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According to a recent investigation by KPMG USnearly two-thirds (65%) of 225 US executives surveyed in March 2023 believe that Generative AI will have a high or extremely high impact on their organization over the next three to five years, surpassing other emerging technologies.
However, despite these results, almost the same number (60%) of respondents said they were still a year or two away from implementing their first generative AI solution, revealing a lack of leadership readiness for immediate adoption.
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Generative AI has become a buzzword among executives and boards as the technology has become increasingly accessible. However, organizations are struggling to keep up with its rapid development. KPMG’s survey found that less than 50% of respondents believe they have the technology, talent, and governance to successfully implement generative AI.
“Generative AI is moving so fast it’s turning executives’ heads. Businesses can’t keep up with the dozens of new generative offshoots of AI that come out every month. Although they’ve bought into its overarching promise, they’re struggling to make the first move,” Todd Lohr, U.S. technology advisory leader at KPMG, told VentureBeat. “As a result, they may not have the necessary technical expertise in their workforce to build and deploy generative AI solutions.”
To bridge this gap, leaders plan to spend the next 6-12 months understanding how generative AI works, assessing their internal capabilities, and investing in generative AI tools. Lohr said regulatory and ethical concerns over the use of generative AI are another reason for its slow adoption in some industries.
The survey interviewed 300 global leaders and senior executives, 225 of whom were based in the United States. Respondents came from companies with sales of $1 billion or more.
Generative AI: a competitive differentiator
KPMG US conducted this survey as part of its Generative AI research initiative. The report highlighted that generative AI has the potential to be the most disruptive technology seen to date, according to 77% of executives surveyed. Additionally, respondents expect impact to be greatest in enterprise-wide areas, such as driving innovation, customer success, technology investment, sales and marketing.
However, he also revealed that leaders’ prioritization of generative AI varies widely across industries. While most executives in technology, media, telecommunications (71%), healthcare and life sciences (67%) believe they have prioritized generative AI, a smaller percentage of executives consumer and retail (30%) and industrial manufacturing executives (37%) consider it a priority.
The survey also revealed that organizations struggle to extract value from emerging technologies when they take a siled approach. In fact, 68% of executives responded that they had not yet appointed a central team or person to coordinate their response to the rise of generative AI. At present, the IT function is taking the lead.
“Without a leader to lead generative AI and drive the hype, companies risk moving on, duplicating efforts, and having competing strategies. Companies need generative AI North Star to scale generative AI with confidence,” Lohr said.
The technology, media and telecommunications (TMT) industry is leading the way in prioritizing research into generative AI applications, with 60% of respondents rating it a high or extremely high priority over the past 3 next 6 months. This is the highest percentage of any industry surveyed.
Additionally, respondents from the TMT and financial services sectors were most likely to say that the recent focus on tools such as ChatGPT had a significant impact on their digital and innovation strategies. As a result, these industries are particularly receptive to the benefits of generative AI and are actively looking for ways to incorporate it into their operations.
“Generative AI has the potential to be the most disruptive technology we’ve seen to date,” said Steve Chase, US consulting leader at KPMG. “It will fundamentally change business models, providing new opportunities for growth, efficiency and innovation, while facing significant risks and challenges.”
According to Chase, for leaders to harness the enormous potential of generative AI, they need to define a clear strategy that quickly takes their organization from experimentation to industrialization.
Lohr added: “Because the technology (generative AI) is relatively new, the return on investment remains difficult to quantify. For a clear business case, companies need to identify specific use cases and prioritize them as a product portfolio. »
Lack of risk management and fear of negative consequences
Most executives (72%) think generative AI is essential to building and maintaining stakeholder trust, but nearly half (45%) say not having the right risk management tools can have a negative impact on the trust of their organization. Additionally, most executives (79%) believe that leveraging generative AI provides a competitive advantage in risk management over their peers.
Despite the expected impact of generative AI on their organizations and customers, most organizations are still in the early stages of designing and implementing risk management and responsible use programs. Only 6% of the 300 companies surveyed have a dedicated team to assess risk and implement mitigation strategies, while 25% are in the process of implementing such strategies.
Additionally, nearly half (47%) are in the early stages of assessing risks and mitigation strategies, and 22% have not yet begun to assess them. Only 5% have a mature manager AI governance program, while 49% plan to create one in the future, and 19% have partially implemented an AI governance program.
Interestingly, 27% said they currently see no need or have not yet achieved sufficient scale to merit a responsible AI governance program.
“In addition to understanding the risks of technology and keeping data in-house, companies should develop a robust data governance framework that establishes clear policies, security protocols, and standard operating procedures for handling data. This ensures that data is collected, processed and stored securely and appropriately,” Lohr added.
He said that, like any other technology or service, it is important to perform due diligence when data leaves the organization.
Leaders predict a new era for the workforce that combines human labor with generative AI. While many believe it will increase productivity, change the way people work and encourage innovation, they also worry about the potential negative impacts.
Nearly 4 in 10 (39%) executives fear a decrease in social interactions and human relationships with their colleagues, while 32% worry about the increase in mental health problems among their staff due to the stress of the loss. employment and uncertainty.
To address this issue, companies are taking a hybrid approach to hiring and building capacity across various industries and functions.
Responsible use for fruitful benefits
Leaders recognize that generative AI can revolutionize businesses in various industries, but many barriers to adoption remain. Key concerns include clear business cases and adequate technology, talent and governance.
To stay ahead of the competition, KPMG recommended executives prioritize rapid deployment of generative AI while ensuring ethical and responsible use. To achieve this, KPMG said CEOs and board members must personally invest time in understanding generative AI, and they must demand the same of their teams.
“The key to success with AI is acceptance, adoption and alignment at the leadership level within the institution. This strategy should start with literacy first. should think about new models of operation, with R&D on generative AI capabilities, potential use cases and limitations,” Lohr explained. “They should get their hands dirty and experiment with pilot projects to test the technology and better understand its potential impact.”
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