A CEO’s approach to the Generative AI revolution

WHITEPAPER A CEO’s approach to the Generative AI revolution Disruption doesn’t have to feel disruptive

Executive summary Generative AI (Gen AI) has emerged as a revolutionary force for businesses, triggering a new era of unprecedented innovation, efficiency, and expansion.

As a CEO, it's crucial to understand the broad possibilities and inherent limitations of Gen AI to navigate this transformative technological landscape effectively. This whitepaper aims to provide clear, strategic guidance to help you unlock your organization's potential with Gen AI.

This document doesn't delve into technical specifics, but underlines the importance of understanding Gen AI's capabilities and constraints. These insights — broken into three key steps, namely Articulate, Anticipate, and Activate - will empower you to confidently lead your organization into the Gen AI era, optimally leveraging this technology for growth and competitiveness. Through strategic choices and an informed approach to Gen AI, your organization can remain at the forefront of innovation, create lasting value, and seize the countless opportunities this technological evolution presents.

Gen AI marks the next pivotal transformation The advent of Gen AI marks a transformative shift in the technological sphere — one that far surpasses previous breakthroughs such as the Graphical User Interface (GUI), the internet, cell phones, and even traditional AI systems. Gen AI stands unique with its distinct generative capabilities, possessing the power to create fresh, original content autonomously, pushing us further into an era brimming with unparalleled creativity and innovation. Historically, the GUI revolutionized the way users interacted with their devices. However, Gen AI takes this further, enhancing how we connect, not just with our devices but with an entire digital network. This transcends the boundaries set by cell phones, integrating an array of devices and technologies to construct a wholly interconnected digital ecosystem. While the internet revolutionized data transfer and communication, Gen AI's impact is even more profound. It establishes seamless connectivity on a scale that the internet alone could never achieve. Additionally, while traditional AI systems have made strides in task automation and decision-making, relying on predefined patterns, Gen AI, with its adaptive learning capabilities and generative power, can make autonomous, creative decisions. Therefore, the extraordinary transformative potential of Gen AI lies in its power to redefine the way we engage with and perceive the world around us.

Generative Al

Transforms Stakeholder productivity

Artificial Intelligence Transforms decision making

Stakeholders: • Your own people • Your clients • Your suppliers

Transforms Connectivity Cell Phone

Transforms information exchange Internet

Graphic User Interface

Transforms human- tech interactions

Figure 1. The transformative journey from GUI to Gen AI

Unlocking CEO priorities Understand the impact of Gen AI in your context

CEOs require strategic insights and actionable steps to effectively leverage the transformative potential of Gen AI within their businesses. The 3A's (Articulate, Anticipate, and Activate) is a practical framework that allows CEOs to unlock new opportunities, proactively forecast vulnerabilities, and kick-start effective strategies without unsettling their existing business landscape.

How might I articulate the transformative potential of Gen AI to unlock new opportunities for the enterprise?

Manage change and mitigate risk

Prioritize opportunities

01 Articulate

02 Anticipate

Establish foundational elements

Maximize business outcomes

How might I anticipate vulnerabilities and the foundational requirements to set my people up for success?

03 Activate

How can we activate to win without destabilizing our current business?

Establish opos, governance

Monitor and measure Value

Figure 2. The 3A Framework

Lastly, Activate i nvolves the critical factors needed to successfully integrate Gen AI within the enterprise. It requires the development of a solid governance model to supervise Gen AI initiatives, ensuring they align with the organization’s overarching goals. CEOs can effectively guide Gen AI initiatives and alleviate potential risks by defining clear decision-making structures, outlining roles and responsibilities, and promoting a culture of accountability. In this stage, regular assessments furnish valuable insights into the success of Gen AI deployments, thus allowing the organization to tweak strategies and maximize its return on investment. 03 Secondly, Anticipate is about perceiving vulnerabilities and setting up the necessary groundwork for success. CEOs can construct a resilient support system by proactively identifying and addressing potential challenges and risks linked to Gen AI implementation. This entails equipping their workforce with the necessary skills and resources, thus enabling the teams to utilize Gen AI's transformative capabilities effectively. 02 Firstly, Articulate involves an in-depth analysis of how Gen AI can revolutionize a business. Armed with this comprehensive understanding, CEOs can harness Gen AI’s generative capabilities to streamline processes, enhance decision-making, and even unlock new avenues for revenue. This strategic articulation positions their organizations at the forefront of their respective industries.

