30% GenAI projects will be dropped after proof of concept by 2025 end: Gartner
Research and consulting firm Gartner Monday said at least 30% of generative AI (GenAI) projects will be abandoned after proof of concept by the end of 2025.
It highlighted that poor data quality, inadequate risk controls, escalating costs or unclear business value are some of the reasons that will impede these pilots. This comes at a time when many IT services firms such as Accenture, TCS, Infosys, Cognizant and Capgemini are ramping up GenAI pilot projects to open new revenue streams by taking them to production stage.
Justifying the substantial investment in GenAI for productivity enhancement, which can be difficult to directly translate into financial benefit, is a major challenge for organisations, Gartner said in a report. Though many are leveraging GenAI to transform their business models and create new opportunities, these deployment approaches involve significant costs, ranging from $5 million to $20 million, according to Gartner.
“After last year's hype, executives are impatient to see returns on GenAI investments. Yet organisations are struggling to prove and realise value. As the scope of initiatives widens, the financial burden of developing and deploying GenAI models is increasingly felt,” said Rita Sallam, distinguished VP analyst at Gartner.
“Unfortunately, there is no one size fits all with GenAI, and costs aren’t as predictable as other technologies. What you spend, the use cases you invest in and the depl ..
The Gartner research indicates GenAI requires a higher tolerance for indirect, future financial investment criteria versus immediate return on investment (RoI). Analysing the business value and total costs of GenAI business model innovation can enable organisations to establish the direct RoI and future value impact. Even many IT vendors’ leaders have recently spoken of clients weighing quick RoI before committing new tech spends.
A range of business improvements-that vary by use case, job type and the worker's skill level-are being seen in earlier adopters across industries and business processes. As per a recent Gartner survey, respondents reported 15.8% revenue increase, 15.2% cost savings and 22.6% productivity improvement on average.
17 сен 2024
