In the race to harness the transformative potential of Generative AI (GenAI) and big data, companies across various industries are facing significant challenges, despite recognizing the substantial benefits these technologies can offer. Research from global management consultancy Kearney highlights that while firms are aware of the improvements in customer experiences, revenue, and decision-making processes that GenAI and big data can deliver, only a small fraction of them are true leaders in this domain.
Increasing Investment in GenAI
Significant Budget Increases
Companies are substantially boosting their GenAI budgets, with expenditures increasing by 22 percent to constitute 26 percent of overall data and analytics expenditures. Forward-looking organizations within this category remain optimistic about the broader impacts of these investments, with 77 percent of surveyed companies expecting better customer experiences and 76 percent anticipating revenue growth driven by enhanced efficiency and improved decision-making processes.
Interestingly, this rise in investment reflects companies’ growing understanding of AI’s potential to revolutionize various aspects of business. Many firms are adopting proactive strategies to integrate advanced AI and analytics systems, thus hoping to stay ahead of the curve in a rapidly evolving technological landscape. Despite these promising figures, the journey towards fully leveraging GenAI and big data is fraught with obstacles that many companies are still struggling to overcome.
Diverse Industry Adoption
While the enthusiasm for GenAI spans various sectors, a closer look reveals a disparity in the level of AI capability and implementation across industries. A notable 33 percent of organizations have yet to commence using the technology or find its practical applications. Additionally, 51 percent of firms identified by Kearney possess immature AI capabilities, underdeveloped functions that hinder them from effectively scaling and sustaining the necessary operations. This slow adoption rate becomes even more critical when considering the competitive advantages that early adopters of AI stand to gain.
The industries that are leading in GenAI deployment often have substantial technical expertise and resources. However, comprehensive AI integration requires more than just financial investment; a cultural shift towards innovation and agility is essential. Companies must ensure that their workforce is equipped with the required skills and foster an environment that encourages experimentation and practical application of new technologies. If these hurdles are not addressed effectively, organizations risk falling behind their competitors.
Overcoming Technical and Cultural Hurdles
Addressing Technical Expertise Gap
One of the primary challenges inhibiting widespread GenAI adoption is the noticeable lack of technical expertise within organizations. Nearly half of the companies surveyed cited this as the chief obstacle. Without the necessary technical skill set, firms find it difficult to develop, scale, and successfully sustain AI capabilities. This gap in expertise not only hampers immediate implementation but also limits the long-term potential for innovation and process optimization that AI promises.
To bridge this gap, companies are increasingly investing in upskilling their employees, seeking partnerships with academic institutions, and engaging external consultants to build the necessary technical foundations. Additionally, industry leaders recognize the importance of integrating AI-specific governance tools, underpinned by strong support from C-suite executives. This support structure is crucial for fostering a cohesive AI strategy aligned with broader business goals and ensuring measurable outcomes.
Leaders vs. Laggards
There is a stark contrast between organizations that have mature AI systems and those lagging significantly behind. According to Kearney’s findings, 49 percent of companies have developed more proficient AI and analytics systems, with 4 percent identified as industry leaders. These leading firms exhibit advanced AI integration, characterized by dedicated governance, ongoing executive support, and frameworks that enable sustained AI performance. In contrast, only 3 percent of laggards have similar systems in place, highlighting the gap that exists in AI readiness.
Leaders in AI are not just investing in technology; they are also investing in creating an AI-aware culture within their organizations. This involves not only hiring AI experts but also ensuring that the entire workforce is aligned with the AI strategy. The leaders are continuously monitoring the outcomes of AI implementations to ensure they are achieving tangible results that contribute to strategic business goals. This proactive and integrated approach enables these firms to capture significant gains from their AI investments.
The Urgency of Closing the AI Capability Gap
Long-Term Potential of AI
Kearney’s partners, Bharath Thota and Ramyani Basu, emphasize the urgency for companies to address the AI capability gap. Thota notes that firms with underdeveloped AI resources miss out on the significant benefits that these technologies offer. Successful companies are those that can seamlessly integrate a dynamic AI strategy with their business objectives, using continuous monitoring to achieve and sustain tangible results.
Basu likens the present phase of GenAI to the early days of the Internet, signaling a revolutionary shift. He insists that this technological revolution demands a fundamental change in company culture towards increased experimentation, agility, and focused efforts on attaining practical results. Companies that adapt quickly to these cultural and technical demands stand a better chance of leading the race in AI-enabled innovations, while those that are slow to adopt risk being left behind.
Future Roadmap
In the quest to leverage the transformative potential of Generative AI (GenAI) and big data, companies spanning various industries face notable challenges. Although organizations acknowledge the substantial benefits these technologies can provide, such as enhanced customer experiences, increased revenue, and improved decision-making processes, very few have mastered their implementation. Research from global management consultancy Kearney reveals that while many firms are cognizant of GenAI and big data’s potential, only a small fraction have emerged as true leaders in effectively employing these tools.
Despite the promise of these technologies, many businesses struggle with the complexities of integration, scalability, and aligning them with strategic goals. They recognize that mastering GenAI and big data requires significant investment in infrastructure, talent, and change management. The potential for GenAI to revolutionize operations is enormous, from predictive analytics to automating customer interactions. However, the journey to becoming proficient in these technologies is arduous, leaving a considerable gap between initial adoption and achieving industry leadership.