Transformers: Age of Extinction
Understanding the business implications of Generative AI
Total Enterprise Reinvention
We are now used to the daily mainstream media coverage of Generative AI. It’s impossible to keep on top of all the developments and their consequences. It is exciting, overwhelming, at times fatiguing and indisputably conjecture.
It makes sense to take a step back, not too far, just a few months in fact. A great research piece from Accenture called Total Enterprise Reinvention (TER).
They introduce the idea that post-pandemic we have been in a period of ‘compressed transformation.’ 8% of organisations are executing a TER technology strategy. We can think of this as the brave CEOs hitting the nuclear button when it comes to a strategic reboot. 86% are Transformers, perhaps tackling a leg rather than eating the whole elephant. So pretty much every organisation is doing something profound.
This makes it a bit easier to process what is happening in the business world right now. Covid-19 significantly accelerated the pace of digital transformation. Transformation was essential for survival. Management teams were just catching their breath. Then ChatGPT was launched in November 2022.
Reinventors report higher incremental revenue growth, higher cost-reduction improvements and higher balance-sheet improvements. Sounds great, how do you do it?
Accenture describe TER as six characteristics. Let’s think about these in the context of Generative AI implications.
Reinvention is the strategy. 97% describe technology as critical to reinvention / transformation.
Gen AI - every role in every enterprise has the potential to be reinvented.
Digital core is a primary source to competitive advantage.
Gen AI - the Generative AI tech stack becomes a primary source of competitive advantage.
Reinvention goes beyond benchmarks.
Gen AI - the short term potential of ChatGPT is totally the wrong way to think about reinvention. Crucial questions regarding how and where the organisation wishes to position itself in the Generative AI tech stack must be addressed.
People are central to the reinvention.
Gen AI - your £1m change management program just became a £10m problem.
Reinvention is boundaryless. 99% of executives expect that the focus on the interconnectedness across their organisation will increase over the next two years.
Gen AI - there is a very obvious contradiction here with 86% seeing themselves as Transformers (discrete transformation projects in one part of the business). To truly realise the potential of Generative AI, many more than 8% will find themselves in the TER bucket.
Reinvention is continuous. The focus shifts from, one and done programs, or “is this too much change” to a company that is proudly “all about change.”
Gen AI - Much easier said than done, even for a startup. Oh, and it's expensive.
90% of organisations are struggling to get ROI from AI. Will these organisations be brave enough to invest in TER to realise returns from Generative AI when they have had their fingers burnt with AI over the last 5-10 years? Will Generative AI perhaps solve some of the very real implementation challenges.
High stakes stuff.