Organizations should depend on a combination of People and Processes, accounting for 70%, to effectively carry out a GenAI transformation!
Nicolas BEHBAHANI
Global People Analytics & HR Data Leader - People & Culture | Strategical People Analytics Design
🦾 Currently, companies that integrate Generative AI into their daily operations are experiencing productivity increases of 10-15%.
⚠️ Over 2/3 of AI transformations fall short of expectations in terms of time, budget and meeting ambition.
📈 Over 50% of executives with the highest AI maturity companies that were first to scale GenAI expect to see a return of more than double their investment in the next year.
💡 Enhance productivity by implementing 'deploy' and 'reshape' strategies to elevate the company, particularly within predominantly people-centric organizations.
Organizations are reshaping their support functions with AI, particularly in HR, to streamline talent sourcing and improve the hit-rate of top candidates, as well as to enhance employee satisfaction with augmented HR services, according to a new interesting research published by Boston Consulting Group (BCG) using data 📊 from over 1,000 AI programs in the past year.
✅Three pillars for successful (Gen)AI transformation
Researchers have established the 10-20-70 rule for a successful General AI transformation, which advises allocating:
1️⃣ 10% of AI efforts to algorithms:
The development of new algorithms and the science that powers them is crucial: AI models are expected to expand in size and capability over the next three to five years, providing a broader array of choices for balancing performance requirements and costs.
2️⃣20% to the underlying technology and data:
Deploy the tech stack and ensure the right data feeds into the right systems
3️⃣ The majority, 70%, to people and processes:
Drive change management and other processes related to people
✅The‘10-20-70’ during a AI transformation
Researchers noticed that change is hard, and executives face challenges across the ‘10-20-70’ during their AI transformation.
They identified the foremost challenge in each category:
❌ Algorithms:
• Trouble reaching sufficient accuracy and reliability of models
• Difficulty ensuring security and compliance of the technology
❌Tech & Data:
• Difficulty integrating new AI technology with existing IT systems
• Lack of access to high-quality data for model training
• IT cost constraints limiting sufficient investments into (Gen)AI
• Difficulty realizing cost takeout/savings
❌ People & processes:
• Challenges prioritizing AI opportunities when compared to other company-wide concerns (e.g., cost reduction initiatives)
• Issues with assigning a target ROI for identified opportunities
• Insufficient (Gen)AI literacy throughout the organization
• Lack of specialized (Gen)AI engineers in the market
• Resistance, opposition, and fear about AI impacting jobs
• Lack of accountability & measurement of set KPIs (e.g., adoption, value realized)
• Challenges with implementing new processes and reimagining workflows
✅Three complementary strategic plays
Recommended by LinkedIn
Researchers have identified three strategic initiatives that are key to driving value and accomplishing comprehensive enterprise transformation:
➡️ 'DEPLOY' utilizes off-the-shelf tools to boost workforce productivity by 10-15%, improve employee satisfaction, and generate excitement for broader AI change in the organization.
Examples of 'Deploy' :
• Meeting summary
• Code development
• Calendar management
• Invoice reconciliation
➡️ 'RESHAPE' allows for re-imagination of functions through workflow re-engineering, to drive 30-50% improvements in efficiency, effectiveness across affected functions.
Examples of 'Reshape':
• Design and Engineering
• Marketing
• Customer Service
• Technology
➡️ 'INVENT' leverages AI to expand revenue streams and "invent before getting disrupted" by introducing new offers, services, and experiences to the mark.
Examples of 'Invent':
• Hyper-personalized customer experience
• AI-powered services/products
• Data monetization across value chain
• Insights and innovation platform
Finally, researchers offer the following recommendations for leaders to begin their journey with AI:
✔️ Understand your starting point: Identify the largest opportunities for action & benchmark AI maturity against peers. Assess the potential for total productivity impact across your workforce
✔️ Prioritize few high value initiatives: Select 3-5 functions/processes for 'DEPLOY', 'RESHAPE', & 'INVENT' plays. Setup transformative efforts & resource adequately; target ~2-3x return on investment
✔️ Upskill & scale broadly: Embrace AI tools in daily work, upskill the workforce, & scale initiatives broadly. Remember that this is a people transformation not a tech transformation
✔️ Fund the journey: Optimize tech/digital costs in the first 6-12 months by centralizing resources, rationalizing legacy applications, and reducing third-party spend. Prioritize & refocus portfolio on value creating initiatives
✔️ Invest in foundational capabilities: Build capabilities that will drive & sustain transformation (e.g., tech, people, RAI). Improve the quantity/quality of data – it will be a competitive advantage long-term
✔️ Launch an AI governance structure: Develop a structure that allows for broad but controlled experimentation. Operate according to RAI framework while maintaining focus on prioritized initiatives
☝️ 𝙈𝙮 𝙥𝙚𝙧𝙨𝙤𝙣𝙖𝙡 𝙫𝙞𝙚𝙬:
The interesting study by the consulting firm BCG, based on feedback from 1,000 clients, reveals significant findings on the deployment of GenAI. Although the deployment is predominantly at the pilot stage in most companies, the observed gains in productivity of daily work 10 to 15% are noteworthy. However, the crucial insight is that 70% of the success of this transformation depends on human factors, highlighting the importance for leaders to engage their workforce, even when the technology involved is AI.
