plan to expand the application scope of current GenAI initiatives, 55% plan to introduce GenAI into new business functions, and 55% plan to invest in upskilling employees, recognizing the importance of preparing their workforce for the future.

“GenAI is not a fad. It’s a game-changer, and business executives expect to see the payoff in the next three years as they scale its use in their organization to gain a competitive edge and grow their business. The leaders I’ve talked to say that they believe a combination of investment in AI technology and talent will pay off in terms of better performance, improved quality, and enhanced customer experience and loyalty,â€� said Carl Carande, Vice Chair of Advisory at ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø LLP.

In terms of functional integration, the survey found that IT/technology has the highest integration of GenAI, with 66% of organizations having fully integrated or in the process of executing a holistic GenAI program, followed by operations at 53% and marketing and sales at 48%. The top purposes for GenAI utilization include IT query support and assistance (45%), demand forecasting (39%), and personalized marketing messages (41%).

Preparing and Leading the Workforce

When it comes to the workforce, the survey found just 16% are highly equipped and capable across all areas necessary for GenAI utilization, while 78% are moderately equipped. Over two-thirds (69%) are currently training their current workforce in GenAI, and 61% are actively hiring new talent to support their GenAI initiatives.

“A human-first approach to AI transformation requires personalized upskilling and reskilling for jobs and roles across the enterprise,â€� said John Doel, Principal, Human Capital Advisory, ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø LLP.  “Empowering workers with AI collaboration in their everyday tasks unlocks the potential for the new workforce and org models that deliver the long-term benefits to the enterprise. It has become increasingly evident that GenAI is freeing employees from common tasks and activities that allow workers to focus on uniquely human skills such as critical thinking, problem solving and decision making, which is redefining the jobs and career pathways of the future.â€�

Leaders also report that their employees are making productive use of the time saved by using GenAI, with strategic planning and decision making (43%), creative and innovative projects (40%), and learning and skill development (40%) as the top-cited applications of their new-found time.

When it comes to executive leadership of their organization’s GenAI strategies, 8% say they have already assigned a dedicated chief AI officer position to lead their efforts, while 37% plan to do so.

Finding the Right Approach: Build versus Buy

The survey also explored the build versus buy approach for GenAI solutions. It revealed that 50% of organizations are buying or leasing their GenAI from vendors, while 29% are pursuing a mix of building, buying, and partnering. Only 12% of organizations are building GenAI solutions in-house.

The motivations for pursuing in-house development of GenAI solutions include cost savings and ROI (63%), customization to meet specific needs (52%), intellectual property rights (41%), and rapid prototyping and iteration (41%).

Respondents also express concerns about engaging external partners for GenAI solutions, with 76% naming data privacy and security risk, 58% citing dependence on a partner’s expertise and resources, and 52% highlighting the risk of non-compliance with regulations.

Risk and Regulation

As the use of GenAI scales, leaders also remain focused on risk management and mitigation, with more than half (56%) citing risk as a highly significant focus. Survey participants indicate that cybersecurity (79%) and data quality (66%) are the key areas of focus for current GenAI risk mitigation efforts. They also say that “deploying ethical AI frameworks� and “implementing stringent data privacy measures� are essential in managing GenAI risks.

Organizations continue to monitor the evolving AI regulatory environment, with 63% anticipating more stringent data privacy requirements in the future. As a result, 60% are actively reviewing and updating their data handling practices. More than half (54%) expect AI regulation to increase costs for their organization.

"With the growing adoption of GenAI, prioritizing risk management and governance, with a focus on cybersecurity and data privacy, is crucial for innovation and retaining stakeholder trust,â€� said Emily Frolick, Trusted Imperative Leader, ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø LLP. “Ensuring the safe deployment of GenAI and weaving it into governance structures allows organizations to guarantee their GenAI initiatives are efficient, effective, and adhere to ethical and regulatory guidelines.â€�

For more details on regulatory shift and AI regulation, please click here.

The Bottom Line

“The survey results clearly indicate that GenAI is already making a significant impact on a majority of businesses, with executives recognizing its potential to improve decision making, shape competitive positioning, and accelerate revenue,â€� said Per Edin, AI Go-To-Market Leader for Advisory Services at ÀÖÓ㣨Leyu£©ÌåÓý¹ÙÍø LLP.

“The survey underscores the growing momentum of GenAI, driven by growing adoption, increasing investments and rising confidence in the ROI, positioning organizations for success in an increasingly AI-driven future.�

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