In short: How do companies turn GenAI\u2019s ability to deliver unexpected, impressive performance\u2014its magic\u2014into equally impressive business impact?<\/p>\n
In the twelve months since ChatGPT was launched, most of us have experienced a \u201cwow\u201d moment with\u00a0generative AI<\/a>\u2014a moment when its capabilities seemed like magic.<\/p>\n Executives have been wowed, too. But after a year of hearing about the wonders of GenAI, they\u2019re ready for it to deliver real-world results\u2014and soon. CEOs are asking some hard questions: Which opportunities offer the highest value? What are the tradeoffs between cost, benefits, and risks, and how can companies ensure that GenAI is\u00a0deployed responsibly<\/a>? How do I prepare my organization for the enormous changes this technology will bring?<\/p>\n In short: How do companies turn GenAI\u2019s ability to deliver unexpected, impressive performance\u2014its magic\u2014into equally impressive business impact?<\/p>\n To help answer these questions, BCG spoke with over 2,000 CEOs and C-suite executives to get their take on the effectiveness\u2014and limits\u2014of generative AI. We\u2019ve learned a great deal about how companies are using this remarkable technology. And with a year\u2019s worth of experience and experimentation under our own belts\u2014and as new and even more impressive GenAI models arrive every month\u2014we\u2019d like to share our perspective on how to turn GenAI\u2019s vast potential into lasting value.<\/p>\n No single approach can capture the full scope of what GenAI offers. Instead, executives should evaluate their opportunities across three broad value plays:<\/p>\n These plays aren\u2019t just nifty, small-scale pilots meant to satisfy investors or boards. They involve an organization-wide commitment to embedding generative AI into every area, including budgets, processes, roles, and culture, while following the principles of\u00a0responsible AI<\/a>. And while the plays can be initiated simultaneously, each comes with its productivity outcomes, cost-benefit tradeoffs, requirements for success, risks of unintended consequences, and implications for operating models. Let\u2019s take a closer look.<\/p>\n Generative AI is already bringing welcome changes to the day-to-day work experience. Employees can use GenAI-enabled assistants to create emails and presentations much more quickly. Automated tools can deftly summarize meetings and calls in a matter of seconds, freeing up time for more creative, value-added work.<\/p>\n But the changes don\u2019t end there. Software providers are marketing increasingly compelling solutions that boost everyday effectiveness with email categorization and more precise customer engagement. You\u2019ll find that widely deploying diverse GenAI solutions and models will give productivity a jolt. And not just for individual workers\u2014GenAI tools can quickly deliver broad, diffuse productivity gains of 10% to 20% or more across the enterprise.<\/p>\n Generative artificial intelligence is a form of AI that uses deep learning and GANs for content creation. Learn how it can disrupt or benefit businesses.<\/p>\n Scaling artificial intelligence can create a massive competitive advantage. Learn how our AI-driven initiatives have helped clients extract value.<\/p>\n To set the Deploy play in motion, companies should do the following:<\/p>\n Get started now.\u00a0<\/strong>Technology wise, deploying GenAI is the most straightforward of the three plays.\u00a0<\/strong>You can begin right away by leveraging off-the-shelf software; teams\u00a0<\/strong>can easily upgrade workspace tools that they already use. You\u2019ll want to set clear guidelines for deployment, especially around confidentiality, data privacy, and intellectual property ownership. And don\u2019t go light on testing, which is critical to selecting the best solution for a specific task\u2014once a tool is deployed across tens of thousands of employees, it becomes harder to change course if the fit isn\u2019t right.<\/p>\n Don\u2019t fear the challenge of large-scale adoption\u2014embrace it.\u00a0<\/strong>Massive upskilling is essential to delivering broad efficiency gains from GenAI. Win the hearts and minds of employees with an upskilling program that conveys how fundamental the technology is to their effectiveness\u00a0<\/strong>and longer-term personal growth\u2014and to the company\u2019s success.<\/p>\n Carefully evaluate the costs and benefits of deployment.<\/strong>\u00a0GenAI may mean lower costs\u2014or maybe not. As transaction costs are distributed over a scaled hosting model, the per-unit cost of each transaction will go down. On the other hand, licensing carries a fixed cost structure that may lead to higher costs as usage grows.<\/p>\n Still, deploying GenAI is a table-stakes call in today\u2019s competitive environment. You\u2019ll want to optimize other costs to make up for the expenses\u2014but for those who choose the right opportunities, the immediate gains will be worth it.<\/p>\n While deploying GenAI tools for productivity is a must, it\u2019s not enough. Even more substantial opportunities are within reach when organizations reshape processes and functions.