• March 22, 2024
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Enterprise Leaders Plan to Invest in GenAI to Improve CX, KPMG Finds

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Almost all (97 percent) U.S. business leaders representing organizations with an annual revenue of $1 billion or more ;plan to invest in generative artificial intelligence in the next 12 months, and the top investment priority right now (according to 45 percent of them) is improving customer experience, according to new research from KPMG.

Of the 97 percent who plan genAI investments, 43 percent plan to invest $100 million or more. Nearly a quarter expect to invest between $100 million and $249 million, 15 percent to invest between $250 million and $499 million, and 6 percent to invest more than $500 million.

For those who have already invested in genAI, productivity has seen the greatest gains. In fact, 51 percent of leaders are currently measuring genAI-related returns through productivity gains, followed by employee satisfaction (48 percent) and revenue generated (47 percent).

Another upside to increased productivity is the potential for genAI to ultimately help reduce employee stress and burnout, an outcome expected by 90 percent of leaders.

But those aren't the only expected rewards. Fifty percent of leaders anticipate the greatest value creation from genAI investments will come from enhancing existing products and services by analyzing customer data, enhancing efficiency to generate greater productivity (48 percent), improving product quality, efficiency, and innovation (42 percent) and improving supply chain efficiency and reducing cost (37 percent).

And, as performance indicators for genAI continue to evolve, leaders can expect early productivity boosts to give way to more transformative AI investments.

KPMG's research highlights the fact that the genAI landscape is rapidly evolving, but most organizations have yet to realize sustainable growth beyond productivity gains. And though business leaders are eager to accelerate their genAI strategies, they also recognize that they must first make meaningful investments in data security, governance frameworks, and workforce preparedness to enable long-term business value.

In fact, investment strategies are being shaped by various considerations, but the majority of respondents cited readiness of risk management processes and governance (77 percent) and data security (76 percent) as the most influential factors. Top investment priorities right now include improving customer experience (45 percent), workforce training and capability building (35 percent), purchasing genAI technology and solutions (30 percent) and building responsible genAI and governance programs (30 percent).

As for governance, 34 percent of leaders say the CEO is leading AI-related initiatives at their organizations, followed by the chief information officer (31 percent) and the chief innovation officer (21 percent). ;Forty-five percent of leaders have already or are planning to hire new leadership to oversee AI investment and strategy in the next year.

Whether the CEO or another executive is spearheading efforts, a designated leader within the C-suite is uniquely positioned to drive transformation across the enterprise, from enabling cross-disciplinary integration at the board and functional levels where new processes and quality control initiatives are implemented, to preparing the workforce with training and education, KPMG suggests.

When it comes to training, 58 percent of organizations plan to provide mandatory genAI skills training for both employees and leaders, while another 17 percent of leaders and 19 percent of employees have already undergone some training.

A full 95 percent of leaders said education and training, followed by regular audits and monitoring and human oversight (both 91 percent), and ethical frameworks (87 percent) would be the most effective in ensuring ethical use of genAI at their companies.

"We're entering the next phase of genAI, moving from pilots to transformational programs," said Steve Chase, KPMG's vice chair of AI and digital innovation. "Early experimentation has proven the potential of genAI, sparking a readiness for greater investments that will deliver enterprise-wide productivity gains, reshape business models, and create new revenue streams. Our experience at KPMG and with our clients has underscored that the readiness of your workforce will ultimately dictate success with genAI, and this will be truer than ever as we enter this next phase."

And, as an outshoot of all that, 54 percent of leaders expect new business models to support their growth strategies in the next 12 months, followed by new product and revenue streams (46 percent), productivity (39 percent), and profitability (31 percent).

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