Demystifying GenAI: Part 2
“Disruptive innovation can hurt, if you are not the one doing the disrupting.”
– Clayton Christensen (Harvard Business School, and Author of “The Innovator’s Dilemma)
As the saying goes ‘Top Line Growth is King…’. In reality, though, consistently delivering year-over-year revenue growth is very difficult to do in competitive global markets. Most products and services are easily replicated, driving commoditization, and a ‘zero sum’ battle for market share. While there are a wide range of approaches to driving consistent growth, ultimately they boil down to delivering differentiated value in one (or more) areas, including:
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- Branding and Marketing
- Products & Services
- Experiences
- Prices
Enter GenAI… An innovative set of technologies capable of driving competitive advantage across each of the categories above, and in many cases, all four.
GenAI-Enabled Brands and Personalized Marketing
Great branding is the result of creativity and analytics. The first, creativity, can’t be taught, but it can be systematically enabled. GenAI-enabled rapid ideation and content development can help groups think outside of the box, rapidly explore new ideas, and test them in targeted ways. It can also help develop and optimize your Brand strategy and campaigns across cultures and languages much faster than has ever been possible. The second, Personalized Marketing, has been the ‘holy grail’ of marketing for decades, but the delta between promise and reality was substantial. LLM’s and targeted GenAI solutions can now create truly custom, personalized marketing interactions, based on the specific customer’s preferences, their interactions with your brand, and where they are in the buying cycle. Both can play critical roles in building strong relationships with prospects and customers and accelerating revenue growth across your business.
GenAI-Enabled Products & Services
Companies around the world are ‘in the innovation lab’ exploring ways to leverage GenAI capabilities to create new, high-impact solutions they can monetize. The ‘pure play’ tech companies, such as OpenAI, Microsoft and Salesforce are leading the way, but more traditional firms such as JPMorganChase, American Express, and Procter & Gamble are actively productizing GenAI capabilities. Microsoft 365 Copilot is a great example of an early mover integrating GenAI into an existing product (platform). Its GenAI-enabled capabilities are forecast to drive >$7 Billion in incremental annual revenue for Microsoft by 2025.
GenAI-Enabled Experiences
Customers are valuing differentiated experiences more and more these days. Think of unwrapping an Apple product, or logging into Netflix with a set of custom content recommendations based on your preferences and viewing history. The potential applications of GenAI to deliver custom, on-demand content and experiences is mind boggling. Take big data, advanced analytics, and custom on-demand content creation and you get a powerful engine for differentiated, 1-1 customer experience curation.
GenAI-Enabled Cost Advantages
For industries where price is the dominant competitive factor, GenAI is mandatory, not optional. Its productivity and intelligent automation capabilities are already beginning to dramatically reduce both operational overhead and direct product costs for early adopters, and its cost impact will accelerate in 2024 and 2025. For companies not-solely driven by cost competitiveness, GenAI’s ability to fuel productivity and cost structure improvements will drive pricing power and margin improvement opportunities for companies that embed into the core ways of working. Customers will soon be presented with such compelling cost advantages from GenAI-forward companies that laggards will struggle to compete.
What We’re Seeing in Practice
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- Growing Awareness: Most organizations begin their GenAI journey focusing on productivity enablement and margin improvements, but there’s a growing awareness of its top-line revenue opportunities.
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- SaaS-Led: As noted above, the pure-play, Software as a Service (SaaS) companies are leading the way with commercialized GenAI solutions. That gap is likely to close in 2024 and 2025, though, with significant implications for those that ‘nail it’ and those who are slow to respond.
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- Early Days: 2023 was an experimentation year for most early adopters, and they discovered that while GenAI’s commercial potential is enormous, the core technology has a lot of ‘kinks’ to work out prior to being ‘ready for primetime’ in customer-facing solutions. We expect the technology to mature rapidly, however, and companies can use this time to develop their strategy and their organization’s capabilities.
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- Significant Need for Predictability: One of the biggest challenges to overcome is the variability that many GenAI solutions produce. Whether it’s the well documented challenges of ‘LLM Hallucination’ or simply the ability of system to produce similar outcomes repeatedly, GenAI Predictability is something that has to be solved prior to monetization. For now, effective GenAI strategies will need to control for this uncertainty.
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- Testing on Internal Use Cases First: As a result, most companies are focusing on developing internal solutions first, where they can master the intricacies of scaled GenAI solutions without the risks of client involvement.
‘To the victor goes the spoils…’
GenAI is going to play a significant role in accelerating revenue growth and cost declines across virtually every industry. As with previous disruptive innovations, there will be clear winners and losers. Make sure you start your GenAI journey now, if you haven’t already, as the value prop is clear, the stakes are high, and 2024 is the year GenAI’s commercial capabilities become undeniable.
Please click below to explore the next 3 blogs in the ‘Demystifing GenAI’ series.
To learn more about Accelerated Innovation’s end-to-end GenAI enablement services, or specific topics of interest, schedule a call and get started on your journey.
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