“Global investment in generative AI is on the rise… but senior management interest is declining” Korea Deloitte Group

As generative AI is being utilized in various ways in the business environment, Deloitte Group Korea published the ‘Corporate Generative AI Usage Status 2024 Q3 Report’. This report surveyed 2,770 boards of directors and board members, presidents, vice presidents, and director-level executives in 14 countries including the US, UK, India, and Japan, and contained the results of an in-depth analysis of data and governance for AI expansion, as well as risks and compliance, and how companies measure and deliver AI value.

Declining interest in generative AI among senior executives and boards

Today, companies are successfully extracting real value from generative AI adoption. Sixty-seven percent of respondents said they are increasing their investment in generative AI. Forty-two percent of respondents cited increased efficiency and productivity and reduced costs as key outcomes from their generative AI initiatives, while 58 percent said other benefits were more significant, including driving innovation (12 percent), improving products and services (10 percent), and strengthening customer relationships (9 percent). C-suite executives (63 percent) and boards of directors (53 percent) remain highly interested in generative AI, but these numbers are down 11 and 8 percentage points, respectively, from the first quarter.

While rapidly adopting and scaling generative AI projects is a key goal, the majority of respondents (68%) said that less than 30% of their generative AI experiments have moved to the business-to-use stage. When it comes to scaling generative AI initiatives, respondents said they are most prepared for technology infrastructure (45%) and data management (41%), while they are less prepared for strategy (37%), risk and governance (23%), and talent (20%).

The importance of documenting and labeling data sources is increasing, and much attention is also needed on data access frameworks and literacy. The most concerning issues for companies are the use of sensitive data (58%), data privacy issues (58%), and data security issues (57%), and many companies are responding by strengthening data security (54%). Regarding the successful development and adoption of generative AI tools and applications, companies are struggling due to regulatory uncertainty, and 14% of companies participating in the survey do not even have a specific response plan.

While interest in measuring and communicating the value of generative AI initiatives is growing, 41% of companies also struggle to define and measure the precise impact of their generative AI efforts. While the majority (54%) of companies aim to improve efficiency and productivity, only 38% actually track changes in employee productivity, and only 16% report regularly to their CFO.

Additionally, it was suggested that cost will become a key factor in decision-making for generative AI initiatives. Deloitte explained that going forward, there will be a need to use a comprehensive mix of financial and non-financial metrics to fully understand the value of investing in generative AI initiatives.

Fundamental reinvention of business processes… Rigorous performance verification is also essential

The report’s authoring team emphasized that generative AI should be used where appropriate to realize efficiency, productivity, and cost reduction, and to create more value. They advised that generative AI should be combined with other technologies and strategic initiatives to improve productivity and drive innovation, while fundamentally reinventing business processes to pursue sustainable value and move toward change.

As it is expected that the use of open LLM and public data to increase efficiency and productivity will become more common, companies should remain faithful to the basics while also strengthening their adaptability to changes. In addition, it is important to face the problem of lack of high-quality data, improve the data foundation, and strengthen strategies and relationships with members of the data ecosystem such as B2B partners, data end users, and third-party data providers to utilize data as a catalyst. Furthermore, it is essential to measure performance with more stringent standards, the company added.

“Now, we need to create continuous value through generative AI initiatives, and to this end, the creation of AI value for companies, including data, governance, risk, and regulations, has become more urgent,” said Jinsook Kim, partner of the risk advisory division of Deloitte Group Korea. “I hope that this report will provide meaningful insights into the practical use of companies’ generative AI initiatives.”

The full text of the ‘Corporate Use of Generative AI Report Q3 2024’ is Deloitte HomepageYou can check it at .
editor@itworld.co.kr