By Jeff Wray, Andreas Enders, and David Harrington
Generative artificial intelligence (GenAI) poses a dilemma. GenAI has transformative potential, and it’s developing rapidly, making it imperative for business leaders to act quickly to develop and implement an AI strategy. However, significant uncertainty about GenAI and organizational constraints are slowing the uptake of this technology, dissuading many organizations from launching major AI initiatives.
Seventy percent of CEOs globally see the need to act quickly on GenAI to avoid giving their competitors a strategic advantage, according to the EY CEO Outlook Pulse.[i] But almost as many report being stymied by uncertainty, which makes it challenging for them to move quickly.
In this environment, how do you ensure your actions today are aligned with building an enterprise that will thrive in the future?
The first step is to set overarching goals aligned to your organizational values and purpose. Your AI strategy should be guided at a minimum by certain core objectives: augmenting human capabilities, building confidence in your AI systems, and taking an end-to-end approach rather than a piecemeal one.
To achieve these goals, you need to address your biggest gaps—both the gaps between your current state and your desired future state, such as a skills gap, and the gaps limiting your ability to quickly move up the maturity curve, such as a lack of vision on business transformation and value creation.
Five strategic AI initiatives can help you address the gaps companies across sectors commonly face.
Initiative 1: Establish an AI “control tower.”
To develop a strategic vision for GenAI and ensure you align your resources to that vision, you need a control tower with a leader who can allocate capital and work across business functions.
Organizations can use an AI control tower to prioritize use cases, establish company-wide best practices and governance, and upskill talent and tech capabilities. This can give organizations the opportunity to reduce risk and capture more value from AI investments.
Initiative 2: Reimagine your future business model and functions.
AI offers an opportunity to transform your organization from the ground up. Seventy percent of surveyed CEOs acknowledge that GenAI will challenge them to disrupt their own business models to maintain competitive advantage, and 99% plan to invest in it.
But so far, businesses are mostly thinking incrementally—“How could GenAI make existing processes more efficient?”—rather than “How could AI transform business functions and business models from the ground up?”
Those leaders who have already witnessed what AI can do are the exception: Sixty-four percent of companies that have experienced a significant impact from GenAI expect it to redefine their business and operating models within two years.
[i] Global survey of 800+ executives across business functions, including 50% from the C-suite. Respondents represent companies with US$1 billion or more in annual revenue, across 15+ sectors, and headquarters in 20+ countries across the Americas, EMEIA, and Asia-Pacific. Data was collected from June to July 2023.
Initiative 3: Ensure confidence in AI.
As the use of AI increases across the enterprise, so will the risks and stakeholder expectations. Regulators are responding to these risks, but AI is a fast-moving space, while legislating is slow.
Much will depend on companies developing robust governance frameworks to build confidence in their AI applications across a wide set of stakeholders. If you can do a better job increasing confidence in your AI, you will achieve more market penetration and competitive advantage.
Initiative 4: Address talent and technology gaps.
Sixty-two percent of company leaders say their data structures, legacy technology, or key skill gaps hamper their ability to maximize the value of GenAI.
These gaps include capabilities companies possess and need to scale up. But the bigger challenge is that they must source or develop entirely new capabilities to get the most value out of GenAI.
In the longer term, while AI will reshape functions across the enterprise, some of the biggest opportunities for a fundamentally different approach are in talent and IT, which are on the front lines of deploying AI and are most likely to be directly affected by it.
Initiative 5: Develop an ecosystem of alliances.
Ecosystems of external alliances can drive double-digit revenue growth and cost efficiencies while increasing access to a wider pool of talent and capabilities.
GenAI’s ability to work with unstructured data means it will become increasingly easy to seamlessly combine not just data, but also knowledge and processes across organizations—driving new offerings and business models.
All of this should open the floodgates to a world of faster and easier multiparty alliances, in which organizations can partner to integrate existing platforms. This does, however, also increase risk and governance challenges, making third-party risk management essential.
Getting started with GenAI
If AI delivers on its potential, it could be every bit as transformative and disruptive as the personal computer has been over the past five decades.
The five initiatives provide a path through the uncertainty and resource constraints many companies face. It’s not too early to start transitioning from a tactical approach to a strategic one and to begin developing a long-term vision for your company.
Jeff Wray is the Global EY-Parthenon Leader.
Andreas Enders is the Europe West EY-Parthenon Leader.
[1] Global survey of 800+ executives across business functions, including 50% from the C-suite. Respondents represent companies with US$1 billion or more in annual revenue, across 15+ sectors, and headquarters in 20+ countries across the Americas, EMEIA, and Asia-Pacific. Data was collected from June to July 2023.