“Technology’s generational moment with generative AI: A CIO and CTO guide” from McKinsey discusses the potential of generative AI and the role of CIOs and CTOs in harnessing its value. It highlights that generative AI could add an equivalent of $2.6 trillion to $4.4 trillion of value annually. The article provides a primer on key terms related to generative AI, such as foundation models, large language models, fine-tuning, and prompt engineering. It also outlines nine actions that technology leaders can take to create value, orchestrate technology and data, scale solutions, and manage risk for generative AI. Lastly, it emphasizes the need for companies to determine their posture for the adoption of generative AI, identify use cases that build value, and reimagine the technology function.
Key Points:
- Generative AI’s Economic Impact: Generative AI could add an equivalent of $2.6 trillion to $4.4 trillion of value annually. This is a key point as it highlights the significant economic potential of generative AI, making it a crucial area of focus for businesses.
- Role of CIOs and CTOs: CIOs and CTOs have a critical role in capturing the value of generative AI. This is important as it underscores the responsibility of these technology leaders in guiding their organizations to effectively leverage generative AI.
- Nine Actions for Technology Leaders: The article outlines nine actions that technology leaders can take to create value, orchestrate technology and data, scale solutions, and manage risk for generative AI. This is a key point as it provides a practical guide for leaders to navigate the implementation and management of generative AI.
- Move quickly to determine the company’s posture for the adoption of generative AI, and develop practical communications to, and appropriate access for, employees.
- Reimagine the business and identify use cases that build value through improved productivity, growth, and new business models. Develop a “financial AI” (FinAI) capability that can estimate the true costs and returns of generative AI.
- Reimagine the technology function, and focus on quickly building generative AI capabilities in software development, accelerating technical debt reduction, and dramatically reducing manual effort in IT operations.
- Take advantage of existing services or adapt open-source generative AI models to develop proprietary capabilities (building and operating your own generative AI models can cost tens to hundreds of millions of dollars, at least in the near term).
- Upgrade your enterprise technology architecture to integrate and manage generative AI models and orchestrate how they operate with each other and existing AI and machine learning (ML) models, applications, and data sources.
- Develop a data architecture to enable access to quality data by processing both structured and unstructured data sources.
- Create a centralized, cross-functional generative AI platform team to provide approved models to product and application teams on demand.
- Invest in upskilling key roles—software developers, data engineers, MLOps engineers, and security experts—as well as the broader nontech workforce. But you need to tailor the training programs by roles and proficiency levels due to the varying impact of generative AI.
- Evaluate the new risk landscape and establish ongoing mitigation practices to address models, data, and policies.
- Company’s Posture for Generative AI Adoption: Companies need to determine their posture for the adoption of generative AI. This is crucial as it emphasizes the need for a strategic approach towards generative AI adoption, balancing innovation with risk mitigation.
- Reimagining the Technology Function: Generative AI has the potential to completely remake how the tech function works. This is a key point as it highlights the transformative impact of generative AI on the technology function of businesses.
Source Article: Technology’s generational moment with generative AI: A CIO and CTO guide (https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/technologys-generational-moment-with-generative-ai-a-cio-and-cto-guide)
What is the estimated annual value that generative AI could add?
A) $1.2 trillion to $2.0 trillion
B) $2.6 trillion to $4.4 trillion
C) $5.0 trillion to $7.0 trillion
D) $8.0 trillion to $10.0 trillion
What is NOT one of the nine actions that technology leaders can take to create value with generative AI?
A) Determine the company’s posture for the adoption of generative AI
B) Identify use cases that build value
C) Ignore the risk landscape associated with generative AI
D) Reimagine the technology function
What is the role of CIOs and CTOs in the context of generative AI?
A) To block employee access to publicly available applications to limit risk
B) To work with risk leaders to balance the need for risk mitigation with the importance of building generative AI skills
C) To ignore the potential of generative AI
D) To limit the adoption of generative AI in the business
The Bottom Line for Marketers:
Generative AI can significantly enhance productivity in marketing use cases by analyzing unstructured and abstract data for customer preference. This can lead to more effective and personalized marketing strategies, thereby increasing customer engagement and driving growth.
Answers to the Multiple Choice Questions:
B) $2.6 trillion to $4.4 trillion
C) Ignore the risk landscape associated with generative AI
B) To work with risk leaders to balance the need for risk mitigation with the importance of building generative AI skills
Michael J. Goldrich, Vivander Advisors: A leading consultancy enterprise specializing in comprehensive hospitality services, including digital marketing, generative AI consulting, media strategy, and project management. Our aim is to empower hotels and brands to increase their revenue and cut costs through a unique approach to profit optimization.