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Business leaders have only begun to grasp the power of AI

Business leaders have only begun to grasp the power of AI

For business leaders chasing productivity, the introduction of ChatGPT in November 2022 could not have been more perfectly timed.

But having quickly become familiar with the technology, they now face the challenge of shifting from using generative AI as a useful administrative tool to discovering its true transformational power.

OpenAI’s global phenomenon landed in Australia at a time of historic low unemployment, when firms could not hire quickly enough or struggled to recruit new people at all because of the competition for jobs.

Any spare capacity in the labour market had been soaked up and while opportunities for enterprise growth remained plentiful, there was little business leaders could do to take advantage. Even as the economic outlook has softened, labour shortages in key sectors remain acute.

With the emergence of ChatGPT and other generative AI tools like Google Bard, stretched employers suddenly have an accessible tool that can help ease the pressure, taking over writing and administrative tasks, and increasing efficiency for some process-driven responsibilities.

Business leaders see plentiful opportunities for freeing up time and streamlining operations, and in the six or so months since ChatGPT stormed onto the stage, the primary question has shifted from ‘are you using generative AI?’ to ‘why wouldn’t you?’

Pitcher Partners’ latest Business Radar survey illustrates the stampede towards the new technology, with over a third of mid-market business respondents saying they already use generative AI in their business, while another 4 in 10 are preparing to utilise it.

Respondents liked what they saw with generative AI, overwhelmingly agreeing with statements such as ‘It will lead to new products and services,’ (84%), ‘It will streamline operations and processes,’ (82%) and ‘It will free up more time to focus on business strategy,’ (79%).

However, the survey also reveals the limited focus for business leaders as they explore new technology – many have confined their use cases to back-office or support tasks for AI such as administration, email writing, or simple content creation.

Business advice and guidance, training, knowledge management, innovation, bookkeeping and accounting are among the lowest uses named by respondents. These more complex functions will take some time to develop, even as businesses get used to generative AI as a thought-prompter, task completer and better search engine.

Operationalising generative AI into the business environment requires significant investment and – tapping back into the hiring issue – the recruitment of people with the skills to both develop and maintain AI integration. There is also the challenge of training and fine-tuning models to suit an individual business context, as well as the need to introduce the enhanced security that comes through API and licensed use.

For those already using generative AI, 37% believe cost is their biggest challenge.

There is also an absence of genuine trust that it can safely handle business data.

Pitcher Partners Business Radar respondents who have plans to adopt AI technologies, but have yet to do so, point to data security and accuracy as the biggest obstacles. Two in five are yet to fully trust ChatGPT on security or accuracy, while one in three names data privacy concerns as their biggest challenge.

So how do people learn to trust the tech?

Taking advantage of opportunities offered by AI is a two-part process – being proactive in asking questions about what it can do and developing safeguards that reduce risks associated with bringing the answers to life.

The first step is to ask deeper questions that align with business goals, identify use cases that could help those goals, and understand the processes and training necessary to extract transformative insights.

ChatGPT isn’t the only generative AI platform on offer – business leaders should familiarise themselves with the available tools and prepare to be agile, as new tools hit the market.

A plan should only be put into action if the second condition is satisfied – that business and client data is safeguarded, and the plan that delivers this is clearly communicated to the team.

One of the more worrying insights from the Business Radar survey is that over half (54%) of those already using generative AI say they haven’t instituted any safeguards.

Damaging data breaches can be avoided with sound risk frameworks and controls, while training teams in best practice methods of handling and storing sensitive information.

ChatGPT’s owners OpenAI advises users not to share sensitive information in conversations as prompts cannot be deleted, and it is a sound principle for any AI platform.

Generative AI has already had an impact on the business community by helping to ease some of the administrative burden that had been piling up on overstretched businesses.

For it to be truly disruptive and produce a competitive advantage, however, the next phase for AI is integrating it into the business, which requires a commitment over and above the public-facing technology now widely available.

With the right frameworks and risk management in place, AI tools can deliver transformational insights in a fraction of the time, and create much-needed capacity that can be directed to capitalising on the next business opportunity.

The AI transformation journey has just begun. It will be a winding and potentially challenging road but business leaders should embrace this passage of continuous and iterative learning, trials and practice.

This content is general commentary only and does not constitute advice. Before making any decision or taking any action in relation to the content, you should consult your professional advisor. To the maximum extent permitted by law, neither Pitcher Partners or its affiliated entities, nor any of our employees will be liable for any loss, damage, liability or claim whatsoever suffered or incurred arising directly or indirectly out of the use or reliance on the material contained in this content. Pitcher Partners is an association of independent firms. Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities. Liability limited by a scheme approved under professional standards legislation.

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