Deloitte Report: Organizations Get Real About Scaling Generative AI

As a small business entrepreneur, I always look to see what the trends are from those companies that have a significant budget and sufficient resources. In this case, I’d like to share with you the latest information from Deloitte(1). 

Deloitte has been closely examining the implications and development of generative AI through their “State of Generative AI in the Enterprise” series. Their reports from 2023 and 2024 provide insightful overviews into how businesses are adopting and adapting to this technology. Here are some key findings from their most recent reports:

Key Findings from the First Wave (Q1 2024)

• High Expectations for Transformation: The first wave of the survey, conducted between October and December 2023, found that 79% of respondents expect Gen AI to drive substantial organizational transformation within less than three years.
• Focus on Efficiency and Productivity: While there is a strong focus on tactical benefits like improving efficiency (56%) and cost reduction, strategic areas such as innovation (29%) and uncovering new ideas (19%) are currently lower priorities.
• Early Gen AI Experts Leading the Way: Among respondents, 44% believe they have “high” or “very high” expertise in Gen AI. The 9% with “very high” expertise are already integrating Gen AI into their products and are more likely to use Gen AI across business functions.
• Challenges and Opportunities: The survey highlights a need for increased collaboration, trust, education, and reskilling to manage the transformative impact of Gen AI effectively.

Insights from the Second Wave (Q2 2024)

• Rapid Adoption and Scaling: The second wave of the survey, conducted between January and February 2024, indicates that nearly half (47%) of all respondents are moving fast with their Gen AI adoption. For those with very high expertise, this figure rises to 73%.
• Organizational Change and Talent Strategies: Nearly three-quarters of organizations are looking to change their talent strategies in the next two years due to Gen AI. This includes altering work processes and focusing on upskilling and reskilling.
• Trust and Risk Management: Lack of trust in AI output quality and worker concerns about job disruption are major barriers to scaling. Leading organizations recognize the importance of building trust through transparency, familiarity, technology and guardrails. 60% reported balancing rapid integration with risk mitigation, and 72% said trust in AI has increased since it emerged in 2022. Despite rapid adoption, only 36% of organizations are measuring trust and engagement with Gen AI. Less than half are focused on creating trust in Gen AI to a large extent. 
• Technical Talent and Skills: A lack of technical talent and skills is identified as the number-one barrier to achieving AI goals at scale. Almost 40% of organizations plan to increase headcount to support their Gen AI initiatives. 75% expect generative AI to impact their talent strategies within two years, with process redesign and upskilling as the most common responses. The technology is predicted to increase the value of data analysis, creativity, critical thinking and flexibility, while decreasing the value of certain other skills. Surprisingly, more organizations expect AI will increase headcount vs decrease it in the short-term.

From Potential to Performance

The findings of the latest report underscore 2 important transitions: (1) organizations are now moving from experimenting with AI to integrating it deeply into their operations. This shift is not merely about technological adoption but about fundamentally transforming how businesses operate, innovate, and deliver value to customers. And (2) the tangible realization of AI’s potential. While many organizations initially focus on the efficiency and productivity gains that AI promises, the real story is about the strategic reinvestment of these gains. As AI streamlines operations and reduces costs, the question becomes: how should businesses reinvest these resources?

Deloitte’s insights suggest that organizations are using their newly freed resources on the following areas that foster long-term growth and innovation. :

1. Enhancing Customer Experience: By leveraging AI to understand and predict customer needs better, businesses can create more personalized, engaging customer interactions. This not only improves customer satisfaction but also drives loyalty and revenue growth.
2. Fostering Innovation: AI-generated insights and efficiencies provide businesses the bandwidth to explore new markets and innovate products. This can lead to the development of new revenue streams and a stronger competitive position in the market.
3. Upskilling Employees: With routine tasks automated, employees can focus on higher-value activities. Organizations are investing in training and development programs to help their workforce tackle more complex problems and lead AI-driven initiatives.
4. Strengthening Data Security: As IT and cybersecurity are at the forefront of AI adoption, reinvesting in these areas ensures that businesses can safeguard their operations from emerging threats, thus maintaining trust and compliance.

What does this mean for you?

As a small business owner, you’re probably still trying to figure out what to do with AI – beyond writing blog posts or editing emails. Based on our experience with clients over the past 6 months, the time to get AI involved in your business is right now. Here are a couple of suggestions for you from the report:

Use AI to Building a Future-Ready Workforce

The Deloitte report also highlights an important trend: the evolving workforce dynamics in the age of AI. As AI tools become more prevalent, the skills required to manage and maximize these tools are becoming more sophisticated. Forward-thinking organizations are not just recruiting top talent but are also focusing on reskilling their current employees. This dual approach ensures that their workforce can effectively use AI tools to drive business outcomes and adapt to future technological advancements.

Create Strategic Operations and Continuous Improvement

Another significant insight from the report is the application of AI in strategic operations. Companies are using AI to simulate business scenarios and optimize processes. This not only leads to immediate efficiency gains but also helps in fine-tuning long-term strategies. The continuous feedback loop enabled by AI means businesses can quickly adjust their strategies in response to changing market conditions, maintaining agility and resilience.

Final Thoughts…

The Deloitte Q2 2024 report paints a compelling picture of the current state and immense potential of generative AI in business. 

For small businesses especially, the key takeaway is clear: the strategic reinvestment of time and cost savings unlocked by AI is crucial. It’s not just about saving money or time—it’s about using these resources to fuel innovation, enhance customer relationships, empower employees, and secure business operations.

As we continue to navigate these exciting developments, it is essential to keep learning and adapting. The future belongs to those who can blend the power of AI with the ingenuity of human creativity to create not just a more efficient but a more insightful, resilient, and customer-centric business. If you’re ready to explore how AI can transform your operations and strategies, I’m here to help guide you through this journey. To conveniently schedule a call, please visit InsightDriven.Business Schedule. Thanks, and I hope to talk with you soon!

_________________

(1) Deloitte is the largest professional services network in the world by revenue and number of employees, with reported revenues of US$64.9 billion in 2023 and approximately 457,000 employees globally. As a consultant, they help to shape business strategies and technological advancements across various industries. Moreover, Deloitte has established dedicated institutes like the Deloitte AI Institute, which focuses on the development and application of AI technologies