Despite Increased Investment and Early Enthusiasm, Data and Risk Remain Key Challenges to Scaling Generative AI, Reveals New Deloitte Survey

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Aug 20, 2024, 08:30 ET

NEW YORK, Aug. 20, 2024 /PRNewswire/ --

Key takeaways

Generative AI (GenAI) adoption has reached a critical phase, with two-thirds of respondents (67%) reporting their organization is increasing its investment in GenAI due to strong value to date.
Despite increasing expectations for transformational impact, data, scaling and risk challenges are limiting options and tempering leadership enthusiasm.
Demonstrating the value of GenAI deployments to the C-suite will be critical for continued investment as a majority (54%) of organizations are seeking efficiency and productivity improvements, yet only 38% are tracking changes in employee productivity.

Why this matters
The Deloitte AI Institute™ today unveiled the third quarterly edition of its State of Generative AI in the Enterprise report, revealing the current landscape of GenAI adoption and deployment and how organizations are overcoming barriers to create value at scale. "The State of Generative AI in the Enterprise: Now decides Next," is based on a survey of 2,770 director- to C-suite-level respondents across 14 countries. While respondents have a range of self-reported levels of Generative AI expertise, all are experienced with AI and are piloting or implementing Generative AI in their organizations.

Key quotes
"As promising experiments and use cases begin to pay off, it's clear that we have arrived at a pivotal moment for Generative AI, balancing leaders' high expectations with challenges such as data quality, investment costs, effective measurement and an evolving regulatory landscape. Our Q3 survey has revealed that now more than ever, change management and deep organizational integration are critical to overcoming barriers, unlocking value and building for the future of GenAI."
— Jim Rowan, Applied AI leader and principal, Deloitte Consulting LLP

"We are seeing continued enthusiasm for GenAI across organizations, and leaders are deriving the most value from the technology by deeply embedding it into critical business functions and processes. Our research indicates that the top benefits of GenAI are extending beyond improved efficiency, productivity and cost reduction, with more than half pointing to increased innovation, improved products and services, enhanced customer relationships and other types of value. The diversity of these value sources underscores the immense potential and versatility of this transformative technology."
— Costi Perricos, Generative AI leader, Deloitte Global

Excitement is being tempered by reality — and value-led use cases will lead to successful scaling
Survey respondents say that while their senior executives and board members are still intrigued by GenAI, there are signs of enthusiasm beginning to wane as the "new technology" shine wears off. Interest remains "high" or "very high" among most senior executives (63%) and boards (53%); however, those numbers have declined since the Q1 2024 survey, dropping 11 percentage points and eight percentage points respectively. While selecting and quickly scaling the GenAI projects with the most potential to create value is the goal, many GenAI efforts are still at the pilot or proof-of-concept stage, with a large majority of respondents (68%) saying their organization has moved 30% or fewer of their GenAI experiments fully into production.

Executives are zeroed in on data lifecycle management as a foundation for GenAI deployments
Data is taking center stage for AI-savvy leaders, with 75% of organizations increasing their technology investments around data management due to GenAI. However, as enterprises look to scale, unforeseen roadblocks were exposed— with data-related issues causing 55% of surveyed organizations to avoid certain GenAI use cases. Solving for data deficiencies has emerged as a crucial step in addressing the GenAI-specific demands of data architectures. To modernize their data-related capabilities, organizations are enhancing data security (54%); improving data quality practices (48%); and updating data governance frameworks and/or developing new data policies (45%).

Struggles with trust and a shifting regulatory landscape are causing many to walk a tightrope — minimizing risk without being too risk-averse
Although respondents recognized that managing GenAI risk is critical, three of the top four reported barriers to successful GenAI deployment are risk-related, including worries about regulatory compliance (36%); difficulty managing risks (30%); and lack of a governance model (29%). Likely driving these concerns are risks specific to GenAI, like model bias, hallucinations, novel privacy concerns, trust, and protecting new attack surfaces. To help build trust and ensure responsible use, organizations are working to build new guardrails and oversight capabilities. The top actions organizations are taking include establishing a governance framework for using GenAI tools and applications (51%); monitoring regulatory requirements and ensuring compliance (49%); and conducting internal audits/testing on GenAI tools and applications (43%).

Amid continued experimentation there is a growing need to demonstrate the value of GenAI initiatives
While surveyed organizations are beginning to scale past proof-of-concept, 41% have struggled to define and measure the exact impacts of their GenAI efforts and only 16% have produced regular reports for the CFO about the value being created with GenAI. As applications and use cases mature, leaders will be less inclined to invest based solely on lofty visions and the fear of missing out — making measurement a critical factor in maintaining interest and support from the C-suite and boardroom. To demonstrate value, organizations are using specific KPIs for evaluating GenAI performance (48%); building a framework for evaluating GenAI investments (38%); and tracking changes in employee productivity (38%).

About "The State of Generative AI in the Enterprise"
This is the third in a series of quarterly surveys intended to track the adoption of GenAI in the enterprise. This research builds from Deloitte's previous "State of AI in the Enterprise" report which has been running for six years. This wave of the survey, conducted between May and June 2024, connected with 2,770 AI-savvy business and technology leaders directly involved in piloting or implementing Generative AI at major organizations across 14 countries and six industries: consumer; energy, resources and industrials; financial services; life sciences and health care; technology, media and telecom; and government and public services.

About Deloitte
Deloitte provides industry-leading audit, consulting, tax and advisory services to many of the world's most admired brands, including nearly 90% of the Fortune 500® and more than 8,500 U.S.-based private companies. At Deloitte, we strive to live our purpose of making an impact that matters by creating trust and confidence in a more equitable society. We leverage our unique blend of business acumen, command of technology, and strategic technology alliances to advise our clients across industries as they build their future. Deloitte is proud to be part of the largest global professional services network serving our clients in the markets that are most important to them. Bringing more than 175 years of service, our network of member firms spans more than 150 countries and territories. Learn how Deloitte's approximately 457,000 people worldwide connect for impact at www.deloitte.com.

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SOURCE Deloitte LLP