ARTICULATE

Start with key business levers and determine your path to value

Enhancing productivity with engaged employees through initiatives like Code CoPilot and process automation results in reduced innovation timelines, intelligent decision-making, and increased operating margins. At the same time, optimizing customer experience is crucial. Utilizing advanced conversational tools, customer-focused chatbots, and streamlined operations improves marketing and sales effectiveness. This fosters an innovative environment that unlocks creativity and encourages participation. Transformation is integral to staying ahead of the curve. By integrating Gen AI–led workflows, enabling edge decision-making with Gen AI, and actively breaking down organizational silos, businesses can tap into increased revenue streams, explore new markets, and stay prepared for disruptive industry changes.

Earn stronger return on capital Enhance employee experience Enhanced Productivity* with an engaged workforce • Code CoPilot and Process automation Innovation timelines reduced • Intelligent decision-making, research & insights horsepower • Increased operating margins, efficiency and output • Empowered, energized workforce that embraces change with minimal conflict • IP copyright protection, Security vulnerabilities • Psychological threat • Opportunity identification: Low • Process integration: Low • Change management: Medium to start • Low: Standard protocols & audits to be set in place + Experimentation Sandbox • Shared roadmap, vision & access cross levels Data privacy & security risks

Enhance customer experience Enable a culture of innovation Winning Experiences* for all stakeholders • Innovation process enhanced • Advanced conversational experiences, customer-centric chatbots • Streamlined IT and HR operations • Zero-distance to customer/consumer • Improved marketing, sales effectiveness • A culture of innovation fostered with unlocked creativity and participation for all • Opportunity identification: Medium • Process integration: Medium • Change management: High

Reach new markets/segments Revolutionary ways of working

100X Transformation* for the enterprise

• Gen Al led workflows for product and service innovation • Decisions at the edges with Gen Al directly interacting with customer, & involving humans for 'edge cases' • Enhanced revenues and market expansion • Stay ahead of disruptive industry changes • Meaningfully de-siloed organization

Sample use cases

Impact

• Opportunity identification: High • Process integration: High • Change management: Very High

Investment

• Data privacy & security risk • Data collection mechanisms & acceptance

• Regulatory compliance • Data privacy

Risks

• High: With elaborate future-proofing to manage change, develop talent, infrastructure and partnerships

• High: Manage misuse, consumer-to-consumer/customer -to-customer interactions; liability measures

Mitigation effort

Figure 3. Determining your path to value

Find your Gen AI sweet spot to prioritize new opportunities and activate quick wins

Assessing use cases based on criteria like productivity gains, cost savings, revenue prospects, ethical considerations, and competitive differentiation equips businesses with the tools to spot quick wins, bold innovations, and strategic ventures that align with their specific objectives and risk tolerance levels. This enables them to prioritize and focus on high-impact opportunities, while simultaneously addressing possible risks and compliance issues, leading to a successful Gen AI implementation. The 4E framework (Economics, Edge, Extensibility, and Exposure) offers businesses a comprehensive approach to prioritizing and assessing the value of potential Gen AI use cases. Businesses can amass valuable insights to aid informed decision-making through these critical lenses.

Prioritize and Measure with 4E framework

• This framework helps prioritize and evaluate potential use cases for Gen Al based on four critical levers: Economics, Edge, Extensibility, and Exposure. • Assign a score to every consideration and decide on weightage for the levers based on business alignment

E xposure - Assess the ethical considerations and evaluate the impact on privacy, security, and legal/ regulatory compliance.

E conomics - Consider factors such as productivity gains, cost savings, and potential revenue increase.

ECONOMICS

EXPOSURE Sweet Spot

EDGE

EXTENSIBILITY

E xtensibility - Consider broader applicability of use cases with slight modifications and scalability of implementation.

