Updated February 13th, 2024 at 16:05 IST
GenAI to have existential impact on businesses: EY Survey
The impact of generative technologies will be highest on customer experience at 89 per cent.
GenAI in India: Close to two-thirds, or 68 per cent of senior executives in Indian tech-services believe that Gen AI will have a high to existential impact on their businesses, as per an EY report.
The report comes on the backdrop of the technology services sector being stressed under global macroeconomic headwinds and a weak demand environment.
Additionally, the survey of 50 companies, as well as 10 interviews of CXOs reflects that GenAI’s impact will be highest in the area of customer experience at 89 per cent followed by innovation (66 per cent), cost reduction (48 per cent) and revenue growth (48 per cent), according to
“GenAI is a top investment priority for the CEOs and boards of Indian tech-services companies. However, since customer-spends on GenAI have been lower than anticipated over the last 12 months, some experts have declared that the technology’s potential may have been over-hyped,” Nitin Bhatt, Technology Sector Leader at EY India said.
The factors causing hindrance to GenAI adoption span anywhere from skills gap at 50 per cent to unclear use cases at 36 per cent, as well as inadequate focus on GenAI initiatives at 20 per cent.
The use cases of GenAI, leveraged to transform business models, enhance productivity, and reduce direct and indirect costs, can impact application development and support by 20 to 50 per cent, followed by 20-30 per cent for infrastructure and operations, 30-40 per cent for cloud migration and workload-modernisation, and 30-50 per cent for business process management.
For functions like sales and marketing, tech services can improve quality from 30 to 40 per cent, with 20-30 per cent for human resources, and 30-40 per cent for functions such as finance, legal and procurement.
However, the percolation of this technology has been slower than anticipated, with almost two-thirds of tech-services CXOs stating that their organisation’s readiness to leverage GenAI is low (16 per cent) to moderate (48 per cent).
“We expect a significant surge in GenAI-related spending over the next three years,” Bhatt added.
Nearly half, or 48 per cent of the respondents were concerned about data privacy, hallucination or fabricated answers (23 per cent), and biased responses (20 per cent) which can hold business back from implementing GenAI into operational processes.
Even as the CXOs agree collectively on the need of GenAI regulation, there is a difference in who should design and govern regulatory frameworks.
While 48 per cent of tech services companies believe that it should be the government, 25 per cent want industry associations to play the role of regulator for GenAI. Some 20 per cent of the respondents prefer self-regulation in this case.
Published February 13th, 2024 at 16:05 IST