Dive Brief:
- A new study by Big Four accounting firm KPMG reveals that most organizations aren’t yet ready to measure the success of their generative AI projects, even as such investments are poised to surge.
- Forty-four percent of companies have progressed beyond the research and experimentation phase of generative AI implementation and are now in the process of scaling up their use of the technology, according to survey findings released Monday. Yet only 15% of business leaders responding to the poll reported having established metrics for measuring returns on their generative AI investments.
- “I think it’s not surprising given that we’re just two years into the generative AI portion of the AI journey,” Per Edin, KPMG’s AI go-to-market leader, said in an interview. “I would expect this number to double a year from now.”
Dive Insight:
Worldwide spending on AI will more than double by 2028 when it is expected to reach $632 billion, research firm IDC reported in August.
More than three-quarters of executives say they need to adopt generative AI quickly to keep up with competitors, IBM found in a study released in June.
Business leaders expect to spend an average of $37 million on merger-and-acquisition dealmaking to build their generative AI capabilities over the next year, according to KPMG’s research. They also expect to pay an average of $25 million to hire new tech talent, $23 million to build a “responsible” generative AI governance program, and $19 million to purchase new generative tools.
“Companies are planning to invest a decent chunk of money — ‘not-bet-the-firm’ type of money, but certainly more than last fiscal year,” Edin said.
Now that many companies have gone through a series of generative AI pilots and a lot of the initial excitement has waned, “it’s becoming increasingly fashionable to ask questions around ROI,” he added.
When it comes to measuring ROI for AI spending, revenue generation currently ranks as the top metric (51%), followed by profitability (38%) and productivity (36%), KPMG found.
Productivity, which held the No. 1 spot as a metric in the first quarter, was overtaken by revenue generation in the second quarter.
KPMG polled 100 U.S.-based business leaders representing organizations with an annual revenue of $1 billion or more.
