Around 68% of Chief Experience Officers (CXOs) at Indian technology services companies believe that generative artificial intelligence (Gen AI) will have a high, even existential, impact on their businesses, a new survey by global consultancy EY has revealed . The study, conducted from November to December 2023, covered 50 small, mid and large cap companies, including information technology and business process management companies.
According to the survey, CXOs anticipate the biggest impact of the AI generation in the area of customer experience, with 89% of respondents highlighting this aspect. Close behind are innovation (66%), cost reduction (48%) and revenue growth (48%). Despite these positive expectations, 64% of CXOs say their organization’s willingness to leverage Gen AI is currently rated as “very low” to “moderate.”
The study emphasizes the transformative potential of AI generation, illustrating its ability to reshape business models, increase productivity and reduce direct and indirect costs. EY findings suggest a substantial increase in value in delivery-related areas, ranging from 20-50% for application development and support to 30-50% for business process management. Internal support functions within technology services companies are also expected to benefit, with a potential increase in value of 30-40% for sales and marketing, 20-30% for human resources, and 30-40%. % for functions such as finance, legal and purchasing. .
Despite Generation AI’s promise to unlock opportunities for innovation, revenue growth, and improved customer and employee experiences, implementation of this technology on the ground has been slower than expected.
CXOs cite lack of skills as the top barrier (50%) to Gen AI adoption, followed by unclear use cases (36%) and challenges in converting pilots into full-scale engagements. production. Concerns also arise about customer hesitancy due to issues such as inaccuracy, misinformation, bias, ethics and intellectual property protection. Data privacy (48%), hallucinations or fabricated responses (23%), and biased responses (20%) are identified as key risks as organizations consider integrating Gen AI into their operational processes.
The evolving and uncertain regulatory environment surrounding the AI generation poses challenges for technology services companies, requiring them to build trust with their customers. Although there is consensus among CXOs on the need for regulation of the AI generation, opinions differ on who should design and govern the regulatory framework. Forty-eight percent think it should be government, 25% prefer industry associations, and 20% argue for self-regulation.
Nitin Bhatt, Technology Sector Leader at EY India, highlighted that despite the decline in client spending on Gen AI over the past year, the study indicates continued engagement with technology services companies for various strategic projects. Bhatt anticipates a significant increase in AI generation spending over the next three years as the technology matures and establishes trust by design through compliance, security and ethical safeguards.
A recent study by Infosys Knowledge Institute, released on January 27, predicts a substantial increase in Gen AI spending by Indian companies. Over the next 12 months, these companies are expected to increase their investments in generation AI by almost 165%, to a total of $386 billion. The study, released on Saturday, also indicates that companies in the Asia-Pacific region are poised to nearly triple their investments in generation AI, to $3.4 billion in 2024, as reported by the research arm from Infosys.
In another study conducted earlier this month, online graphic design tool Canva found that more than 90% of surveyed chief innovation officers believe that integrating AI can significantly improve both their own role and the experience of their employees. Additionally, 93% of these agents plan to increase their budget for investments in AI applications, and more than half of them are aiming for a 50% budget increase. However, the study reveals that more than 50% of respondents consider access to IT talent and data security as the top two challenges to successful AI integration.