E dge - Assess how a particular use case can differentiate you from your competitors increasing your brand power & cool factor.

Figure 4. The 4E framework

By applying the 4E framework, businesses can pinpoint the 'sweet spot', where high-value opportunities exist with manageable risks, starting with quick wins to generate immediate benefits and build momentum. The framework also motivates businesses to venture into bold innovations, employing Gen AI for new product development and extensive research and development. Firms can strategically prioritize use cases that provide the greatest competitive advantage and capitalize on extensibility, ensuring scalability and adaptability in diverse scenarios.

Start with Quick Wins

Use the scores by levers to assess business value and risks to start focusing on quick wins Value = Economics X Edge X Extensibility Risk =Exposure

• New product development for market • Extensive research and development BOLD INNOVATIONS • Dynamic content optimization • Intelligent retail experience STRATEGIC GAMBLES

• Knowledge management • Code generation, etc. PROFIT CATALYSTS

• Social Listening • Personalized Education, etc. SAFE BET

Risk (High to low)

Figure 5. Value to Risk matrix to derive quick wins

ANTICIPATE

Determine which model suits your organization Organizations exploring the integration of Gen AI into their operations have three distinct options, each tailored to specific use-case needs, available resources, and desired outcomes.

Use - Case Examples

Talent

Infra

Change

Experiment: Off-the-shelf GenAl applications such as Chat GPT or similar products No confidential data required

• Problem-solving • Code Generation • Idea Generation

Low Medium

Low

Integrate: Gen Al applications such as APIs or Open models into existing processes Confidential data required to fine-tune models

• Knowledge Management • Social listening

Medium High

High

Build: Your own GenAI models to fit business contexts Confidential data required Train models

• Extensive research and development

High

Requirements Low Medium High

An organization can choose any one approach or combine different approaches based on the use-case need and available talent, budget, and infrastructure

Figure 6. Decision model for Gen AI integration

THE EXPERIMENT APPROACH

This approach involves engaging with ready-to-use Gen AI applications like Chat GPT or similar offerings. This method allows organizations a quick and easy initial foray into Gen AI, without extensive investments or data prerequisites. It offers immediate solutions for problem-solving, code generation, and idea generation tasks. Moreover, the lack of a need for confidential data mitigates potential privacy and security risks. This option is particularly fitting for organizations wanting a risk-free introduction to practical applications of Gen AI.

THE INTEGRATE MODEL

The second option, entails incorporating Gen AI applications such as APIs or open models into pre-existing processes. Though this requires some confidentiality for adjusting models to business-specific contexts, it allows organizations to exploit Gen AI capabilities within their existing framework. While it may require moderate investment and data, this approach allows for greater customization of Gen AI to effectively address business-specific challenges.

THE BUILD APPROACH

Acknowledge the change journey with a people-aligned approach The change journey should be tailored to people's needs, creating a supportive environment that encourages adoption and growth. By acknowledging these barriers and aligning strategies to people's needs, businesses can foster a culture that fully embraces Gen AI's transformative potential. The final option, is suitable for organizations ready to fully invest in the potential of Gen AI. This involves developing custom Gen AI models tailored to an organization’s unique needs and contexts. While it demands extensive development efforts, research, and access to significant confidential data, this method can achieve high levels of sophistication and differentiation, establishing the organization at the forefront of Gen AI advancements. The key lies in determining which change model best suits the organization’s specific needs and aligns with its overall strategic vision for Gen AI implementation. Each option provides distinct benefits and considerations, and organizations should carefully assess their readiness, resource availability, and appetite for innovation to make the most informed decision.

