- Ted Rogers
- Reading Time: 4 minutes
The amount of energy and resources spent on Generative AI is consistently capturing headlines. AI’s potential has yet to be fully tapped, and industry giants continue to make significant investments to direct the market to their respective domains as more organizations look to incorporate Generative AI in transformation programs. Recent announcements include Apple, Microsoft and Nvidia continuing to invest in OpenAI as well as Salesforce’s intentions to acquire Tenex. Google, IBM, Amazon are shoring up their positions to maintain presence in the conversation. Meta Platforms is ramping up the AI race with intentions of providing free access to their technology.
Investors, practitioners, and interested observers know the Generative AI race does not stop with these tech firms. System Integrators, SAP, Oracle, and Workday have been intentional in marketing their significant investments in Generative AI. Recent announcements pertain to acquisition of capabilities, development, or access to LLMS, proprietary tool development, and training resources.
The technology marketplace is changing quickly, and everyone is working hard to make progress in Generative AI. As the transformation leader or buyer this is an opportune time to invest, but astute transformation leaders need to incorporate these three points as you decide how to incorporate Generative AI in your program.
Vendor Capabilities
Availability of Generative AI capabilities within the consulting and advisory industry is under development and limited at best. Early on, PwC made a bold and significant statement about the maturity of capabilities at scale when they proclaimed: “We are Client 0.”
The veiled warning transmitted in this statement tells all of us to consider a limited, but developing toolbox when it comes to capabilities and talent that any SI will be able to provide on your transformation program.
Based on what UpperEdge is observing in vendor RFPs and client engagements, here is our gauge on the current picture of vendor capabilities:
- SIs are likely to prioritize focus on business services areas (e.g., Marketing Services, Tax Advisory, etc.) first, and then digital program delivery tools.
- SI RFP responses offer their branded proprietary tools, dashboards, accelerators, and industry templates, but continue reading what they will usually say next. SI proprietary Generative AI enablement is limited (e.g., limited to training content) and often marketed as the “future aspirations” of Generative AI.
- SIs have a track record of limited success in new technology deployment but look for SIs to announce acquisition of boutique firms that specialize in Generative AI.
Vendor Talent
The Generative AI talent picture for vendor team members is different, and from my perspective there is an opportunity to reap as a bullish investor focused on lowering the cost of executing the transformation program.
Although the SI proprietary tool set is still developing and growing in Generative AI capabilities, the number of SI team members engaged in and ramping up Generative AI experience is growing every day. SIs are training team members in the use of generally available commercial Generative AI tools like CoPilot and OpenAI. In parallel, SIs are augmenting their standard methodologies and the use of their tools with the commercially available Generative AI Capabilities.
The opportunity for the client is twofold. You should require your SI to be transparent to where they are using any generative AI within the offering services and execution of work. This will also allow you to determine if there are cost reductions warranted, and alert you to areas for scrutiny for potential risk or quality issues.
Second, a smart leader will invest time and resources in their own team getting hands-on practical experience with generative AI in the use of the commercially available tools. Leveraging the SI to upskill the client’s teams on the new technology platforms being implemented as well as Generative AI skills will benefit the team as they begin to deliver value during the program. Additional benefit would be expected post go-live with the experienced in-house team supporting the transformation of the enterprise.
Client Liability, Security, Privacy & Intellectual Property
As the client leader of your transformation program, it is important you take a sober approach to the use of Generative AI within your program. Consider the risks to company reputation, data privacy, and protection of intellectual property.
Regulated industries like banking, public utilities, healthcare will have a significantly lower risk tolerance and slower adoption in this technology sector. Other industries will have concerns about protecting intellectual property. All industries will be on guard for data protection of both employees and other stakeholders.
Generative AI did not introduce these risks, but vigilance is needed especially in the AI space. The cost of remediation is usually expensive in terms of reputation and money.
Clients need to take time to consider Generative AI limitations and risk exposure associated with technology platforms and the nonvisible risk level within generative AI tools used by the SIs. Be diligent to understand how any new AI capabilities will work within the client’s statutory and internal controls for data privacy and cyber requirements.
One approach is to charter a Generative AI Council within your enterprise. Members would include senior leadership participation from legal, risk management, IT / Digital, and functional areas. The group should not be viewed as a prohibitor of progress, but managers of reasonable risk management.
Make Haste Slowly in your Transformation.
New technologies are powerful tools when used appropriately. Remember that you have a business problem you are trying to solve with the help of technology; in this case, how Generative AI can help you solve your business problem. Do not lose focus on the business problem you are trying to solve. Consider a SMART approach to the use and management of Generative AI within your program and enterprise.
- Specific – What is the objective that Generative AI will accomplish or support? How does the contractual language in the software licensing or vendor services statement of work clearly define the Generative AI capability (ERP software capability or vendor capability) that you are acquiring?
- Measurable – Decide on what you will measure and how you will measure. For example: How will progress be measured in the enablement of Generative AI capacity? How will the quality of that output be tested and verified? What are the KPIS for measuring the impact of the acquired capabilities?
- Achievable – Require vendors to demonstrate what they are offering. Insist on referenceable clients where the contracted Generative AI solution (software or capability) was previously and successfully delivered. Follow through and contact the reference.
- Realistic – Make the vendor(s) state within the contract how the Generative AI solution is realistic and relevant to the program’s objectives (lowering cost, improving quality, etc.) or enabling the desired functionality with the users. Include the criteria for success, relevant KPIs and risks.
- Timely – What is the timeline for starting the work? What is the timeline for work completion? When are the first results expected to be visible?
This sector is moving fast. Be thoughtful. Be flexible. Be SMART
