Partners: Businesses enlist AI in business model reinvention
IT services executives believe the most digitally advanced companies will embark on business model reinvention projects highlighting AI as a key technology for managing change.
AI will enter a business model reinvention stage this year as organizations harness the technology to navigate sudden market changes and boost resiliency.
IT service providers said this trend will be the most prevalent among larger enterprises or more digitally mature companies -- those in a better position to exploit developments such as large language models and generative AI. Data quality issues could hinder AI-based transformation. But the need to deploy AI more strategically is poised to drive projects in the coming months.
Consider the following developments:
An Accenture report, "Reinvention in the Age of Generative AI," predicted a "significant uptick" over the next 12 to 24 months in businesses using generative AI as a reinvention catalyst. "[R]einvention is becoming the default strategy for success in turbulent times," the January report read.
C-suite executives in digitally advanced companies are 2.3 times more likely to "embrace the impact of AI's capabilities" when it comes to anticipating market changes and responding to them, according to a Forrester Consulting report released today. The report also cited a lack of quality data for training models as a barrier for scaling AI and pointed to data security, quality and integration issues as top concerns for organizations pursuing digital transformation. EdgeVerve, an Infosys company, commissioned the report, which polled 630 business and IT decision makers.
Today, EY launched its Edge Technologies Lab, which aims to show customers how generative AI and edge computing improve the efficiency and accuracy of data integration. The lab, which EY rolled out in collaboration with Dell Technologies, will also address data reliability and security challenges, according to the company. Separately today, Dell unveiled a Data Science and AI Competency as part of its 2024 partner program update. Partners earn competencies by meeting training requirements.
Partner executives believe enterprises will start moving beyond initial GenAI benefits such as content creation.
AI for business model reinvention, resilience
The Accenture report, which surveyed 1,500 C-suite executives, cited technology as the top reinvention driver at 98% of organizations. Generative AI was a key tool for just over 80% of those organizations.
"Our research shows that generative AI has become a fundamental lever for business reinvention as disruption continues to rise globally," said Jack Azagury, group chief executive, strategy and consulting at Accenture.
The consulting company's Pulse of Change index, which considers business- change factors including technology, talent, economic, geopolitical, climate and consumer/social, has risen 183% since 2019.
To date, most companies exploring generative AI have started with relatively limited use cases, such as content creation. But the constant press of change will influence others to push those boundaries.
"While we see most firms applying generative AI in a more limited way, often through a series of independent use cases, reinvention leaders are going far beyond these well-established applications," Azagury said.
Those leaders seek to transform end-to-end process, often affecting core business functions, he said. In that regard, generative AI will "facilitate previously unimaginable consumer and employee experiences, transform company operations and workforces, and change how companies design new products or services."
The Accenture report noted the example of an insurance company that used generative AI to retool its entire underwriting workflow for a potential 10% revenue boost. Accenture didn't identify the insurer.
The EdgeVerve-sponsored Forrester Consulting study, meanwhile, pointed to operational resilience as a digital transformation goal -- one where AI plays an important role.
"Operational resilience is becoming increasingly important due to continuous disruptions," said Sateesh Seetharamiah, CEO of EdgeVerve.
Evolving business needs compel businesses to adopt AI, automation and digital operating models, he noted. Forrester Consulting's "Reimagine Growth with a Platform-Centric Business Strategy" report noted that 64% of the decision-makers it polled view connecting human and AI capabilities as central to their digital initiatives. In addition, 44% of respondents said they believe cited improving operational workflows with AI-based applications as a "key desired outcome."
"This emphasis on AI indicates a growing consensus that AI is a strategic component in enhancing operational resilience, fostering efficiency and catalyzing innovation in response to ongoing market disruptions," Seetharamiah said.
Airlines to see AI benefits?
The airline industry, for example, might be benefited by AI-assisted resiliency. Gordon McKenna, vice president of cloud evangelist and alliances at Ensono, a technology adviser and MSP based in Downers Grove, Ill., said airlines stopped running when COVID-19 hit and cut staff. But the carriers struggled to cope with the rebound when travel resumed, underscoring the need to rapidly scale up and scale down. The cloud coupled with AI provides that kind of flexibility for airlines, he said.
This industry is looking at, 'How can we really take advantage of these technologies to allow us to scale better in times of crisis?'
Gordon McKennaVice president, cloud evangelist and alliances at Ensono
"This industry is looking at, 'How can we really take advantage of these technologies to allow us to scale better in times of crisis?'" McKenna said.
He pointed to the example of Southwest Airlines, a company amid a cloud migration. In an earnings call last month, Robert Jordan, CEO at Southwest Airlines, estimated the company has moved nearly half of its IT resources to the cloud. He suggested the transition will generate modest cost savings but said much of the cloud gain stems from reliability and the "ability to failover systems."
"A lot of the shift to the cloud is as much a resiliency effort and a modernization of the code base … as it is a cost savings," Jordan said.
