NEW DELHI: Generative AI (GenAI) exploded into the public consciousness in 2023, promising to transform the way business functions. Despite the potential, however, leaders are struggling to convert hype into reality.
According to a new report by Boston Consulting Group (BCG), 66 per cent of executives are ambivalent or outright dissatisfied with their organisation’s progress on AI and GenAI so far, citing three primary reasons for their dissatisfaction: a lack of talent and skills (62 per cent), an unclear AI and GenAI roadmap and investment priorities (47 per cent), and absence of strategy regarding responsible AI and GenAI (42 per cent).
The report, titled BCG AI Radar: From Potential to Profit with GenAI, is based on a survey of 1,406 C-level executives in 50 markets and 14 industries. Seventy-one percent of executives surveyed say they plan to increase tech investments in 2024 — an 11-point jump from 2023 — and even more (85 per cent) plan to increase their spending on AI and GenAI.
Fifty-four per cent of leaders already expect AI to provide cost savings this year, primarily through productivity gains in operations, customer service, and IT.
“This is the year to turn GenAI’s promise into tangible business success,” said Christoph Schweizer, BCG’s CEO.
“Almost every CEO, myself included, has experienced a steep learning curve with GenAI. When technology is changing so quickly, it can be tempting to wait and see where things land. But with GenAI, the early winners are experimenting, learning, and building at scale.”
“The paradigms of AI and Gen AI use are shifting rapidly, with more and more businesses accepting and focusing on how these frontier technologies can help increase productivity and business goals,” said Nipun Kalra, Managing Director & Partner, and head of BCG X in India.
“India, particularly, leads in boosting technology investments and prioritizing AI and Gen AI use. The Digital India initiative of the government is mainstreaming grassroots level businesses including SMEs and MSMEs aided by technological advancements in AI, Data Science and Machine Learning.”
Although a small percentage of companies are already reaping the rewards of AI and GenAI, others are either playing catch up or standing on the sidelines.
More than 60 per cent of executives surveyed say their firms are still waiting to see how AI-specific regulations develop, and just 6 per cent of companies have trained more than 25 per cent of their people on GenAI tools so far.
India fares slightly higher than the global average with 9 per cent companies having trained more than 25 per cent of their people on GenAI tools.
“To unlock GenAI’s full potential, executives should deploy it to improve efficiency of everyday tasks, reshape critical functions, and invent new business models,” said Schweizer.
“Doing so can increase productivity by up to 20 per cent, enhance efficiency and effectiveness by up to 50 per cent, boost revenue, and create long-term competitive advantage.”
“Much needs to be done in upskilling workforce in AI proficiency, including creating new roles that will specifically focus on AI use. This is also an area where there are many positive signs in India, with a focus on skilling for AI, both at the industry level as well as at the university level,” said Kalra.
According to the report, “winning” companies acknowledge GenAI’s permanence and recognise its potential for both enhanced productivity and topline growth.
Among characteristics that set the winners apart from observers, it calls out investing in AI for productivity and top-line growth, systematic upskilling and implementing responsible AI (RAI) principles.
“What is imperative for India is to also create a framework simultaneously for responsible AI use, given its rapid adoption. The Indian government is already mulling regulations for AI as part of the Information Technology Rules. These will include creating safeguards for preventing bias in AI and language models as well as tackling issues such as deepfakes and synthetic content, especially for consumer facing platforms and financial platforms. Businesses and industry can lead the way here by creating self-regulatory frameworks for responsible AI use,” concluded Kalra.
