• Jason Kelley

    IBM Texas Senior State Executive
    IBM Consulting General Manager & Managing Partner, Strategic Partners & Ecosystem

CEOs are hopeful that generative AI will spark big productivity gains even as they scramble to prepare for the changes needed to deliver on that promise, according to a recent IBM Institute for Business Value (IBV) study, “CEO decision-making in the age of AI.”

The survey, the result of input from 3,000 global leaders in more than 30 countries and 24 industries, finds that CEOs are laser-focused on using technology to drive productivity and profitability.

That’s where generative AI plays a huge role.

Powered by foundation models, generative AI promises improved automation for businesses everywhere and has the potential to unlock trillions in economic value over the next decade. Much of that is expected to come in customer operations, marketing and sales, software engineering, and R&D.

Seventy-five percent of those surveyed believe that companies with the most advanced generative AI will have a distinct competitive advantage, and half of those are already integrating generative AI into products and services.

In recent years, intelligent automation has simplified recruitment and talent acquisition by saving time and improving recruiter productivity and engagement. Sport Clips Haircuts, the Georgetown-based major national franchise, has begun implementing IBM watsonx Orchestrate to help teams delegate mundane tasks and instead focus their energy on their more strategic and enjoyable work. For example, when it comes to talent acquisition, IBM watsonx Orchestrate uses intelligent automation to handle interview scheduling and help the recruitment process run smoothly. During an initial test, Sport Clips found a task that normally took three hours to complete, took just three minutes.

Leadership focused on tech-driven productivity

In the IBM IBV survey, CEOs ranked productivity as their highest priority (48%), up from 6th place in 2022. Technology modernization was ranked CEOs’ second highest priority (45%), and, for the fourth consecutive year, CEOs surveyed say technology factors remain the top external force having an impact on their organization over the next three years.

CEOs are increasingly looking toward operational, tech and data leaders as strategic decision-makers. When asked which C-Suite members will make the most crucial decisions over the next three years, CEOs identify COOs (62%) and CFOs (52%). The influence of tech leaders is also growing with 38% of CEOs pointing to CIOs (up from 19% a year ago), followed by Chief Technology or Chief Digital Officer (30%).

Changes and guardrails required

Despite the hopeful tone for generative AI, a portion of leaders surveyed say that their organization is not ready for the many changes it will bring. In the IBM IBV survey, just 29% of executives feel that their organization has the expertise in-house to adopt generative AI.

Upskilling is essential as many companies lack the in-house expertise to take full advantage of the opportunities of the strategic impact generative AI will have on their operations and workforces. Fewer than one-third of those surveyed have assessed the potential impact of generative AI on their workforces, while 40% have begun to make some workforce changes to meet the opportunity.

Among the concerns leaders expressed about generative AI:

  • More than half (57%) of CEOs are concerned about the security of data.
  • 48% worry about bias or data accuracy.
  • 61% expressed concern about the sources of data used.
  • Only 30% of non-CEO senior executives say that their organization is ready to adopt generative AI responsibly.

IBM believes that guardrails must be established to help ensure fairness, explainability, robustness, transparency, and privacy. There is a growing need to proactively drive fair, responsible and ethical decisions and comply with current laws and regulations.

The push toward Responsible AI (RAI) that drives ethical decisions — not favoring one group over another — requires detecting bias during data acquisition, building, deploying and monitoring models. Changes in behavioral patterns and profiles may require model retraining or rebuilding throughout the AI lifecycle.

Despite those concerns, just 25% of CEOs say they have issued any guidance on the use of generative AI within their organization. Only 29% say their organizations have joined public calls for greater regulation of AI, but another 23% plan to do so.

While generative AI will play a critical role in productivity gains over the next few years, leaders agree that opportunity must be met with a commitment to responsible use. This socio-technological challenge is critical. If organizations continue to remember that the purpose of artificial intelligence is to augment human intelligence, not replace it, and work with principles of fairness, explainability, robustness, transparency and privacy, both business and society will be well-served by this AI evolution.

About the Author

Jason Kelley, IBM Consulting General Manager & Managing Partner of Strategic Partners & Ecosystem, is responsible for the strategy, organization and business performance of IBM strategic alliances. In addition to his executive responsibilities, Jason is also the IBM Texas Senior State Executive, where he represents IBM in education and government relations advocacy, and creates constituent relationships with key state and community leaders.

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