2024 will be a landmark year for the use of generative AI (GenAI). The technology is finding its way into companies' processes, structures and business models at an ever-faster pace – with far-reaching consequences that go beyond technical issues.

To anchor GenAI solutions organizationally and culturally and thus shape the transformation, strategic approaches are required at various levels.

Together with the market research institute INNOFACT, msg surveyed employees and managers of German companies on the use of GenAI and identified five fields in which the need for action is especially pronounced:

Fig.: Five fields in which the pressure to act is particularly pronounced: Skills, Governance, Productivity, Strategy, Organization

The broad use of GenAI in companies requires new knowledge and skills in large parts of the organization. This concerns both technical skills such as machine learning methods, deep learning frameworks, cloud platforms and technologies, as well as a fundamental understanding of AI and the associated basics of AI ethics, bias minimization as well as technologies to ensure exact and fair results.

According to the survey, these skills are not yet sufficiently present in organizations. For example, 57.8 percent of the companies surveyed stated that, in addition to a lack of resources, the lack of skilled workers and knowledge in the workforce is preventing them from using GenAI more extensively. This skill gap is particularly noticeable in industries that are already using GenAI, such as the insurance industry. There, 71.5 percent of respondents cited these factors as an obstacle to the use of GenAI.

Companies that do not succeed in closing these skills gaps are at risk of being left behind due to the highly dynamic nature of the GenAI environment. At the same time, specialists in this field are rare and difficult to recruit, as recent studies show. This increases the pressure on companies to enable their own workforce in handling GenAI and to develop new talent.

Some companies have already recognized the challenge. According to the survey, one third (33.7 percent) are planning to increase employee training in the future in order to build up the necessary skills within the organization.

The rapid proliferation of GenAI use cases has highlighted the enormous potential of the technology, but also the need for clear rules and guidelines.

According to the msg survey, only around one quarter of companies currently have a company-wide set of rules for the use of GenAI. In the remaining cases, the use is usually not regulated at all or only for individual application areas. Many companies therefore appear to define the rules for use according to individual use cases without deriving general guidelines from them. There are differences between industries: While a good third of the financial sector has already established corresponding company-wide regulations, only 7 percent of public administration companies have done so.

The lack of binding, company-wide guidelines for dealing with GenAI leads to considerable uncertainty in many organizations. Across all industries, 40.3 percent of respondents cite concerns about legal aspects as the biggest obstacle to the use of GenAI in their organization.

This realization has partially reached companies: 28.7 percent of companies want to push ahead with the introduction of corporate guidelines for the use of GenAI in the coming years.

Productivity and efficiency gains through the reduction of routine tasks and the automation of processes are among the key promises of GenAI.

However, according to the msg survey, only 4.8 percent of respondents currently believe that GenAI will completely take over the tasks of employees. The assessment of how much added value GenAI can deliver depends heavily on the respective industry. While 67.1 percent and 63.9 percent of service industries such as the insurance and banking sectors respectively see medium to high added value from GenAI (especially in customer service), expectations in the public sector are rather low.

To open up further productivity potentials, the technology would have to have be embedded in the company's end-to-end processes. Another key to increasing productivity lies in combining it with other technologies and automation solutions.

The use of GenAI has a strategic dimension in several respects. Firstly, because, depending on the market environment, the company’s own corporate strategy is influenced by the emergence of generative AI. Secondly, GenAI itself can support the strategy development process. And finally, companies must develop a viable GenAI strategy for themselves that shows how added value can be generated through the use of GenAI.

Such strategic engagement with GenAI appears to be only partial in most companies to date. According to the survey, only 38 percent of companies are currently looking into the further application possibilities of GenAI at a central level. Instead of a central GenAI strategy, the use of GenAI in the organizations seems to be driven by the specialist departments along individual use cases. According to the respondents, GenAI is also not yet being used as part of the strategy development process of companies. The maturity level of the GenAI strategy differs depending on the industry: While just under half of all companies in the finance and insurance industries (47 percent and 42.9 percent respectively) are dealing with GenAI at a central level, only one in five organizations in public administration are doing so.

The results indicate that many organizations are currently still in the experimentation phase, which is characterized by decentralized initiatives.

GenAI is changing organizations. The use of GenAI applications changes processes, decision-making paths and therefore also roles and structures. Companies must also find the right set-up to drive the development and integration of GenAI tools as efficiently and effectively as possible.

The majority of respondents (33.3 percent) currently place the decision on the use of GenAI at board or management level. The results suggest that no contact points and decision-making channels have yet established in these companies and that decisions on the use of GenAI are instead being made "a boardroom issue". This finding applies to all industries and is confirmed by practical experience. 

The ability to adapt new GenAI tools and services quickly and effectively and to seamlessly integrate them into company processes will become a significant competitive factor in the future. Companies are therefore required to create the right organizational framework conditions in additional to effective change management. This includes, for example, roles, responsibilities and reporting channels that enable organizations to leverage the value of GenAI.