Table of Contents
- Key Highlights
- Introduction
- The Prospective Landscape of GBS with AI
- Navigating Challenges on the Road to AI Implementation
- The Path Forward: Recommendations for Success
- Real-World Examples of AI Transformation
- Implications for the Future of GBS
- FAQ
Key Highlights
- Rapid Adoption: 42% of Global Business Services (GBS) organizations piloted Generative AI (Gen AI) in 2024, with 63% reporting successful outcomes in productivity and cost savings.
- Budget Growth: GBS technology investments are anticipated to increase by 10% in 2025, while workloads are expected to rise by 11%, creating a looming efficiency gap.
- Challenges Ahead: Key barriers to widespread Gen AI adoption include process complexity, unrealistic expectations, data quality issues, and shortage of AI talent.
Introduction
As organizations increasingly turn to technology to streamline operations, a staggering 42% of Global Business Services (GBS) entities experimented with Generative AI (Gen AI) in 2024. This burgeoning trend, highlighted in The Hackett Group's 2025 Key Issues Study, illustrates not just a moment of experimentation but a deep and transformative shift in how businesses operate. The study reveals that 63% of those early adopters have already witnessed improvements in productivity, cost efficiency, and service quality. The potential of AI as a foundational lever for business optimization has never been clearer, yet, as GBS evolves, so do the challenges and complexities associated with such stark transformations.
Navigating this terrain is critical, as organizations face mounting pressures to do more with less. With technology budgets on the rise and workloads increasing, the 4% efficiency gap poses a significant risk to operational efficacy. By understanding these dynamics, we can better appreciate the trajectory of GBS and its implications on the broader business landscape.
The Prospective Landscape of GBS with AI
The Hackett Group's study emphasizes that GBS leaders are not merely adopting Gen AI; they are redefining roles and processes across nearly all business functions. Following the positive impact seen in early deployments, anticipation grows around AI's role in finance, IT, HR, and procurement. A survey indicated that 71% of leaders expect transformative effects on unstructured tasks by 2027, emphasizing the technology's growing capabilities.
Positive Outcomes from Early Adoption
Early adopters of Gen AI have reaped substantial rewards—a trend corroborated by various metrics:
- Productivity Gains: Early users reported up to a 25% improvement in work quality and efficiency.
- Cost Reductions: Nearly 60% of GBS leaders view AI as integral to their cost-reduction strategies.
- Enhanced Service Offerings: AI has facilitated better customer and employee experiences, showcasing its ability to improve engagement across audiences.
The encouraging results prompt many organizations to explore Gen AI in depth, with 47% planning to expand service penetration to additional business units and geographic markets.
Navigating Challenges on the Road to AI Implementation
Despite the promising outcomes associated with Gen AI, the study highlights significant challenges hindering widespread adoption. Leaders within the GBS sector will need to address several key hurdles effectively:
1. Complexity of Processes
An overwhelming 73% of organizations cited process complexity as a primary challenge in AI adoption. This refers not only to existing processes but also to the intricacies involved in integrating new technologies with legacy systems.
2. Unrealistic Expectations
A sizable 71% of respondents acknowledged the presence of unrealistic expectations surrounding the perceived capabilities of AI. The gap between anticipated outcomes and actual results can stall initiatives and lead to disillusionment.
3. Data Quality Issues
The importance of high-quality data cannot be overstated. Seventy-one percent of GBS leaders identified poor data quality as a considerable barrier, necessitating increased focus on data management alongside AI deployment.
4. Talent Shortages
With 67% of organizations facing challenges in sourcing skilled AI professionals, the talent shortage presents an immediate concern. The need for training programs to upskill existing employees is more critical than ever.
5. Change Management Issues
The operational upheaval associated with adopting AI entails robust change management to facilitate employee buy-in and training. Sixty-four percent of surveyed leaders recognized this as a vital aspect of successfully integrating AI.
The Path Forward: Recommendations for Success
To bridge the identified efficiency gap and enhance the integration of AI, The Hackett Group offers several recommendations for GBS leaders:
- Cultivate a Co-Intelligent Culture: Encourage collaboration across teams to leverage AI capabilities effectively. By fostering a culture of shared intelligence, organizations can maximize the benefits of AI technologies.
- Set Realistic Performance Expectations: Establish clear benchmarks and goals related to AI implementations, ensuring they are aligned with actual capabilities.
- Invest in Talent Development: Prioritize reskilling and upskilling initiatives for current employees to foster an AI-ready workforce.
- Evaluate AI Agents: Organizations should consider AI agents as support tools to bolster existing teams rather than wholly replace them.
Real-World Examples of AI Transformation
Across various industries, organizations adopting Gen AI have already begun to see debunked myths about its efficacy. Case studies illustrate how companies navigate the challenges and seize opportunities:
Case Study: Finance Sector
A major financial institution implemented Gen AI to streamline its transaction processing operations. Within the first few months, they reported a 30% improvement in throughput and a significant reduction in operational costs, attributing much of the success to enhanced data analytics capabilities.
Case Study: HR Management
A multinational corporation integrated an AI-driven chatbot to handle employee inquiries, resulting in a 40% decrease in HR response times and a noticeable increase in employee satisfaction scores.
Implications for the Future of GBS
The shift towards Gen AI will not only redefine operational practices but could also reshape the workforce landscape. Employees may see shifts in job descriptions with new roles emerging that complement AI capabilities. Strategic partnerships across sectors may further fuel innovation and advancement in business operations.
Looking Ahead: Growth in GBS Optimization
The future of GBS in light of AI adoption indicates an evolution towards more efficient, streamlined operations augmented by advanced technology. As organizations ramp up investments and strive to overcome challenges, the GBS landscape is poised for remarkable transformation driven by innovative thinking and responsive strategies.
FAQ
What percentage of GBS organizations achieved success with Gen AI implementation according to The Hackett Group's study?
63% of early adopters reported meeting or exceeding expectations with Gen AI implementation, achieving up to 25% improvement in quality and productivity.
How much will GBS technology budgets increase in 2025 for HCKT clients?
GBS technology budgets are set to increase by 10% in 2025.
What are the main challenges in Gen AI adoption identified in The Hackett Group's 2025 study?
The main challenges include process complexity (73%), unrealistic expectations (71%), data quality issues (71%), AI talent shortages (67%), and change management issues (64%).
What percentage of GBS organizations piloted Gen AI in 2024 according to HCKT's research?
42% of GBS organizations piloted Gen AI in 2024, while an additional 26% explored use cases.
What is the expected workload increase vs. budget growth gap for GBS organizations in 2025?
GBS organizations face a 4% efficiency gap, with workloads increasing by 11% while budgets will only grow by 7%.
In summary, the acceleration of AI adoption within GBS reflects a strategic pivot towards evolving operational landscapes. As organizations continue to navigate this terrain, the insights from The Hackett Group's study will serve as valuable guidance for effective implementation and overcoming the inherent challenges of this transformative era.