Artificial Intelligence Machine Learning

Regardless of AI ambitions, Gartner research indicates that GenAI requires a greater tolerance for immediate return on investment (ROI) versus the quality of indirect, future financial investments.

Of all projects currently being launched in generative artificial intelligence (GenAI), about 30 percent will be dropped by the end of 2025, citing poor data quality, inadequate risk controls, rising costs or unclear There are issues like business value. According to a Gartner report.

“After the hype of the past year, executives are eager to see returns on GenAI investments, yet organizations struggle to prove and realize value. As initiatives continue to expand, However, the financial burden of developing and deploying GenAI models continues to increase,” said Rita Salam, Distinguished VP Analyst, Gartner.

A major challenge for organizations is justifying the substantial investment in GenAI to increase productivity, which can be difficult to translate directly into financial benefit, the report said.

While many organizations are leveraging GenAI to transform their business models and create new business opportunities, these deployment methods come with significant costs, ranging from $5 million to $20 million, the report said. including up to

“Unfortunately, one size fits all with GenAI, and costs are not as predictable as with other technologies,” Salam said.

“What you spend, the use cases you invest in and the deployment methods you take all determine cost. Whether you’re a market disruptor and want to infuse AI everywhere. , or you have a more conservative focus on productivity gains or enhancing existing processes, each with different levels of cost, risk, variability and strategic impact,” he added.

Regardless of AI ambitions, Gartner research indicates that GenAI requires a greater tolerance for immediate return on investment (ROI) versus the quality of indirect, future financial investments.

“Historically, many chief financial officers (CFOs) have not been comfortable investing today for indirect value in the future. This reluctance can skew investment allocation toward tactical versus strategic outcomes,” the report said. said

The research also states that early adopters of GenAI across industries and business processes are reporting a range of business improvements that vary by use case, job type and worker skill level. .

According to a recent Gartner survey, respondents reported a 15.8 percent increase in revenue, 15.2 percent cost savings and an average productivity improvement of 22.6 percent.

“This data serves as a valuable reference for estimating the business value derived from GenAI business model innovation, but it is important to acknowledge the challenges in estimating this value, as the benefits are very company-wide, Case-specific and workforce-specific. Often, the impact may not be apparent immediately and may become apparent over time. However, this delay does not diminish the potential benefits,” Salam said.

First Publication: 29 July 2024 | 7:01 p.m I.S



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