GenAI: the Next Productivity Frontier

July 9, 2024

Previously, we discussed how 2023 is the year of GenAI

Now, moving into Q4, this trend has cemented its place in global businesses, as more and more companies adopt it.

The world’s users remain as curious as the technology itself, as both parties simultaneously learn from each other.

As companies increasingly realise the power and benefits of GenAI, the surrounding literature of thought pieces, use cases and risk analyses have grown with it. For example, McKinsey’s recent report on GenAI highlights how, for many users, it acts as the next productivity frontier.

‘Gradually, then all of a sudden’

The report remembers the first glimpses that we had of GenAI in November 2022, with curiosity and fear over its future, an early understanding of how it could help business processes, and anxieties regarding what it might mean for future job security.

In the time since, GenAI’s usage has grown extensively, from OpenAI releasing ChatGPT to the more intelligent GPT-4 version just a few months later. This growth of GenAI is only set to continue, with 75% of its value coming from Customer Ops, Marketing and Sales, Software Engineering and R&D. In fact, GenAI’s impact could add trillions of dollars in value to the global economy – with estimates between $2.6tn to as much as $4.4tn a year.

Whilst benefits to productivity cannot be overestimated, this still requires workers to be supported with new skills, as many will undoubtedly – be forced to – seek new occupations.

‘In addition to the potential value GenAI can deliver in specific use cases, the technology could drive value across an entire organisation by revolutionising internal knowledge management systems.’ McKinsey report

GenAI can automate as much as 60-70% of employee time, as it continuously learns and understands natural language, to help users perform tasks more efficiently.

McKinsey’s report suggests some of the following ways GenAI can shape departments:

Customer operations

  • Customer self-service interactions
  • Customer-agent interactions
  • Agent self-improvement

Software engineering

  • Inception and planning
  • System design
  • Coding
  • Testing
  • Maintenance

Takeaways and implications for Procurement

  • Companies will want more best-fit digital and GenAI solutions to be implemented in their work processes
  • Some users remain sceptical over where its data is stored, with some companies banning its use altogether over fears of competitive information being accessed
  • For workers across numerous industries, GenAI will automate numerous key and time-consuming processes

Read the full report.

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