Chances are your workplace at least dabbles in generative AI—though it’s likely not a big moneymaker yet.
Nearly three-quarters (71%) of business leaders say their companies are regularly tapping the technology for at least one business function, in a new McKinsey report based on a survey from last July. That’s up from the 65% who said so earlier in 2024.
The consultancy’s state of AI report—based on a survey of nearly 1,500 people at companies of all sizes and industries around the world—paints a picture of steadily growing generative AI adoption with modest financial gains, but no huge windfalls yet.
Four in five of these companies aren’t seeing tangible bottom-line impact on their business as a whole, McKinsey’s survey found. But some individual departments are starting to clock slight revenue increases and cost reductions.
Show me the money: Strategy and corporate finance, supply chain, marketing and sales, service operations, and software engineering were among the top areas where companies are both saving money and boosting revenue. The survey also mentioned HR, legal and compliance, and IT as units where generative AI was a cost-cutter but not a revenue driver.
The vast majority of these revenue increases were below 5% for the given unit, and most of the cost reductions were 10% or less. The number of companies reporting budgetary windfalls also grew steadily across all departments mentioned between early 2024 and July.
Marketing and sales was the most common place where companies of all types report using generative AI, while other target areas varied by industry.
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Service operations, supply chain, and HR are also the departments where a plurality of execs expect job cuts in the next three years as a result of AI—most of these predictions are for a 20% or less reduction.
Bryce Hall, McKinsey associate partner and report co-author, wrote in the report that companies are starting to get more targeted with where they apply AI now that some of the novelty has worn off.
“Executives are rightfully looking for a return on their AI investments,” Hall wrote. “In many cases, they are paring back their strategies from trying to apply GenAI everywhere to prioritizing the domains that have the greatest potential.”
Doing AI right: The survey finds that companies are still mostly in the very early days of generative AI adoption. Only 1% of executives surveyed describe their generative AI operations as “mature.”
McKinsey said that less than a third of respondents were following most of the dozen best practices it correlated with scaling AI ROI, which ranged from dedicating a team to AI implementation and tracking performance indicators to building trust among workers and laying out an adoption roadmap.
“We’re now far enough into the GenAI era to see patterns among companies that are capturing value,” Hall wrote. “One significant difference is that these companies focus as much on driving adoption and scaling as they do on the up-front technology development.”