GenAI requires a shift from digital transformation to business transformation

A new crop of AI-first companies are reimagining how businesses operate, creating a gap between more traditional companies and risk-averse ones.

2025 is the year all companies need to get serious about generative AI and AI-first business transformation. With 89% of aspiring CEOs ranking genAI and AI as top technology priorities in 2024 and 85% of ambitious leaders saying they will increase technology spending to increase competitiveness, it appears that the transformation of AI-led business can grow where it falls short. – the advents of digital transformation were interrupted. However, 90% of more traditional leaders are cautious, limiting experimentation and waiting for genAI to move beyond advertising. This could accelerate a competitive gap between AI-inspired companies and everyone else.

Now, there are two distinct camps in how large enterprises approach generative AI investments. Beyond the basics, one group is more entrepreneurial, exploring the ways generative artificial intelligence impacts business and operating model transformation. These fast movers recognize AI as an investment in competitiveness and innovation. The other group is taking a more observant and cautious approach, evaluating where genAI can make incremental improvements to business as usual before considering bolder transformation projects.

One group is already behind.

Wait and See approach

According to a recent BCG report, slow movers are deliberately dragging their feet,

with 90% of executives expecting GenAI to go beyond noise. Two-thirds of all executives surveyed believe it will take at least two years for AI and genAI to move beyond the noise. And 71% of companies are focused only on limited experiments and small-scale pilots. Only 6% of companies have begun to improve employee skills to work with AI in a meaningful way. And 45% of executives say they still have no guidelines or restrictions on using AI and GenAI at work.

Where are large enterprise companies in their AI transformation?

Scale AI, a startup that helps high-tech companies improve the data used to build artificial intelligence products, released a report called “Zeitgeist” that studies corporate AI readiness. In his research, he discovered the disruptive nature of ChatGPT and genAI in general. Only 20% of companies are developing an AI strategy in 2024. Scale also found that 74% of companies see AI as very critical to their business over the next three years. But only 38% currently have some level of genAI model in production.

It’s still early days for GenAI Investments

Of the large companies exploring opportunities with genAI, 26% are developing their first AI model/application and 25% are still evaluating use cases. Those companies that deploy models ensure that use cases align with business objectives.

Fundamental challenges in adopting AI technologies

Given the widespread exploration of AI-generating tools by businesses and consumers alike, leaders would benefit from starting with an in-depth look. Even in its current form, generative AI is disruptive to business as usual. The challenges and reasons listed by today’s executives threaten to widen the gap between fast-moving and slow-moving companies. But as Marie Forleo’s mother would say, everything is ‘definable’. This starts with a mindset shift to see that AI creates white space.

Key challenges in adopting GenAI:

1. 61%: The available infrastructure, tools or solutions do not meet my needs
2. 54%: Insufficient budget
3. 52% Data and privacy concerns
4. 47%: Uncertain ROI
5. 42%: Difficulty attracting and retaining talent

Top reasons not to adopt GenAI:

1. 28%: Security/data concerns
2. 26%: Lack of expertise
3. 22%: Other initiatives have priority
4. 21%: Waiting for AI technology to mature
5. 18%: Lack of budget
6. 15%: Traditional technology meets the needs
7. 13%: No applicable use cases
8. 11%: No executive support

AI investments focus on productivity gains and process optimization

Companies that are investing in AI are exploring a wide spectrum of use cases that increase human productivity while automating and optimizing legacy processes.

According to the companies that participated in the Scale AI research, the main areas of implantation include:

1. 65%: Computer programming/developer tools
2. 58%: Content generation
3. 56%: Data analysis tools
4. 55%: chatbot with customers
5. 47%: Process automation
6. 47%: Knowledge Management/Employee Copilots
7. 40%: Summary, report generation
8. 25%: Recommender systems

Companies that focus further on executive and employee augmentation will ultimately unlock opportunities for business innovation, transformative strategies and the ability to create new net value.