Thank you 🙏 Boston Consulting Group (BCG) researchers team for these insightful findings:
👉 Follow me as a LinkedIn Top Voice on LinkedIn (+40 000), and click the 🔔 at the top of my profile page to stay on top of the latest on new best HR, People Analytics, Human Capital and Future of Work research, become more effective in your HR function and support your business, and join the conversation on my posts.
👉 Join more than 18,000+ people and subscribe to receive my Weekly People Research
Everyday, I share a new research article about People Analytics, Human Capital, HR analytics, Human Resources, Talent,…
Human Capital Management Consultant | Executive Coach | Executive Search | Psychologist 💥
6moInsightful! This is a very interesting initiative to take into consideration for HR professionals to increase productivity 💥
Enabling accelerated transformation at scale | Strategic Account Director @CoachHub | Podcast Host "TransformationUniverse" | Speaker (i.e TedX)
6moThanks for Sharing Nicolas BEHBAHANI. BCG: “Succesfull AI transformation are a 70(people & processes)-20-10” CEOs: “Great!” Investment allocation: 90% in new technology and facilities. 10% into people and process improvements. Find the error.
Industry Veteran | Exploring Future of Work | Great Manager’s Coach & Mentor
6mo🙏 Excellent & relevant share, Nicolas BEHBAHANI, we are still leveraging Gen AI. To begin with avg. 10 to 15% benefits to productivity is huge (in some cases its even higher). 👌Appreciate the efforts & recommendations of Boston Consulting Group (BCG) researchers. 👏 ❓- How Org. can prepare their People, Processes, Practices & Policies for Gen AI transformation benefits: (For Engagement, Experience & Enticing Customers for Business Success). GEN-AI G - Gain Insights - Assess existing Processes, Practices & Policies. (Map) E - Evaluate Pain Points. N - Navigate Affordability. A - Awareness (build) & Adaptation by fostering discussion. I - Implement Strategically, watch others, Change only if required - "Trend is My Friend" BUT its my pocket. - Whilst implementing Gen AI "Be Human"
Human Resource Professional | MBA | Coporate Recruiting Professional- ASA | Ex-Wirtgen Group,A John Deere Company
6moGreat insights! A successful AI journey requires a balanced focus on technology, data, and, most importantly, people. Recognize that AI transformation involves as much cultural change as it does technological advancement. Fostering a culture of innovation is crucial. Encouraging employees to experiment with AI tools in their daily tasks can lead to unexpected efficiencies and new use cases. Leaders must champion this cultural shift, ensuring AI is viewed as an enabler rather than a threat. Regularly assessing AI initiatives against KPIs and iterating based on outcomes can significantly enhance success rates. Thank you for sharing!
Product Development 🔱 | Project Management📋| Operations Management ⚓| Continuous Improvement📊 | Truck radial tire🛞
6moNicolas BEHBAHANI Thank you for sharing this insightful post about the role of people and processes in successful GenAI transformations. Your summary of the BCG research provides valuable insights for organizations looking to implement AI effectively. What I particularly appreciated about your post: 1. The emphasis on the 70% contribution of people and processes to successful AI transformations. This underscores the importance of the human element in technological advancements. 2. The breakdown of the 10-20-70 rule, which provides a clear framework for resource allocation in AI initiatives. 3. The specific recommendations for leaders to begin their AI journey, offering practical steps for implementation. To add to your points, I'd suggest that organizations also consider the ethical implications of AI implementation. As AI becomes more integrated into daily operations, it's crucial to establish guidelines for responsible AI use that align with company values and societal expectations. Your personal view at the end is particularly insightful. The fact that 70% of the success depends on human factors indeed highlights the critical role of leadership in engaging and preparing the workforce for this transformation.