<\/p>\n The gains of the Reshape play show up where you\u2019d expect\u2014customer service, marketing content, and software development\u2014but also in unexpected areas like field services and engineering. Though reshaping functions can pose challenges for an organization\u2014including the centralization of tasks and process reengineering\u2014you can\u2019t ignore the payoffs. Generative AI can deliver 30% to 50% efficiency and effectiveness gains.<\/p>\n In a call center, such gains can mean that everyone wins\u2014customers, employees, and the company. BCG helped a bank\u2019s call center reduce the duration of its customer-service consultations by nearly 50%. (See Exhibit 1.) The GenAI tool involved was not only effective but user-friendly: agent feedback on the copilot solution included a 75% approval rating. Busy workers love this kind of efficiency\u2014as do customers.<\/p>\n Companies making the \u201cReshape\u201d play should keep the following in mind:<\/p>\n Anticipate the impact on your workforce.\u00a0<\/strong>Individual tasks and responsibilities will shift as generative AI becomes integral to business units; for instance, copywriters on a content marketing team will begin to focus more on editing GenAI outputs. But the demands of a move to GenAI are extensive. You\u2019ll need to create new roles and reallocate budgets. And performance assessments must also reflect GenAI usage.<\/p>\n Combine generative AI with predictive AI and proprietary data<\/strong>. Job-centric AI assistants are handy assets when they bring together GenAI with machine-learning systems and other traditional AI tools, also known as predictive AI. For example, an integrated AI assistant for field-maintenance workers would use a predictive model, based on a wealth of proprietary data, to anticipate failures and direct crews to the right repair sites; the same assistant would also use a generative AI model to provide on-the-spot knowledge and repair procedures.<\/p>\n A client is using this type of combined model to achieve a 30% reduction in repair times. The client\u2019s field workers are more productive\u2014and their equipment is functioning better.<\/p>\n At BCG, we\u2019re seeing the value of bringing predictive and generative AI together, not only for internal tools for employees but also in our solutions for clients. BCG\u2019s\u00a0Fabriq marketing platform<\/a>\u00a0relies on both types of AI to power personalization programs, using predictive AI tools for product selection and experimentation along with GenAI solutions to support campaign automation and high-volume content creation.<\/p>\n Our experience with Fabriq underscores a broader point: the strategic value of integrated AI is real and measurable. We\u2019ve seen striking results for clients even in regulated industries like health care, banking, and fintech: 40% more engagement, 80% increases in account creation, and 30% improvements to customer recommendation scores.<\/p>\n Regardless of your industry, you should strive for simplicity when integrating GenAI with other AI tools by avoiding duplicate point solutions\u2014and you should also provide high-relevance, accurate output to users by preventing hallucinations. You\u2019ll also want to balance cost and stability to optimize the time a solution takes to answer a query. A fast-paced process of development, where business and technology teams regularly share feedback on model performance, will help your organization build a solution well-suited to your needs.<\/p>\n Business and functional leaders should steer the play.<\/strong>\u00a0These leaders will define a target vision for the company\u2019s use of AI. They\u2019ll establish guardrails and guide a series of pilots across multiple parts of the organization to identify what works. And they\u2019ll devise a systematic plan to scale up the most effective pilots.<\/p>\n But leaders should watch out for the dark side of GenAI\u2019s magic\u2014the risks linked to unintended usage, hallucinations, and false precision, for example. And there are risks to productivity as well: using generative AI for the wrong task is a great way to destroy efficiency. A large-scale BCG\u00a0study<\/a>\u00a0found that workers who used GPT-4 for a task outside the technology\u2019s frontier of competence performed worse than those who didn\u2019t use the tool.<\/p>\n Experimentation can pinpoint where the technology is most effective. It can also help you find places where people can complement machines, either through human-in-the-loop feedback models or by taking over the last mile of a process that cannot be fully automated. Your staff is a big part of the Reshape play, which only reaches full effectiveness when an organization focuses most of the effort\u2014about 70%, based on our\u00a010-20-70 rule<\/a>\u2014on people.<\/p>\n Generative AI is about more than increasing productivity. It can help you reinvent customer experiences, create new services and offerings, and even build new business models.<\/p>\n Businesses are pursuing ambitious revenue gains from GenAI. A financial information company is using the technology to turn its core product\u2014selling financial data and analysis\u2014into a conversational insight-generation platform for clients. This offering alone is targeting up to $100 million of incremental, net new revenue. The company\u2019s entire set of GenAI offerings will transform its revenue profile and add significant enterprise impact.