The ROI of GenAI has major business and operational impacts

Those companies investing in genAI models are already reporting positive results. And these positive results reflect a spectrum of investments that balance acquisition and cost control with innovative ventures in creating new value.

• 62% report the efficiency of the organizational process
• 59% see improved customer experience.
• 47% are increasing their ability to develop new products or services
• 43% report improved functionality of existing products or services
• 40% achieve better collaboration across business functions and silos
• 34% credit genAI with strategic decision-making optimization and the same percentage reports profit and ROI

Fast Movers Balance Innovation and Iteration

Although generative AI is new and AI in all its forms is still evolving, asking new questions will lead to different answers. And as a result, new opportunities will be discovered that will reshape how AI-first businesses transform versus those that see AI as a tool for increased productivity and only process optimization gains.

The way I describe the difference between replication and innovation is rooted in results. While AI is new to many organizations, it may seem like a novelty simply because it is new. But in practice, iteration is doing what we did yesterday, better, faster, more efficiently, less expensively, at scale.

BCG recognized that fast movers exhibit several characteristics that set them apart from their late counterparts.

1. Fast movers invest in productivity and top-line growth, with half estimating more than 10% in cost savings. These executives also reinvest savings in the business to create new revenue streams and drive new growth.

2. Fast movers are upgrading teams to use AI effectively, and also identifying opportunities for augmentation, where new roles are created to help employees perform tasks that weren’t possible before. In fact, BCG estimates that almost half of the organizational workforce will need to be retrained in GenAI over the next three years. Companies report that only 1-10% of workers are currently trained in genAI tools. Leading companies have three times as many AI-qualified full-time employees as their laggard counterparts.

Executives also need training, with AI demonstrating an increasing capacity to reason, analyze and make informed decisions. A study by EdX, an online learning platform created by administrators at Harvard and MIT, featured insights from CEOs on their views on the impact of AI. The answer was clear with 47% of executives stating that most or all of the CEO role should be fully automated or replaced by AI.

3. Fast movers are cost and ROI conscious. Although cost is a prohibitive factor for all companies, genAI represents an opportunity to deliver cost savings and generate new net income.

4. Fast movers build strategic relationships. BCG research found that only 3% of executives consider pre-existing partnerships a priority when evaluating AI solutions. This means that top executives are exploring new partnerships that can help them access the most advanced solutions that help them achieve more valuable results by creating new value.

5. Fast movers are aware of responsible AI principles. Being aware of security, ethics and governance increases security and trust. According to BCG, organizations whose CEOs participate in RAI initiatives realize 58% more business benefits than those whose CEOs are not involved.

6. Fast movers reshape critical processes and functions. Business as usual is rooted in the trap that we assume today’s work is tomorrow’s foundation because that’s how it’s been done before. AI automates effective processes to make them more efficient and rethinks efficient processes to make them more effective. Additionally, AI can help augment human capacities to perform new jobs that reshape how companies achieve existing and new results.

7. Hire a Chief AI Officer or appoint an AI transformation leader to navigate the complexities of balancing AI business transformation. The growing list of companies creating this role includes the US Department of Justice, the United Nations, eBay, WPP and NASA. The Financial Times (FT) recently described the role of CAIOs as leaders who “oversee the deployment of AI and generative AI within an organization: improving workforce efficiency, identifying new revenue streams and mitigating risks ethical and safety”.

The transformative potential of generative AI is obvious, but realizing its promise requires more than just recognition and observation; it requires bold vision, decisive action and unwavering commitment. As leaders, it is up to us to embrace this technology not just as a tool for incremental improvement, but as a catalyst for deep innovation.

In the journey to an AI-first future, we find ourselves at a crossroads, where the path chosen today will determine the trajectory of tomorrow.

The fast movers are already moving forward. Their willingness to reimagine their business in an age of AI is setting a new standard for what is possible. Those still on the fence need to shift their mindset to recognize AI as an unparalleled opportunity to redefine their competitive advantage, increase productivity and open new avenues for growth. The future is not something we walk into; it is something we create.