Industry executives and experts share their predictions for 2024.  Read them in this 16th annual VMblog.com series exclusive.

In 2024, Enterprise AI Initiatives will be Measured by Value Creation, not Cost Savings

By Amit Sood, CTO - Simplr

Historically, the value of automation has been found in cost savings. It either replaces the need for more expensive human resources or speeds up processes to increase cost efficiency. The shift towards digital automation as a fundamental-if not primary-mechanism for most outputs has been one of the most profound and transformative trends in the enterprise over the past 50 years, purely because it has saved us a lot of time and money.

So, it makes sense that the latest great innovation in automation-generative AI-has also been viewed through the lens of cost savings. The first ROI statistic referenced in a recent WSJ article entitled "5 Things CFOs Should Know About Generative AI" is "Generative AI technologies are expected to reduce selling, general and administrative costs of up to 40% over the next five to seven years." Notes Constellation Research's Larry Dignan, "Although it's early in earnings season, the early returns are that enterprises are seeing generative AI as a cost savings tool that's much needed given the higher cost of capital due to interest rates."

This perception of generative AI will change in 2024. The reason why requires us to examine what makes generative AI so uniquely special compared to other advances in automation that came before it.

The core difference between generative AI and prior forms of AI is its ability to create new, novel ideas. This enables it to perform tasks that would be impossible for other automation technologies. For example, some customer service organizations have empowered generative AI chatbots to interact with customers autonomously via live chat customer support interactions. The chatbot itself can intake information from the end customer and create brand new responses in order to resolve the inquiry.

That is just one example of a massive shift that will happen next year. 2024 is the year in which generative AI gets rolled out across business units within enterprise companies at scale, and very quickly, IT leaders will realize how limiting it will be to measure generative AI just in terms of cost savings and cost efficiency.

Let's go through a number of specific examples that will play out in the upcoming year:

• Marketing: Marketers are already experimenting with incorporating generative AI into the marketing copy and content process, delegating tasks such as creating imagery to accompany advertisements or autonomously writing blog posts. Therefore, in 2024, marketers will assess the value of generative AI using content effectiveness metrics such as click-through rates, virality, and website conversions.

• Sales: Some of the most crucial aspects of the sales process have, to this point, resided exclusively in the realm of human capabilities. This includes building personal rapport with the prospect, identifying their unique needs, and combatting rebuttals. The combination of natural language processing and generative AI will create an army of virtual sales representatives in 2024, being measured like their human counterparts in terms of won/loss, conversion, and perhaps even hitting quota.

• Customer operations: Expect to see customer service and support organizations hand over highly complex and valuable customer interactions to generative AI. Examples include technical troubleshooting and interactions in which revenue hangs in the balance (like upsell/cross-sell opportunities or cancellation requests). In turn, generative AI will be measured by how much revenue it generated/saved within customer service interactions, and how it improved customer lifetime value. On top of that, generative AI's ability to synthesize a host of information to create a response should provide customers with more consistently exceptional interactions with customer support without increasing cost, increasing key CX KPIs like CSAT and NPS.

• Product and R&D: GenerativeAI will be deployed in product testing and QA across industries in 2024, capably filling in for end-users to engage with products. It will also assist in product planning and coding, drastically accelerating the time to market for viable new products and improving the performance of existing ones.
  

Early adopters across industries are already implementing all of the above, setting new standards and uncovering best practices in generative AI deployments as we speak. That puts the onus squarely back on us as IT leaders. The CIOs who can effectively and proactively convey the incredible power of generative AI to their business by showcasing its ability to transcend just cost savings will be the ones who steward their companies into a brand new era of business.

This, to me, is the most exciting trend in 2024, and I can't wait to be along for the ride.

##

ABOUT THE AUTHOR

Amit Sood, CTO - Simplr

Amit brings nearly 20 years of experience to his role as CTO of Simplr, leading technology and product at the company he joined as founding team member in 2017. He leads the development of Simplr's human-first, machine-enabled customer experience solution. 

Prior to joining Simplr, Amit worked for 5+ years as Asurion's Senior Director of Product, responsible for building and launching new growth initiatives. Heading Smart Home and IoT initiatives, his team was tasked with defining and delivering Smart Home products and solutions to Asurion partners, an initiative funded by Asurion's New Ventures Group.  

Amit began his career as a software engineer at HP, before moving to Motorola Mobility where he served as Senior Product Planning Analyst.  

Amit holds a BSEE in Computer Engineering from The University of Texas at Austin and an M.B.A. from Harvard Business School.