Artificial Intelligence & Machine Learning

Report: Generative AI Is a Key Driver for Business Growth

A recent global survey by Google Cloud found that generative AI is a key driver of business transformation. By incorporating AI into their operations, companies can achieve substantial financial returns, improve efficiency and sustain growth. For CEOs, the message is clear: Generative AI is essential for staying competitive in a fast-changing market.

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The report, "The ROI of Gen AI," is based on an online survey of 2,508 business leaders of global enterprises with more than $10 million in revenue. It provides a comprehensive overview of how gen AI influences business and financial performance.

"AI is delivering value for organizations that invest early and with a purpose," said Oliver Parker, vice president of AI at Google Cloud. "Technology leaders are harnessing metrics such as revenue growth, productivity and customer satisfaction to showcase the ROI that AI brings to their businesses. This value initially manifests in practical business applications such as customer service automation, search and summarization, fraud detection and supply chain optimization."

Key Insights

• Gen AI fuels financial growth. Seventy-four percent of enterprises using gen AI reported ROI within the first year, and 86% of those reported increased revenue of 6% or more.
• Gen AI helps companies keep pace with accelerating business needs. Eighty-four percent of organizations can move a gen AI use case from idea to production in less than six months, leading to faster time to value. This enables CEOs to see revenue increases within a year and significantly shortens the innovation cycle, enhancing agility in responding to market demands.
• C-level sponsorship maximizes gen AI's potential. Ninety-one percent of organizations with robust C-level support, which also reported increased revenue, estimated a revenue increase of 6% or more.
• Gen AI boosts productivity and business performance. Forty-five percent of organizations reported employee productivity at double or more due to gen AI, while 63% reported that it directly drove business growth. Also, 85% of those who reported improved user experience also reported a measurable improvement in user engagement.

Executive-Level Sponsorship

Organizations were able to move ahead in their AI projects and realize the benefits of gen AI primarily due to executive-level sponsorship. Strategic alignment with business goals was equally crucial.

"By connecting financial business drivers with technology drivers, organizations can ensure that AI strategies are not just innovative but also tightly intertwined with core business goals. This strategic alignment is key to escaping the dreaded 'pilot purgatory' and accelerating toward tangible business impact," said Carrie Tharp, vice president of global solutions and industries at Google Cloud.

While gen AI is a proven driver of ROI, widespread deployments remain a challenge, Parker said. Some companies have yet to embrace AI, often hesitating due to concerns related to costs, skills gap or disrupting the status quo.

"This is where executive-level sponsorship becomes a game changer. It elevates gen AI from a technology solution or even product to a strategic business asset, capable of addressing core organizational challenges and business priorities," Parker said. "Executive sponsorship signals a cultural shift, fostering an environment of experimentation and innovation that permeates throughout the company."

Recommendations

Gen AI is evolving rapidly. To ensure significant returns on gen AI investments within a short time frame, business executives should direct their organization to adopt an agile approach, prioritize high-impact use cases and stay informed of regional trends.

"For companies beginning on their gen AI journey, it's important to focus on specific use cases that demonstrate how AI can solve concrete business challenges," Parker said.

Parker encourages companies to start small with a pilot project that allows them to witness firsthand the value of AI before making a larger investment and scaling the production of additional use cases. Beyond immediate ROI, highlighting the long-term benefits of AI - such as future innovation, agility and competitiveness - is also important.

"In a year, it'll be fascinating to see how many new gen AI use cases are in play. Currently, 61% of executives are deploying gen AI, with at least one application in production. This number will likely grow as early adopters expand their use cases and new entrants come on board," Parker said. "Advances in AI technology will also pave the way for even more sophisticated applications that go beyond basic automation, sparking innovation and providing a competitive edge."