Generative AI can increase 44% in Human Productivity and the same percentage for downsizing over five to seven years!
Nicolas BEHBAHANI
Global People Analytics Leader | Future of Work | Leading Global HR Analytics, Driving Business Growth
?? This is the first time in the industry that researchers quantified the true impact that generative AI will have over the next five to seven years.
?? Following adoption of Generative AI, company can achieve a potential 40% cost savings, as well as a 40% reduction in FTEs over five to seven years.
?? Savings will increase over time as the organization adopts and implements generative AI components, with a 5-to 7-year time frame to realize total potential savings.
?? While implementing generative AI will ultimately reduce staff, it will also require adding some new roles to manage content, according to a new interesting research published by The Hackett Group Inc. using data ?? from a benchmarking of more than 80 general and administrative (SG&A) processes.
?What is Generative AI or GenAI?
Researchers defined Generative AI as a class of AI that can understand language and context, and it has the ability to communicate and create content – thus offering the potential to automate human decision-making.
Generative AI employs large language models that use vast quantities of data to understand the characteristics of a language and generate text that is coherent, contextual, informative, grammatically correct, and sometimes even humorous
?? Also Generative AI’s ability for self-learning is one factor that differentiates it from cognitive AI.
?80 SG&A processes evaluated
Researchers evaluated the potential impact across all SG&A business processes that can benefit from generative AI capabilities, more than 80 business processes in total.
?Impacts of GenAI on costs and staff
Researchers found that following adaption of Generative AI in a typical $10 billion company achieved an average SG&A cost reduction of $180 million and an average reduction in SG&A FTEs of 1,379 across the 80+ business processes studied.
?? Researchers also found that the typical company will need 129 new AI roles, or 4% of current SG&A FTEs. These new roles are independent of the projected FTE savings.
?The impact of GenAI on three types of Work:
Researchers evaluated the potential impact of generative on the transformation of three types of work below performed on the customer-to-cash process, then its subcomponents such as credit management and, within that, credit policy:
1?? Elimination of structured work – which is organized in a set and repeatable pattern – through automation
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2?? Enablement of unstructured work – which is typically not organized in a set pattern – by adopting digital assistants
3?? Enhancement of interactive work – which requires at least a two-way interaction between the user and system – through personalization at scale
?? Finally, researchers propose 4 steps for organizations to follow now to prepare to capitalize on the potential of Gen AI:
??Educate leaders and establish policies
Make sure your executives are up to speed on generative AI – including what it is, what it can and can’t do, the risks, and governance requirements – to ensure a strategic approach. This requires concerted education and communication.
??Mobilize resources
Every function should have a person or team responsible for exploring the organization’s potential use of generative AI by undertaking deliberate experimentation, working closely with leadership to build that into a vision and plan.
??Develop your proof of concept(s)
Starting with formal pilot or proof of concept initiatives allows you to trial the technology in production on a limited scale – with a focus on learning.
??Evaluate the solution and service provider ecosystem
Finally, talk with current technology, solution and business process outsourcing providers to understand their generative AI capabilities and road maps.
?? ???? ???????????????? ????????:
Through this comprehensive study, researchers quantified in the first time in the industry the true impact that generative AI will have in the next five to seven years on SG&A, including finance, procurement, human resources, information technology, marketing, sales and other functions. As researchers conclude, organizations and leaders need to educate managers on the capabilities, limitations of the technology, relevant policies and potential impact on headcount, assess how generative AI can be adopted in the organization to take full advantage of generative AI’s capabilities.
Thank you ?? The Hackett Group Inc. The Hackett Institute researchers team for these insightful findings: Vin Kumar (he/him) Eric Hutcherson
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Dedicated HR Consultant, Lifelong Learner, and Compulsive Researcher: Helping people and organizations achieve their best results. Currently focusing on Digital HR and AI in HR | SHRM-SCP, SPHR, GPHR
4 个月It's fascinating to see the detailed breakdown of how generative AI can impact different types of work, from structured to interactive tasks. However, while the benefits are clear, it's essential for organizations to also consider the ethical implications and ensure proper governance frameworks are in place.
Industry Veteran | Exploring Future of Work | Great Manager’s Coach & Mentor
4 个月?? What an astonishing study! Gen-AI is poised to revolutionize our approach to work. It's not merely a glimpse into the future; it's a seismic shift in how we optimize work processes. Thank you for sharing, Nicolas BEHBAHANI. ?? IT companies have begun to grasp the implications, leading to a slowdown in hiring. While this may instill fear, there are numerous strategies to mitigate concerns. ?????? Leveraging Gen-AI to streamline structured tasks, enable flexibility in unstructured work, and enhance interactive collaboration is truly transformative. It empowers employees to thrive in a dynamic, agile work environment. ?? The four steps outlined by researchers offer a practical roadmap for organizations to navigate this transformation effectively. ??♂? Personally, I view this as more than just a technological leap; it's a cultural evolution. Embracing change, nurturing a learning mindset, & fully utilizing Gen-AI's potential are key to driving organizational excellence.
LinkedIn Top Voices in Company Culture USA & Canada I Executive Advisor | HR Leader (CHRO) | Leadership Coach | Talent Strategy | Change Leadership | Innovation Culture | Healthcare | Higher Education
4 个月Thank you for sharing Nicolas BEHBAHANI Lisa Highfield
Speaker, Author, Professor, Thought Partner on Human Capability (talent, leadership, organization, HR)
4 个月Nicolas BEHBAHANI wonderful research that shows where genAI has impact today. Accessing data more efficiently helps productivity. There will be much more research in this space, but the reality of genAI is already here. More to come as genAI moves to more informed decision making building on efficiency. https://www.dhirubhai.net/pulse/pre-flections-genai-hr-where-go-how-get-dave-ulrich-lvbjc/?
Human Resource Professional | MBA | Coporate Recruiting Professional- ASA | Ex-Wirtgen Group,A John Deere Company
4 个月Recognizing the transformative potential of Generative AI on Human Productivity is groundbreaking. To improve understanding, it's vital to provide concrete examples illustrating how organizations can put these strategies into practice. For example, businesses could redirect human resources to focus on tasks that generate greater value, demonstrating a transition towards more strategic endeavors. Organizations must acknowledge the possible advantages and obstacles linked with this shift, as it is pivotal. It is crucial for organizational strategies to incorporate efforts in overcoming obstacles like resistance to change and ensuring the ethical deployment of AI. Thank you somuch for sharing this knowledgeable research!