Awareness and reassurance

Pack small and quick actions to tangibly improve everyday functioning & productivity

Change management strategy

Objective

Skilled adaptive workforce leveraging tech for evolving roles

Focus on outcomes & roadmap to move to target state

De- silo for accelerated innovation

Solve for Segments: Optimistic Champion, Skeptic Follower, Diligent Follower, Resistant Changer Co-create with users throughout, reduce surprises with culture of curiosity, embracing Gen AI as win-win

Fear fueled by limited understanding

Change drivers

Limited skillset

Assuming business needs = people needs

Barriers

Bake in intrinsic & extrinsic motivation with social proof, reward habit loops, hands-on training

Rely on top-down approach

Figure 7. Identifying the Drivers of change for Gen AI adoption

Establish foundational elements across capability development, tech, and data to prepare for activation In the capability development, educating the workforce on essential skill sets like prompt engineering and responsible usage lays the groundwork for effectively utilizing Gen Al. Additionally, investing in talent development and defining redefined roles and responsibilities for employees enables them to effectively embrace Gen Al's potential.

Capability development

Educate your workforce on basic skillsets such as prompt engineering and responsible usage

Invest in the talent and articulate redefined roles and responsibilities for the people 2

Democratize knowledge through communities of practice, experimentation pods, and a Gen Al COE 3

Figure 8. Capability development

On the technology and data front, creating a robust infrastructure is essential. Businesses should set up high-quality data sets, both internal and external, to derive meaningful value from Gen Al models. Moreover, assessing requirements and total cost of ownership (TCO) allows for the seamless integration and maintenance of the required infrastructure.

Tech and data components

Set up high quality datasets, internal and external, to derive meaningful, relevant value from models

Assess requirements and TCO to integrate and maintain infrastructure for Gen Al 2

Evaluate current data and tech governance and define critical roles of a governing Gen Al council 3

Figure 9. Tech and data components

Democratizing knowledge through communities of practice, experimentation pods, and a Gen AI Center of Excellence (CoE) fosters a culture of innovation and collaborative learning, empowering teams to leverage Gen Al's capabilities more effectively.

By establishing these foundational elements, businesses can be well prepared to activate and leverage Gen Al for transformative growth and competitive advantage

Proactively manage risks with Responsible AI practices One of the crucial factors in implementing Generative AI responsibly is to manage risks proactively across the organization. These risks involve regulatory, reputational, and revenue concerns, as well as technical challenges like the problem of attribution, privacy issues, risky emergent behaviors, data security, hallucination, over-reliance, cybersecurity, and lack of explainability in AI decisions. By adopting Responsible AI practices, businesses can navigate potential pitfalls, build trust in AI systems, and ensure ethical, secure, and accountable AI implementations.

Regulatory Risk

Reputational Risk

Revenue Risk

Problem of Attribution

Privacy concerns

Auditability

Potential for risky emergent behaviors

Data Security

Hallucination and over-reliance

Lack of explainability

Cybersecurity

Figure 10. Risks associated with Gen AI

Organizations should embrace Responsible AI practices to address these challenges and maximize Gen Al’s benefits. This entails consistently and proactively doing the following:

Proactively prepare for the adoption and implementation of Gen AI, mitigating risks and maximizing benefits.

Enact Responsible Gen AI practices:

Develop robust data privacy policies and ensure compliance with relevant regulations.

Prioritize data privacy and security:

Evaluate the potential risks associated with AI implementation, including biases, unintended consequences, and potential societal impacts.

Conduct thorough risk assessments and review practices regularly:

ACTIVATE Establish a robust ops model with a focus on governance A well-defined and scalable operating model is essential to successfully integrate Gen AI into any business operations. The model outlined in this section, which comprises the Gen AI Center of Excellence (CoE) , the Gen AI Core Team, and the Gen AI Governance Council, ensures that all implementation aspects are handled optimally efficiently and consistently. The collaboration between these model components also reinforces robust governance, promoting ethical practices and oversight throughout the AI integration process.

Strategic 4 weeks Aligning Gen Al efforts with

Advisory board (CEO+ External Gen Al expert advisor + strategic vendor 4- 2 board members)

organizational goals, assessing risks, & upholding responsible & ethical Al norms, Scale up to companies & functions as well as monitoring

Gen AI Council (incl. RAI team, legal team)

Operational

2 weeks

Functional CXOs

Live Poes and feasibility of Scale ups. Collaboration among various data science teams is fostered through the COE to democratize the technology and best practices effectively. Day-to-Day Experimentation and feasibility of PoCs. Assessing the enterprise's readiness for Gen Al initiatives and establishing the necessary infrastructure for experimentation. Foundational

