Three months after a prior survey of chief information officers, the latest data shows the majority of companies are not ready to put their generative artificial intelligence (Gen AI) into production, according to the new report by consulting giant Deloitte.
More than two-thirds of global corporate executives surveyed said that fewer than one-third of Gen AI experiments “will be fully scaled in the next three to six months,” states the report, entitled “Now Decides Next: Generating a New Future” and compiled by lead author Ranjit Bawa, Deloitte’s head of US strategy and the firm’s CTO.
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The report identifies institutional barriers that have arisen that block Gen AI deployment, including “regulatory uncertainty and risk management.” Among all the barriers to deployment, “Worries about complying with regulations” tops the list — the same factor that was at the top of the list a year ago.
Among those asked what has held back Gen AI in their organization, 38% cited the regulatory issue, up from 28% a year earlier.
Because of regulatory risk, and risks with compliance issues, “There is a speed limit” to AI deployment, states the report.
“Gen AI technology continues to advance at incredible speed,” Bawa and team relate. “However, most organizations are moving at the speed of organizations, not at the speed of technology,” the report finds.
“No matter how quickly the technology advances – or how hard the companies producing Gen AI technology push – organizational change in an enterprise can only happen so fast.”
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The regulatory issue, the report states, makes clear “respondents’ unease about which use cases will be acceptable, and to what extent their organizations will be held accountable for Gen AI-related problems.”
The study is the fourth quarterly report by Deloitte since the firm began conducting the study. The latest iteration was conducted in July through September, and received 2,773 responses from “senior leaders in their organizations and included board and C-suite members, and those at the president, vice president, and director level,” from 14 countries, including the US, UK, Brazil, Germany, Japan, Singapore, and Australia, and across industries including energy, finance, healthcare, and media and telecom.
The previous report, released over the summer, related that “70% of respondents said their organization has moved 30% or fewer of their generative AI experiments into production.”
It seems many companies are still struggling. The new report has strikingly similar findings: “Over two-thirds of respondents said that 30% or fewer of their current experiments will be fully scaled in the next three to six months.”
Although enterprises have seen “encouraging returns” on their initial AI investment, writes Bawa, they “have learned that creating value with Gen AI – and deploying it at scale – is hard work.”
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Companies are being tenacious in that struggle, but it’s going to take time.
“The vast majority of organizations we surveyed are taking a realistic perspective and showing sustained commitment in their quest for value from Gen AI,” the report relates. “However, it might be a multiyear journey for some organizations to reach full-scale deployment and achieve the ROI they are looking for.”
Some of the corporate functions that have seen the best ROI, Bawa and team note, are those that were prioritized for Gen AI implementation.
For example, “IT,” “operations,” and “marketing” are the three areas that are furthest along in Gen AI use. Also, IT and marketing each have seen ROI above expectations. Cybersecurity, the fifth-highest priority for Gen AI among survey respondents, has seen the greatest upside in ROI of all uses, the report notes.
As the report notes, “Relative to other types of advanced Gen AI initiatives, those focused on cybersecurity are far more likely to be exceeding their ROI expectations, with 44% of cybersecurity initiatives delivering an ROI somewhat or significantly above expectations versus only 17% that are delivering an ROI somewhat or significantly below expectations (a 27-point gap).
“On the other hand, with advanced Gen AI implementations in functions such as sales, finance, and R&D, more respondents reported ROI below expectations than reported ROI above expectations,” the report continues. “This suggests some challenges have yet to be overcome in those areas.”
Amidst the challenges, Bawa and team warn that many C-suite executives have been “cheerleaders,” trumpeting their company’s work in AI despite the slow progress.
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“Relative to leaders outside of the C-suite, CxOs tend to express a rosier view of their organization’s GenAI investments – and how easily and quickly GenAI’s barriers will be addressed and value achieved,” the report relates.
“It’s critical that CxOs move on from being cheerleaders to being champions for achieving organizational efficiency and market competitiveness.”
Despite the slow pace, Deloitte’s CTO is confident in the continued development, and ultimate deployment, of Gen AI.
“GenAI and AI broadly is our reality – it’s not going away,” writes Bawa.
Gen AI is ultimately like the Internet, cloud computing, and mobile waves that preceded it, he asserts. Those “transformational opportunities weren’t uncovered overnight,” he says, “but as they became pervasive, they drove significant disruption to business and technology capabilities, and also triggered many new business models, new products and services, new partnerships, and new ways of working and countless other innovations that led to the next wave across industries.”
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