Key points
- With generative AI tools taking the world by storm businesses are set to reap many efficiency benefits
- It is unlikely to completely replace roles, but streamline processes with quality control of outputs
- Data security and trust are the biggest challenges and a comprehensive management plan is key
Taking the tech world by storm since the launch of ChatGPT in November 2022, Generative AI (GenAI) refers to tools or algorithms that can create new content including code, written copy, audio or images – popular examples include ChatGPT, Midjourney, DALL-E and Bard. As discussed in a recent webinar led by Peter Lawrence, Partner of Pitcher Partners Newcastle and Ruth Callaghan, CIO of Cannings Purple, these tools have the possibility to positively impact a business’s output and productivity and are facilitating active change in the way some businesses operate. So what does this mean for the middle market?
What’s driving the change?
GenAI has democratised access to technology previously confined to larger businesses and opened the door to a slew of opportunities for businesses of all sizes to improve processes across the board.
The prevalence of such tools, and the rapid evolution of algorithm capability, has seen a swift uptake across many industries for a diverse range of purposes. 98% of Business Radar respondents state they are familiar with Gen AI tools, however just a third are actively engaging with such tools and only 10% are widely using it as part of their business. An inability to effectively operationalise these tools can see a business losing out on numerous benefits.
How are businesses using GenAI?
Customer service and support tasks, and back-office processes including performance management and internal communication dominate as the primary uses for Business Radar respondents. However, there is also a gap between expectation and reality in terms of how businesses expected to use these tools, and then how they were actually used. For example, 29% of respondents expected to use GenAI for innovation and product development, but only 10% are doing so. Be that as it may, businesses see little downside to implementing GenAI tools, with most respondents believing GenAI to have a moderate to significant positive impact on businesses and processes looking into the future.
However, given that content generated from GenAI tools is not foolproof and has been shown to provide inaccuracies, it is unlikely that we will see an uptake in high-risk sectors such as medicine or defence. Furthermore, GenAI tools are unable to provide reason or evidence to support provided answers, making it less useful in professional services such as law or finance where evidence to support a decision is critical.
How does GenAI impact businesses? What are the benefits
Businesses see the impact from GenAI as largely rosy, with improved efficiencies thanks to streamlined processes leading to a reduction in stress and burnout of employees. Contrary to initial fears, GenAI is unlikely to completely replace roles, but rather streamline processes that are repetitive or easily templated, freeing up time for staff to focus on strategic tasks. This also helps address an issue highlighted in Business Radar 2022 where 68% of respondents cited lack of time as the main impediment to dedicating resources to business strategy.
Streamlined operations can also allow businesses to develop new and improved products and services, which can benefit a business’s bottom line. The capabilities within the suite of GenAI tools means that business operations across the board, from marketing to customer service and human resources, can be improved. Subsequent upskilling of staff and pivoting of resources may be required as parts of their jobs are allocated to GenAI tools to maximise business efficiency. In some cases, training may include learning how best to utilise GenAI tools and crafting the right questions or inputs to get the most beneficial outputs.
What does an effective use of GenAI look like for businesses?
Many businesses are wondering if there is an effective use case for them when considering GenAI. While the uses can be broad, from a middle market business perspective, effective uses can include:
- Repetitive work: Anything that has standardised components or operating procedures that can be templated or easily replicated such as agendas, briefing notes, standardised reports or summaries
- Repurposed work: Anything that requires repurposing existing content into a different format, such as converting a report into a summary, a structured table or some social media post
- Would-if-I-could-work: Aspirational work that a business may lack the time or resources to do such as scenario planning, videos, engaging content, or better design
While GenAI is good at many things, it’s also not so good in some areas. For example, it should not be used for tasks that rely on maths, facts or delivery of consistent results – as a tool drawing from a finite knowledge base, answers may not always be accurate. Businesses should avoid using GenAI like Google as the generated answers can evolve over time, or may be informed by biased data to begin with. GenAI should also not be used for tasks that are only meaningful when a human does them and requires a level of emotional intelligence – for example tactful work such as conveying distressing news, writing emotional content or making risky decisions.
Embracing GenAI as a business, and how to manage challenges
Understandably, data security and privacy ranks as one of the biggest challenges to implementing GenAI as part of business processes. Trust and accuracy of the outputs was the second biggest concern identified by Business Radar respondents and presents as the biggest barrier to businesses taking the leap to implementing these tools. For those actively using GenAI, the biggest challenge lies in the cost associated with maintaining the systems within the business – integrating the specialist system, employing data engineers to ensure data privacy, and investing in appropriate security tools can all add up.
It may be tempting to take a head in the sand approach and ignore the growing groundswell. But businesses that take a smart and considered approach to GenAI tools can see many benefits that help to give a competitive edge. An effective GenAI approach includes:
- Building knowledge: get to know the GenAI tools, consider which will support business goals and consider investing in ‘private’ tools over the free public iterations for added security.
- Governing use: identify appropriate use cases, build a policy around usage and implement vetting processes for outputs.
- Training people: Communicate appropriate uses, and the benefits and pitfalls of GenAI, ensuring the data risks have mitigation strategies in place.
- Managing change: Prepare the business for the impact on the processes and culture, have a rollout plan and communicate every step of the way.
What to do next
You can learn more by watching the recent webinar, or if you have questions about how GenAI can impact your business, reach out to a Pitcher Partners expert today.
