TAKEAWAYS
A DEEP DIVE ON GENAI Rapidly evolving generative AI technology is making waves across all facets of business—and the supply chain is high on that list. Supply chain and logistics leaders are working overtime to learn to harness the power of GenAI and determine how to implement it across their organizations at speed and scale.
within two years. However, concerns loom as 52% caution against overemphasizing productivity, citing potential negative impacts on the employee experience. 3 Quality data is the linchpin for the successful deployment of GenAI initiatives. Organizations are challenged with several hurdles, including data quality and strategy. Notably, there’s a hesitancy around data sharing, with only 16% of enterprises using their proprietary data, underscoring the urgent need for a robust data strategy. 4 Embrace GenAI’s transformative power, but don’t lose sight of the human element. Bridging the talent divide is crucial, as 36% of executives report a scarcity of skilled professionals. Finding the balance between technical and business skills will be vital. However, in the short term, technical skills gain importance. 5 Enterprises need an ecosystem for GenAI success, but current time- and material-driven engagement models will be rendered useless in the AI era. Executives emphasize the need for a diverse ecosystem, highlighting the importance of partnerships that support talent acquisition and skill development. Additionally, 80% recognize the need to transition to performance- and purpose-driven commercial models with partners to capitalize fully on GenAI’s potential.
To gain deeper insights into GenAI’s long-term value and the risks of overemphasizing immediate outcomes such as productivity improvements, HFS Research, in partnership with Genpact, a global professional services firm, surveyed 550 senior global executives, including many in supply chain roles. Here are five key findings: 1 Most enterprises are early in their GenAI journeys but are placing big bets. Despite only 5% of enterprises having mature GenAI initiatives, a significant majority are gearing up for a technological transformation. Approximately 61% of executives are dedicating up to 10% of their tech budgets to explore and expand GenAI capabilities. 2 Executives view GenAI as a catalyst for creating new value within two years but caution against overemphasizing productivity. 74% of executives anticipate GenAI will be a springboard for value creation, driving not only productivity gains, but also customer satisfaction, revenue growth, and a competitive edge—all expected to materialize
Investing in GenAI: Most respondents are shifting funds to GenAI from other sources, including IT infrastructure, software development, and research and development.
Q1: Source of GenAI investments
Q2: Shifted budget source
IT infrastructure
51%
Shifting funds from other resources or investments
51%
Software development
43%
Research and development
38%
Using additional dedicated budget allocated for GenAI
50%
Marketing and advertising
35%
Training and talent development
29%
From the predicted savings generated by GenAI in operations
42%
People costs
28%
Other technology investments
28%
Seeking external funding or partnerships
25%
Not sure 4%
Q 1. How are you funding your GenAI investments? Q 2. Where are you shifting funds from to invest in GenAI?
Source: HFS Research in collaboration with Genpact 2024
August 2024 • Inbound Logistics 19
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