BCG Research: Unleashing Potential through Gen AI

In a world driven by technology, the advent of artificial intelligence (AI) has been both revolutionary and transformative. The promise of AI, especially Generative AI (Gen AI), has captivated the imagination of businesses across industries, with the potential to reshape operations, drive innovation, and unlock unprecedented value. However, while the possibilities are boundless, the reality is that many companies have yet to fully harness the power of AI to its maximum potential.

BCG Research Insights: Unlocking the AI Potential

In recent years, Boston Consulting Group (BCG) has delved into the intricate realm of AI, uncovering profound insights into its implementation and impact. Their research reveals a critical disparity: while 89% of companies are investing in AI, only a mere 11% have successfully unlocked substantial value from their investments. This stark contrast underlines the challenges that organizations face in fully capitalizing on AI’s capabilities.

BCG’s Digital Acceleration Index further highlights that companies investing more in their digital transformation journey also allocate more resources to AI endeavors. The interplay between digital investment and AI underscores the symbiotic relationship between the two realms, with each amplifying the other’s potential. Moreover, the research underscores the remarkable potential for even modest AI investments to yield significant returns. Small seed investments in AI use cases can lead to a revenue boost of up to 6%, and as investments increase, the revenue impact triples, reaching an impressive 20% or more. Leading companies, often referred to as AI high performers, exhibit superior performance across various key performance indicators (KPIs). They outshine their peers by yielding 3 percentage points more Earnings Before Interest and Taxes (EBIT), translating to a substantial increase of nearly 30% compared to companies that struggle to scale AI.

Cracking the Code: What Sets the Leaders Apart

What distinguishes these AI high performers from the rest? The answer lies in their strategic approach and systematic adoption of AI. BCG’s research hones in on three crucial factors that set these leaders apart:

• Prioritizing High-Impact Use Cases: AI high performers excel in not just choosing AI use cases based on business priorities, but also scaling them rapidly to maximize value. This strategic approach involves rigorous assessment of value, often supported by dedicated organizational units focused on orchestrating and accelerating scaling.
• Accessible Data and Technology: These leaders recognize the importance of democratizing data and technology across the organization. Unlike other companies that maintain siloed and incompatible tech stacks, AI high performers make data, technology, and algorithms available to teams throughout the organization. The presence of a modular data and digital platform is critical to enabling accessible data and swift AI deployment.
• Leadership and Talent: AI high performers realize that AI’s success depends not only on technological capabilities but also on the human element. They ensure that the right people are in the right roles, emphasizing a harmonious balance between human expertise and technological prowess. Organizations dedicating 10% or more of their digital staff to AI roles and having 30% or more of staff engaged in AI solutions daily reap the rewards with significantly boosted EBIT.

Scaling for Success: The Gen AI Approach

A pivotal insight from BCG’s research is the significance of scaling AI use cases to generate enduring value. Scaling use cases forms the crux of AI high performers’ success. These leaders scale more than twice as many AI use cases, doing so two to three times faster. Their ability to move from idea to execution rapidly—within 5 to 7 months—empowers them to scale up a remarkable 44% of their use cases, compared to the 19% achieved by other companies. This speed advantage positions them at the forefront of AI adoption and value generation.

A Peek into Successful Implementations

Two compelling case studies encapsulate the essence of BCG’s research, showcasing how AI high performers put theory into practice:

• European Industrial Goods Company: The company’s previous digital transformation efforts were disjointed and lacked strategic guidance. The appointment of a new head of digital transformation, coupled with a comprehensive strategy, saw the organization break down data silos and create accessible data pools. The company’s focus on value-based use cases, coupled with a dedicated enablement function and agile execution models, led to the scaling of AI use cases across the organization.
• Global Consumer Goods Company: This company embarked on an AI journey with low digital maturity but a determination to drive revenue and profitability. Prioritizing three pivotal AI use cases, the company adopted a phased approach involving business case framing, data and IT architecture design, and agile MVP testing. The company’s emphasis on accessible data, technological platforms, and human capabilities paved the way for AI solutions to be deployed across markets, yielding impressive financial results.

The Road Ahead: From Vision to Reality

As businesses navigate the intricate terrain of AI adoption, BCG’s research serves as a guiding light. The chasm between AI investments and actual value realization underscores the complexities involved. However, the success of AI high performers demonstrates that unlocking AI’s potential is within reach. By prioritizing high-impact use cases, fostering data accessibility, and nurturing leadership and talent, organizations can not only scale AI use cases but also unlock unprecedented value, propelling themselves into the forefront of AI-driven innovation.

In a world poised on the brink of AI transformation, the lessons from BCG’s research serve as a compass, directing organizations toward a future where AI’s potential is fully harnessed, and where the boundaries of innovation are redefined. As AI continues to evolve, it is these visionary organizations that will shape the landscape, driving progress, and reimagining industries.

Author: Rayna Calica