In brief
Businesses around the world are seeking to understand how GenAI could help improve efficiency, outcomes and results. Across the market, GenAI capabilities tend to emerge from bottom-up initiatives. That’s a missed opportunity for any business looking to unlock GenAI’s full potential by integrating it into the organization’s strategy. Especially given the uncertainty surrounding GenAI’s implications, capturing the technology’s full value requires a three-phase approach: 1) executing a clear maturity assessment; 2) identifying the greatest value creation opportunities; and 3) developing a robust governance approach to build confidence in AI. We’ll discuss the path to the first phase below.
How EY-Parthenon can help
Our latest EY Global CEO Outlook Pulse survey shows that 43% of CEOs have started investing in GenAI. An additional 45% are planning to do so within the next year. However, 90% of organizations are still in the early stages of GenAI maturity, either running proofs-of-concept or developing capabilities in isolated pockets of their business, which could be troubling for a few reasons.
GenAI capability often emerges from bottom-up initiatives. However, these efforts are frequently led by technical teams that could be disconnected from the wider business. This reality reflects a critical structural issue since those driving GenAI projects usually control only a fraction of the value stream, while collaboration across functions and siloes is necessary for extracting and creating value within the business.
Add the broader uncertainty that surrounds GenAI (think evolving ethical, regulatory and other considerations) and navigating a path forward becomes especially daunting if your efforts are inherently siloed. Put simply: it may be relatively easy to pilot GenAI, but scaling it to meet broader organizational needs is complex.
Adopting GenAI beyond an isolated pilot requires a more comprehensive strategy, one grounded in wider business transformation. That strategy must address a host of GenAI adoption challenges and risk factors, including:
Absent that information, the strategy may lack the strength required to unleash GenAI’s full range of potential benefits. Embracing a more strategic mindset around GenAI and emerging technology can help. What’s more, companies that approach GenAI with this philosophy tend to share a common set of distinctive characteristics that set them apart. Across the market, we see that GenAI leaders demonstrate clear and consistent:
1. Cross-enterprise strategies: These organizations prioritize exemplary data strategy, management, and architecture, driving industry-leading innovation across functions. This ultimately fuels growth. By harnessing the full potential of data-driven insights, these organizations gain a competitive edge.
2. Capital and resource priorities: Among leaders, investment in GenAI is a top priority for the organization as GenAI-driven business models become major growth drivers. Moreover, investment in GenAI is a distinct and well-defined part of overall capital allocation for the organization.
3. Emerging technology focus: These organizations establish formal constructs such as Centers of Excellence excellence with the autonomy ability to influence management decision-making. Partnerships are formed to conduct advanced GenAI research and develop applications, and robust management structures are implemented to govern data and risk responsibly.
4. Product and service innovation: Leading organizations continuously invest in and adopt GenAI, resulting in the creation of industry-leading products and services, lucrative patents, and increased profit margins. They boast a unique and differentiated portfolio that is both scalable and sustainable. Additionally, a well-defined prototyping methodology enables the continual development and testing of new concepts.
The good news is that, any organization, at any stage of the GenAI journey, can establish the a foundational strategy around these core factors. We recommend taking a two-fold approach to achieving that mindset shift.
First and foremost, any business looking to adopt GenAI successfully must start by setting overarching goals for implementation. These objectives should clearly line up to align with your organizational values, purpose and strategic business priorities— and become the driving force that connects your entire GenAI strategy. Only then can you start dismantling siloes to create an end-to-end strategic GenAI approach. To get there, organizations need to identify, address and measure the gaps between current and desired future state – benchmarking current GenAI implementation activities, compared to a mature, enterprise-wide deployment of AI.
By leveraging the EY.ai Maturity Model, we work with organizations to gain awareness around of their current maturity level and outline clear steps to move to the next level of the journey. This helps leaders understand where their organization falls across various stages of maturity, ranging from ideating to leading. For example:
GenAI holds a wealth of potential benefits for organizations across industries and sectors. Working with clients, EY teams have learned that the technology can create value in many ways, ranging from using generative content and automated workflows to enhance the conversion rate of sales representatives (in this case, at a business information services company, a US$100 million opportunity), to automating processes in engineering, customer service, knowledge management and other domains (at a telecommunications and media conglomerate — a US$1-1.5 billion opportunity). If AI fulfills its potential, its influence could mirror the transformative impact the personal computer has had over the past five decades, greatly bolstering productivity, generating innovation, and cultivating new business models. Yet, it could also disrupt those businesses that fail to adapt quickly enough.
A strategic, end-to-end approach to adopting GenAI is key to getting the best return. Organizations that start with a 5-step maturity assessment position themselves for the best outcome.
Why enabling AI’s full value requires top-down thinking
To realize AI’s full potential, companies should develop AI capability in a way that is integrated and top down. Read more.
Three tailwinds for robotics adoption in 2024 and beyond
As the world retools after the pandemic, more companies will soon be positioned to leverage robots —thanks to falling prices and AI advances. Find out more.
How to navigate global trends in Artificial Intelligence regulation
Learn why the AI regulatory approach of eight global jurisdictions have a vital role to play in the development of rules for the use of AI.