<\/p>\n In another example, a consumer goods company is building a GenAI-powered conversational assistant to provide customers with personalized diagnostics, trend discovery, product recommendations, and virtual try-on services. The company is just now starting to explore many new direct-to-consumer interactions\u2014interactions that may take a bigger role in the overall value chain. (See Exhibit 2.)<\/p>\n Two additional observations about the Invent play:<\/p>\n Big-time engineering gives you the right level of performance.\u00a0<\/strong>This value play is the most complicated, technology wise, and you\u2019ll want to build custom systems for reliability and cost efficiency. But your design thinking also needs a strong customer-centric emphasis to build the right offering that will generate market traction. The example shown in Exhibit 2 uses a set of four different large-language models, ten databases, and custom logic to deliver the desired user experience.<\/p>\n Compared to the prior two plays, the Invent play has limited implications for the overall workforce. Small, dedicated incubation teams\u2014fast-moving, nimble\u2014are ideally sized to invent new models. Once a model begins delivering value, you\u2019ll know what staffing needs to worry about as the project is scaled.<\/p>\n This play promises the greatest long-term competitive advantage<\/strong>. To achieve that advantage, develop models that draw on your first-party data and intellectual property. These unique assets are fuel for trailblazing GenAI experiences; use these assets to create interactions that customers can\u2019t find anywhere else.<\/p>\n The Deploy, Reshape, and Invent value plays are not mutually exclusive. You\u2019ll get more from GenAI by balancing initiatives across all three plays. Put in place the specific technology backbone and\u00a0responsible AI<\/a>\u00a0policies for each, and get your people excited about each initiative\u2014there\u2019s no magic without them, after all.<\/p>\n \u00a0As you pursue the three value plays, keep these core principles in mind:<\/p>\n Companies in all sectors are moving fast to realize meaningful gains through generative AI. Executives should use this one-year mark as an impetus to accelerate their organization\u2019s journey. Here\u2019s how to get started:<\/p>\n New technologies that once seemed magical\u2014the lightbulb, and the smartphone\u2014quickly became essential. Generative AI will likely be just as transformative, particularly when combined with other forms of AI. Businesses are already moving forward with implementations for competitive advantage, so don\u2019t hesitate. Greater productivity and impressive new revenue streams\u2014not to mention long-term competitive advantage\u2014will go to the organizations that can put GenAI\u2019s magic to work today.\u00a0<\/p>\n By\u00a0<\/em>Nicolas de Bellefonds<\/em><\/a>,\u00a0<\/em>Sylvain Duranton<\/em><\/a>,\u00a0<\/em>Vladimir Lukic<\/em><\/a>,\u00a0<\/em>Jessica Apotheker<\/em><\/a>,\u00a0<\/em>Rich Lesser<\/em><\/a>, and\u00a0<\/em>Theo Breward (<\/em>https:\/\/www.bcg.com\/publications\/2023\/maximizing-the-potential-of-generative-ai<\/em><\/a>)<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" In short: How do companies turn GenAI\u2019s ability to deliver unexpected, impressive performance\u2014its magic\u2014into equally impressive business impact? In the twelve months since ChatGPT was launched, most of us have experienced a \u201cwow\u201d moment with\u00a0generative AI\u2014a moment when its capabilities seemed like magic. Executives have been wowed, too. But after a year of hearing about\u2026<\/p>\n","protected":false},"author":2,"featured_media":17230,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_scj_primary_category_id":130,"_scj_featured":true,"_scj_featured_from":"","_scj_featured_until":"","_scj_featured_order":365,"_scj_visibility_class":"current","_scj_layout_family":"standard","_scj_article_style":"","_scj_display_overrides":[],"_scj_intro_image_id":17230,"_scj_intro_alt":"Turning GenAI Magic into Business Impact","_scj_intro_caption":"","_scj_intro_class":"","_scj_intro_float":"","_scj_full_image_id":17230,"_scj_full_alt":"Turning GenAI Magic into Business Impact","_scj_full_caption":"","_scj_full_class":"","_scj_full_float":"","_scj_media_type":"","_scj_media_provider":"","_scj_media_external_id":"","_scj_media_url":"","_scj_media_poster_id":0,"_scj_media_width":0,"_scj_media_height":0,"_scj_media_aspect_ratio":"","_scj_media_description":"","_scj_gallery_items":[],"_scj_related_post_ids":[],"_scj_additional_authors":[],"scj_layout_family":"standard","scj_media_provider":"","scj_media_url":"","scj_full_caption":"","footnotes":""},"categories":[130],"tags":[2301],"class_list":["post-17231","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-articles","tag-magic"],"yoast_head":"\nDeploy, Reshape, Invent<\/h2>\n
Deploy GenAI in Everyday Tasks<\/h2>\n
Generative AI<\/a><\/h2>\n
Artificial Intelligence<\/a><\/h2>\n
Reshape Critical Functions<\/strong><\/h2>\n
Invent New Business Models<\/h2>\n
Delivering GenAI Value<\/h2>\n
\n
Accelerating the Journey<\/h2>\n
\n