Gen Al Centre of Excellence

Gen Al expert + Change management monitors

Gen Al Core Team embedded across functions (demand, supply, ops, HR, finance, legal)

Trainers for prompt engg. & upskilling

Gen Al tech infra

Figure 11. Gen AI Governance and operating model

The first area is foundational , where the model assists in evaluating an enterprise's preparedness for launching Generative AI initiatives, while also helping to set up the necessary infrastructure for such undertakings. Next, we have the operational area. This model aspect offers oversight and guidance for deploying Generative AI initiatives. It uses large language models and aligns with selected Gen AI tools and technologies. It also encourages collaboration among data science teams via the Center of Excellence and the core team, thus facilitating the widespread understanding and effective implementation of this advanced technology.

Design a value measurement system that facilitates continuous improvement The framework for measuring value in implementing Gen AI is integral in understanding its benefits for the enterprise and its customers. It's important to note that the advantages of Gen AI may not manifest immediately in terms of financial impact or enhanced customer experience. However, a carefully structured, step-by-step framework for value measurement allows us to monitor the progression toward profitable growth. This approach helps capture the incremental changes by Gen AI integration and set clear, measurable milestones on the path to realizing its full potential. Lastly, the strategic area of the model focuses on ensuring that Gen AI efforts align seamlessly with an organization's broader goals. It includes assessing potential risks associated with Gen AI implementation and upholding responsible AI standards to ensure these technologies' ethical and secure application.

VALUE TO CUSTOMERS

Speed to outcome

Convenience, ease of business

Superior experience

• Faster information • Faster Service • Faster resolution

• Intuitive process • Information availability • Reduced consumer complaints, load on customer service.

• Higher C-SAT, NPS • Trust, Loyalty

VALUE TO ENTERPRISE

Day-to-day efficiencies

Process Redesign

Better financials • Topline and bottom-line impact

• Standardization • Improved humans accuracy • Lower Attrition

• Higher productivity • Time savings • Role shift from creator to editor

Figure 12. Value measurement system

Conclusion

Your strategic choices will be paramount as we step into a future increasingly shaped by Gen AI. Through conscious efforts to understand and adapt, your organization can harness the promise of Gen AI, stay ahead of the competitive curve, and create enduring value in an ever-evolving business world. Remember, the transformative potential of Gen AI is vast — the key to unlocking it lies in strategic choices, clear understanding, and informed leadership. Let this begin your organization's journey towards a future where Gen AI drives efficiency and innovation and becomes an integral part of your business success story.

Authors

Akbar Mohammed Principal Data Scientist

Angkeeta Goswami Senior Design Consultant

Rashid Khan Engagement Manager

Shivani Gupta Lead Behaviour Architect

Tanay Kumar Senior Consultant

Ashim Dhingra Senior Consultant

About Fractal

Fractal is one of the most prominent providers of Artificial Intelligence to Fortune 500® companies. Fractal's vision is to power every human decision in the enterprise, and bring AI, engineering, and design to help the world's most admired companies. Fractal's businesses include Crux Intelligence (AI driven business intelligence), Eugenie.ai (AI for sustainability), Asper.ai (AI for revenue growth management) and Senseforth.ai (conversational AI for sales and customer service). Fractal incubated Qure.ai, a leading player in healthcare AI for detecting Tuberculosis and Lung cancer. Fractal currently has 4000+ employees across 16 global locations, including the United States, UK, Ukraine, India, Singapore, and Australia. Fractal has been recognized as 'Great Workplace' and 'India's Best Workplaces for Women' in the top 100 (large) category by The Great Place to Work® Institute; featured as a leader in Customer Analytics Service Providers Wave™ 2021, Computer Vision Consultancies Wave™ 2020 & Specialized Insights Service Providers Wave™ 2020 by Forrester Research Inc., a leader in Analytics & AI Services Specialists Peak Matrix 2022 by Everest Group and recognized as an 'Honorable Vendor' in 2022 Magic Quadrant™ for data & analytics by Gartner Inc.

For more information, visit fractal.ai

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