Artificial intelligence (AI), and generative AI (GenAI), is one of the top three topics being discussed among executives worldwide and across sectors, and GenAI is set to be scaled up during the coming year.

However, while the potential benefits of the use of GenAI are significant and set to reshape organisations' roles, processes and structures, only 6% of companies have trained more than 25% of their people on the use of GenAI, against an average target of needing to upskill or retrain 46% of all employees over the next three years to realise the benefits of GenAI.

"I think we are at a turning point regarding GenAI. 2023 was the year of experimentation, but 2024 will be the year to turn GenAI’s promise into tangible business success," management strategy consultancy BCG CEO Christoph Schweizer said on January 12.

During the course of 2023, experimentation with the use of GenAI moved to more technical, complex and engineering-driven areas. The use of GenAI for call centre and customer interaction support is known, but, during the third and fourth quarters of 2023, companies were investigating the use of the technology in biopharmaceutical regulations, automotive and heavy machinery product design, and marketing content generation, among others.

During routine interactions with its more than 2 000 clients, BCG had seen that some companies were advancing rapidly and those seeing the greatest positive impacts were those that moved beyond experimentation and scaled up the use of GenAI across the company, he said.

Additionally, the use of GenAI will be in addition to other AI systems, such as predictive AI. Companies that are deploying GenAI are seeing significant synergies between their AI systems and ways to use them symbiotically.

Further, the companies that were most advanced in deploying GenAI were those that were enabling its use through investment and getting their employees to work with GenAI in a productive way, Schweizer said.

"It is about capabilities and processes, organisation, incentives and leadership philosophy to ensure that the workforce embraces the technology and makes its potential come to life," he said.

These companies were upskilling systematically, and this extended to their executives as well, he emphasised.

"59% of leaders surveyed say they have limited or no confidence in their executive team’s proficiency in GenAI."

One of the biggest benefits that GenAI promised was productivity gains, with companies having a target of 10% or more productivity gains, with the aim to reinvest these gains for revenue uplift. The key was to invest in productivity and topline growth, he said.

Of the executives surveyed, 71% say that they plan to increase tech investments in 2024, which is an 11 percentage point jump from 2023. The potential benefit in terms of productivity gains is even greater for companies that invest more.

However, companies that were leading in GenAI use were vigilant about the cost of use. They understand that the cost of use had long-term implications and therefore must command attention now, he highlighted.

The reason the hype and aspirations surrounding GenAI had not dissipated was because the potential prize for effective use was significant, said technology unit BCG X CEO Sylvain Duranton.

"The telecommunications industry has been one of the early adopters of GenAI, and some uses have led to efficiency gains that were greater than those achieved in the past ten years," he illustrated.

"AI has brought a lot to companies and GenAI is bringing a different game," he added.

For example, deploying GenAI in everyday tasks can help companies to realise 10% to 20% productivity gains.

Reshaping critical functions around the use of GenAI, however, could lead to a 30% to 50% improvement in efficiency and effectiveness, while inventing new GenAI business models would build long-term competitive advantages for companies, he highlighted.

Meanwhile, reaping the benefits of GenAI is not easy, with 66% of executives ambivalent or outright dissatisfied with their organisation’s progress on AI and GenAI so far.

The three main reasons are a lack of talent and skills, identified by 62% of respondents, an unclear AI and GenAI roadmap and investment priorities, identified by 47%, and an absence of strategy regarding responsible AI and GenAI, highlighted by 42% of executives.

"Using GenAI to improve productivity and build new business models requires a strategic rethink of a business and the necessary gearing up to reshape competitive advantages.

"The key success factor is on the people side of the GenAI transformation, namely training people and building organisations. Some companies focus too much on technologies and objectives and, while these are important, the biggest part of the effort that will make a difference in the end is around people and organisation," Duranton emphasised.

Against the need to retrain 46% of employees over the next three years, the fact that only 6% of companies have trained 25% of their employees on the use of GenAI is a warning. However, this number rises to 21% of all companies that are making significant investments into GenAI having trained at least 25% of their employees on the technology.

Additionally, while executives worldwide must boost upskilling, Europe is lagging the global average with only 5% of companies having trained 25% of their employees on GenAI, 3% of companies in Africa, and 2% of companies in South America.

Further, 81% of the executives said that GenAI would create new roles in the business and 74% said the transformation would require significant change management, he added.

“Generative AI is radically reshaping businesses. Leading companies on the GenAI front are planning to realise up to $1-billion in productivity gains, and they are already looking at ways to reinvest into new business models and growth,” he said.

Further, BCG had over many years identified a 10%, 20% and 70% trend, whereby the initial cost of the technology comprised 10% of the total costs, operating it comprised 20% of costs and 70% of the costs were in upskilling and reskilling people, said BCG chief marketing officer Jessica Apotheker.

"GenAI is set to be more foundational than other changes and companies that are leading in the use of GenAI are being systematic about upskilling their workforces," she said.

Companies must also set objectives for how the business would grow through the use of GenAI systems, and how the companies would prepare for the next generation of their competitive advantage, she added.

"The technology can be used not only for productivity gains, but also to expand the business and bring in new ways of working to reap the benefits," Apotheker said.

Additionally, in a study BCG conducted in partnership with research and development organisation Massachusetts Institute of Technology, 90% of employees in companies actively implementing new technologies were more engaged than in companies where there was limited investment in new technologies, said BCG Tech and Digital Advantage practice global lead Vlad Lukic.

"The reasons [for the higher levels of engagement] were that employees felt respected and felt that the company was giving them the tools to do their jobs more efficiently, as well as freeing up their time to add more value to the company.

"Further, these employees felt happier on average as they expected their companies to be around into the future and to gain a competitive advantage in their markets. This makes sense, as the employees are actively adapting to new ways of working and are seeing the dynamic on the shopfloor," he highlighted.