Only 5% of enterprises have mature Gen AI initiatives: Genpact and HFS Research

Only 5% of enterprises have mature generative AI (GenAI) initiatives, according to a new report by Genpact, and HFS Research.

About 61% of enterprises allocate up to 10% of tech budgets to Gen AI, however, few companies have advanced projects. This highlights the urgency and challenges of Gen AI adoption.

The report titled "The Two-year Gen AI Countdown: How businesses are scaling GenAI adoption and avoiding the productivity trap" is based on a survey of 550 senior executives from organisations with revenue of $1 billion or more across 12 countries and eight industries.

Adopting a balanced and strategic approach is crucial as enterprises navigate the next two years of GenAI integration, the report stated, emphasising the immediacy of harnessing the full potential Gen AI.

"The fundamental shift will be in how enterprises think about data and technology; this will shape the future competitiveness and success of organisations globally," stated Balkrishan "BK" Kalra, President and CEO, of Genpact. 

Kalra added that the majority of executives view GenAI as a catalyst for value creation, fostering not only productivity but also customer satisfaction, revenue growth, and competitive advantage.

Investment data shows that while 51% of executives reallocate funds, primarily from IT infrastructure and software development, 50% set aside dedicated funds for Gen AI, with 42% plan to reinvest anticipated efficiency gains. 

Industries like healthcare, retail, and high-tech were most inclined to redirect existing funds toward GenAI investments while banking and capital markets and the insurance sectors preferred allocating additional dedicated budgets for their GenAI initiatives indicating a strong commitment to GenAI's potential. The life sciences sector adopts a dual strategy, counting on forecasted GenAI-driven savings for funding while remaining open to external funding and partnerships.

"The challenge for most enterprises is they remain anchored in proofs of concept that can be impressive, but rarely reach operational scale. Having access to insights that can chart a course toward GenAI’s full benefits—beyond productivity alone—is invaluable," said Sreekanth Menon, Global Lead for AI, Genpact. 

While 74% of executives anticipate GenAI driving productivity gains, concerns arise about the overemphasis of productivity at the expense of broader business goals. Around half (52%) of respondents cautioned against this approach, citing potential negative impacts on employee experience.

"The dawn of the Gen AI era signifies not just efficiency gains, but also the creation of tangible business value. Enterprises ought to gauge the influence of GenAI by its capacity to forecast and tailor experiences before solely focusing on productivity gains," Phil Fersht, CEO and Chief Analyst, HFS Research said.

Hurdles faced by organisations in deploying GenAI initiatives include data quality and strategy. Only 16% of enterprises use their proprietary data due to hesitancy in data sharing, implying that there is an urgent need for a robust data-sharing strategy, the report found.