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Rita Sallam , Distinguished VP Analyst at Gartner said , “ After last year ’ s hype , executives are impatient to see returns on GenAI investments , yet organisations are struggling to prove and realise value . As the scope of initiatives widen , the financial burden of developing and deploying GenAI models is increasingly felt .”

A major challenge for organisations arises in justifying the substantial investment in GenAI for productivity enhancement , which can be difficult to directly translate into financial benefit , according to Gartner . Many organisations are leveraging GenAI to transform their business models and create new business opportunities . However , these deployment approaches come with significant costs , ranging from $ 5 million to $ 20 million .

Unfortunately , there is no one size fits all with GenAI , and costs are not as predictable as other technologies . What you spend , the use cases you invest in and the deployment approaches you take , all determine the costs . Whether you are a market disruptor and want to infuse AI everywhere , or you have a more conservative focus on productivity gains or extending existing processes , each has different levels of cost , risk , variability and strategic impact .

Regardless of AI ambition , Gartner research indicates GenAI requires a higher tolerance for indirect , future financial investment criteria versus immediate return on investment , ROI . Historically , many CFOs have not been comfortable with investing for indirect value in the future . This reluctance can skew investment allocation to tactical versus strategic outcomes .

Earlier adopters across industries and business processes are reporting a range of business improvements that vary by use case , job type and skill level of the worker . According to a recent Gartner survey , respondents reported 15.8 % revenue increase , 15.2 % cost savings and 22.6 % productivity improvement on average . The survey of 822 business leaders was conducted between September and November 2023 .

Rita Sallam , Distinguished VP Analyst , Gartner

This data serves as a valuable reference point for assessing the business value derived from GenAI business model innovation . But it is important to acknowledge the challenges in estimating that value , as benefits are very company , use case , role and workforce specific .

Often , the impact may not be immediately evident and may materialise over time . However , this delay does not diminish the potential benefits .

By analysing the business value and the total costs of GenAI business model innovation , organisations can establish the direct ROI and future value impact , according to Gartner . This serves as a crucial tool for making informed investment decisions about GenAI business model innovation .

If the business outcomes meet or exceed expectations , it presents an opportunity to expand investments by scaling GenAI innovation and usage across a broader user base , or implementing it in additional business divisions . However , if they fall short , it may be necessary to explore alternative innovation scenarios . These insights help organisations strategically allocate resources and determine the most effective path forward . p

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