After all the hype over artificial intelligence (AI), the value is hard to find. CEOs have authorized investments, hired talent, and launched pilots—but only 22% of companies have advanced beyond the proof-of-concept stage to generate some value, and only 4% are creating substantial value, according to new BCG research.
Our new report yields important insights into what AI leaders are doing to drive real value from the technology, where others fall short, where the value is coming from, how individual sectors are performing, and how companies can change their own AI trajectories.
Who Are the Leaders and What Are They Doing?
When it comes to AI, including generative AI (GenAI), companies across all sectors fall into four categories that range from not doing much (25%) to still focusing on proof of concepts (49%) to scaling value (22%) to operating value engines (4%). Companies in the latter two categories—the leaders—are not exclusively digital natives. More than half of the companies in the leader categories are incumbents that have strengthened their capabilities and are using them to drive greater productivity, increased revenue, and even competitive advantage.
Leaders differentiate themselves from other companies in six ways:
- They focus on core business processes and support functions, seeking to deploy AI for productivity, to reshape processes and functions, and to invent new revenue streams.
- They are more ambitious, setting big targets ($1 billion in productivity improvements at a financial institution, for example, or $1 billion in combined revenue increases and cost reductions at a biopharma firm) and investing in AI and workforce enablement .
- They invest strategically in a few high-priority opportunities to scale and maximize AI’s value.
- They integrate AI in both cost reduction and revenue generation efforts.
- They focus their efforts on people and processes over technology and algorithms.
- They have moved quickly to focus on GenAI, which opens opportunities in content creation, qualitative reasoning, and connecting other tools and platforms.
Read Chapter 1, including examples of how leaders are using AI to innovate and outperform the competition.
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Where’s the Value?
Leaders expect to generate significant value—45% more in cost reduction and 60% more in revenue growth than other firms. They expect their RoI from AI initiatives in 2024 to more than double what other companies expect from theirs.
Leaders are generating 62% of the value of AI in core business processes. (See the exhibit .) They are also reaping success across multiple functions. We look at where companies from different sectors are achieving positive results from AI across a wide range of functions, from customer service to R&D to operations and procurement.
Read Chapter 2, including our assessment of value in core business processes.
What Can You Do?
Most companies need an effective action plan to create value from AI. Leaders point the way by following a seven-step playbook:
- Set a bold strategic commitment from the top.
- Maximize the potential value of AI with initiatives that include streamlining everyday business processes, transforming entire business functions, and developing new offerings.
- Implement one to three high-value, easy-to-implement initiatives to fund the journey.
- Ensure that the minimal viable infrastructure required for these initiatives exists.
- Perform an AI maturity assessment to baseline current critical capability gaps versus peers.
- Ensure that implementation governance focuses on people and processes over technology and algorithms.
- Set up guardrails to deploy AI responsibly.
Read Chapter 3 on how you can maximize value from AI, regardless of where your company stands today.
