New Report: Unlocking Business Value with Generative AI
/The rise of generative AI (GenAI) is reshaping industries and delivering remarkable returns on investment. According to an IDC November 2024 report, 2024 Business Opportunity of AI Generative AI Delivering New Business Value and Increasing ROI, organizations worldwide are embracing GenAI at unprecedented rates, with spending set to grow from $44 billion in 2024 to over $304 billion by 2028.
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The report, which includes results from a survey of more than 4,000 business leaders and decision-makers, shows the rapidly changing landscape of AI in industry. Here, we explore the report’s key findings on how businesses can leverage GenAI effectively.
Generative AI Adoption and ROI Trends
Generative AI adoption is accelerating rapidly. In 2024, usage surged to 75%, up from 55% in the previous year. 92% of respondents currently use AI for marketing and PR, reflecting a clear shift in priorities as organizations integrate AI into their operations.
On average, for every $1 a company invests in GenAI, the ROI is 3.7X across industries. Respondents in the energy industry realized an average ROI of 3.5X, and manufacturing respondents reported 3.4X ROI.
Why Organizations Are Investing in GenAI
Organizations are investing in generative AI primarily to boost productivity and fuel growth. Employee productivity emerged as the top priority, with 33% of respondents identifying it as their main focus, followed by top-line growth at 23%. These initiatives are paying off in tangible ways. For instance, Canadian Tire Corporation implemented ChatCTC, a secure, Azure-based AI tool, to streamline employee tasks. The tool has saved employees 30-60 minutes daily, freeing them to focus on higher-value initiatives.
Beyond productivity, GenAI is enhancing innovation and customer engagement. Companies are deploying AI solutions to create personalized experiences, optimize customer service, and improve product development.
Barriers to GenAI Adoption
Despite its promise, the path to widespread GenAI adoption is not without challenges. A significant barrier is the lack of skilled workers, cited by 45% of organizations as a major obstacle—down from 52% in 2023. This skills gap underscores the need for comprehensive training and upskilling programs across industries, some of which are already working as evidenced by the year-over-year change.
Other challenges include data management, lack of AI governance, cost, and concerns about IP loss. Responsible AI governance and internal usage guidelines are becoming an area of focus for organizations implementing GenAI.
Leadership in AI: What Sets the Best Apart
Organizations classified as AI leaders are outperforming their peers in terms of ROI and preparedness. These leaders, accounting for 21% of surveyed organizations, are realizing an impressive average ROI of 10.3x. They achieve this by aligning AI strategies with business goals, investing in responsible AI practices, and rapidly deploying AI solutions.
For example, AI leaders implement new AI initiatives in less than three months on average, compared to six months for non-leaders. This agility allows them to monetize more use cases, ranging from customer engagement to operational efficiency.
Gravitating Toward Advanced AI Solutions
The report highlights a significant shift in how companies are planning to approach AI implementation in the next two years. While pre-built AI solutions like Microsoft Copilot remain dominant today, organizations are increasingly gravitating toward more advanced AI approaches. By 2026, 36% of companies are expected to prioritize custom-built AI solutions tailored to their specific needs, up from 19% currently.
Customized versions of pre-built solutions are also gaining traction, as businesses seek greater flexibility and control over their AI implementations. This shift reflects a broader trend toward aligning AI capabilities with unique organizational goals and challenges.
Strategic Recommendations
To harness the full potential of GenAI, businesses should focus on a few key strategies. They should prioritize AI initiatives with measurable outcomes that generate value within weeks or months. This approach ensures tangible ROI and fosters stakeholder confidence.
Organizations also need to address the skills gap by launching organization-wide training programs. These programs should target employees at all levels and equip them with the knowledge to integrate AI into their workflows.
These organizations must also implement robust AI governance frameworks. Clear principles, policies, and monitoring systems are essential to mitigate risks and ensure compliance while fostering innovation.
Conclusion
The business opportunities presented by generative AI are vast and transformative. By addressing barriers to adoption and focusing on ROI-driven initiatives, organizations can unlock new levels of efficiency, creativity, and growth. As industries continue to integrate AI into their operations, the difference between leaders and others will become increasingly pronounced.
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