The initial enthusiasm that greeted generative AI less than two years after it went mainstream is waning a bit as organizations get down to the business of making the emerging technology work for them.
A report by global consultancy Deloitte found that executive expectations of what generative AI can do for their organizations are still high and investments continue to grow, but companies also are seeing challenges in such areas as data quality and security, various risks like hallucinations and privacy that come with generative AI, and a fluid regulatory environment.
In addition, while some organizations surveyed by Deloitte are moving past proofs-of-concept (POCs), they are under pressure to scale their efforts and better measure the impacts of generative AI and demonstrate business value, which will be crucial if executives hope to ensure that their companies continue their high investments in the technology.
“As promising experiments and use cases begin to pay off, it’s clear that we have arrived at a pivotal moment for generative AI, balancing leaders’ high expectations with challenges such as data quality, investment costs, effective measurement and an evolving regulatory landscape,” Jim Rowan, applied AI leader and principal at Deloitte Consulting, said in a statement. “Our Q3 survey has revealed that now more than ever, change management and deep organizational integration are critical to overcoming barriers, unlocking value and building for the future of GenAI.”
Deloitte surveyed 2,770 executives – from directors up to the C-suite – across 14 countries for its 31-page report, “The State of Generative AI in the Enterprise: Now decides Next,” is based on a survey of 2,770 director- to C-suite-level respondents across 14 countries. Deloitte found that 67% said their organizations are increasing their generative AI investments due to the strong value it showed to this point. In addition, interest in the technology “high” or “very high” is among 63% of senior executives and 53% of board members. That said, those figures represent 11% and 8% declines, respectively, from the consultancy’s first-quarter survey.
It’s All About the Data
What’s drawing most of the executives’ attention is data. About 75% of organizations are growing their investments in data management due to generative AI, though as they try to scale their efforts, data-related issues are forcing 55% to avoid particular use cases. Companies need to modernize their capabilities when it comes to data, according to Deloitte. The concerns about data management range from using sensitive data in large language models (LLMs) and managing data privacy and security to complying with regulations and using their own proprietary data.
Steps are being made, the survey found, with 54% of organizations enhancing data security and 48% improving data quality practices. In addition, 45% are updating data governance frameworks or developing new data policies.
However, even as companies begin to move past POCs, they are still struggling to put the business value of their generative AI initiatives in context. About 41% struggle to define and measure the impact of their efforts, and only 16% have produced regular reports for their chief financial officers (CFOs) about the value being created. Going forward, top executives and board members will be less likely to invest in generative AI without such information and unwilling to throw at the technology based on unclear expectations and fear of missing out, the consultancy said.
“As organizations are scaling, and learning from, their GenAI pilots, I have heard the discourse around GenAI shift from unbridled excitement to a more nuanced and critical evaluation of its real impact on business outcomes,” Rowan wrote in the forward to the report.
Evaluating New AI Tools
He added that he’s also starting to see organizations investigate more tailored generative AI tools, including shifting from LLMs to small language models (SLMs) that more closely target their needs, and evaluating the use of AI agents and how they create new avenues for automation and personalization.
As businesses continue to mature in their use and understanding of the technology, regulatory considerations are arising. A past survey showed a strong appetite in the market for good regulation oversight of generative AI.
“Businesses and governments alike are navigating a dynamic landscape and are struggling to keep pace with the rate of technology innovation,” he wrote. “The challenge is to unlock the benefits of GenAI while facing regulatory uncertainty, orchestrating governance and building trust. No small task.”
Humans at the Center
Rowan also stressed the need for humans to be at the center of all decisions being made about generative AI, from creating value to managing risk. He wrote that it’s humans who decide how applications are conceived, developed, adopted and used, and how they’re managed for trust and security.
“In this, employee upskilling and change management remain indispensable elements of value-driving GenAI programs,” he wrote. “With a focus on business outcomes and human-centered change, I feel the future with GenAI grows brighter by the day, even as the journey ahead will continue to surprise and challenge us.”
