Gen AI investments deliver strong ROI

New global research from Google Cloud looks at the return-on-investment (ROI) of generative AI (gen AI) and reveals a surge in UK businesses investing in gen AI and reaping its rewards. However, despite significant financial commitment and early successes, a significant portion of UK enterprises are grappling with the transition from pilot projects to full-scale production. Companies struggling to move beyond pilot projects are hindered by the lack of clear leadership and prioritisation of adoption.

Key UK Findings from the ROI of Gen AI Survey:

Return on Investment: While most UK businesses are already seeing ROI from gen AI (70% report seeing ROI now on at least one use case), between 32% and 45% expect to see ROI across use cases within the next year. The areas where UK companies most anticipated ROI within the next year from gen AI are Customer & Field Service (45%), New Products & Services (39%), and Digital Commerce & Enhanced Experiences (38%).

High Adoption and Investment: A significant portion of UK businesses (62%) have adopted gen AI and have at least one use case in production. Nearly three in five (57%) of UK organisations plan to allocate a minimum of 50% of their AI budget to generative AI.

Challenges in Production: Two in five (38%) UK organisations are yet to implement gen AI in production, indicating a substantial hurdle in scaling this transformative technology into actual implementation.

Success in Customer Service & Productivity: Among UK organisations currently utilising gen AI, approximately a third are witnessing a significant ROI in customer service (30%) and individual productivity (38%).

Top Use Cases: The most common use case for gen AI in the UK is for Customer & Field Services (68%). Other popular use cases include individual productivity tools like emails, documents, presentations, meetings, and chat, with 54% of UK businesses currently using it for this purpose and Back Office/Business Processes (51%).

Global Insights: The report highlights that globally gen AI is moving into production with C-suite investment, talent, and strong data foundations:

Widespread Investment: The study, surveying over 2,500 global business leaders, confirms a global trend of increased investment in gen AI, with most organisations allocating a significant portion of their AI budget to this technology. Two-thirds (67%) of the organisations surveyed are making significant budgetary commitments (50% or more of their future AI budget) to generative AI

Business growth: 77% of execs reporting business growth said they have improved leads and customer acquisition as a result of gen AI solutions.

Improved Threat Identification: 56% of organisations leveraging gen AI saw an improvement to security posture, with 82% of those organisations reporting an improved ability to identify threats.

Increased Employee Productivity: Of those reporting improved productivity, generative AI solutions have at least doubled employee productivity in 45% of organisations. 70% of these respondents saw improved IT processes and staff productivity as a result of generative AI solutions.

Return on Investment and Increased revenue: Organisations that have successfully moved gen AI into production are reporting a return on investment: Of those reporting increased revenue, 86% estimate gains of 6%+.

Barriers to Adoption: Despite the promising results, many organisations globally are struggling to move beyond pilot projects, highlighting a need for strategic guidance and support.

Sectoral and Geographical Variations: Adoption rates and results vary across sectors and regions, with Telecom and Healthcare more likely to be leveraging gen AI for over a year, while there is a more pronounced lag in the Financial Services and Manufacturing industries. In the EMEA region, organisations are significantly less likely to have been leveraging gen AI in production for more than one year.

Leadership is Key: Comprehensive C-level sponsorship is a crucial factor in successfully deploying and scaling gen AI solutions. 9 in 10 (91%) organisations with comprehensive C-level sponsorship who indicate experiencing increased revenue estimate a 6%+ growth.

“The UK is clearly embracing the transformative power of gen AI, with many businesses already seeing a significant return on their investments. However, it's equally clear that successfully scaling gen AI across the enterprise is a complex journey. British businesses need a clear strategy, strong leadership, and the right technological foundations to navigate this path effectively.” - Helen Kelisky, UKI MD, Google Cloud.

The ROI of gen AI survey underscores the transformative potential of gen AI for UK businesses. However, the transition from pilot to production remains a critical challenge. To fully harness the power of gen AI, UK organisations should prioritise strategic alignment, invest in change management and upskilling, and enhance data quality and knowledge management.