Use of AI: Efficiency beats innovation

Artificial intelligence is regarded by many companies as a decisive factor for future competitiveness. However, the focus is on tactical optimization rather than strategic realignment.

Without artificial intelligence, competitiveness suffers, that is now the consensus in many German boardrooms. But there is often uncertainty when it comes to where and how AI projects should be introduced. The HR Report 2024 “Wie Künstliche Intelligenz die Unternehmenswelt beeinflusst” (How artificial intelligence is influencing the corporate world) by Hays attempts to answer these questions.

But not all AI is the same. Generative (e.g. ChatGPT, DALL-E) and predictive AI address different use cases in companies

Generative AI (GenAI) creates new content based on the user’s specifications in the form of images, videos, language or program code that hardly differs from content created by humans. Typical applications are content generation, knowledge transfer, translations, brainstorming, customer service, programming, or data analysis and visualization.

According to a survey by statista (June 2023), German companies primarily use ChatGPT for research (29.4 percent), brainstorming (21.9 percent), data analysis (21.5 percent), summarizing content (21.4 percent), creating content (19.3 percent), and project development (17 percent).

Unlike the “creative” variant, predictive AI calculates the probability of future events based on historical and current data. It can thus predict KPIs (key performance indicators), customer behavior and machine failures, detect anomalies of all kinds, personalize the customer experience, and optimize processes in general. That makes it a powerful tool for corporate management and a core component of industrial automation through to Industry 4.0.

Efficiency and acceleration

According to the HR report by Hays, 40 percent of respondents already use artificial intelligence (AI) in one form or another, most frequently in the IT sector, which is no real surprise. The focus is on optimizing existing processes, increasing efficiency, and achieving quick productivity gains through faster decision-making. Personnel savings are lower down the list, as are the topics of innovation and strategic repositioning.

Almost half of the decision-makers surveyed also lack a strategy when it comes to implementing AI. In the majority of cases, responsibility for that lies with IT, either directly in the specialist IT departments (39 percent) or with the CIO (17 percent). In every third company, the management decides on the strategy.

The results are consistent with the latest AI study by Deloitte “The State of Generative AI in the Enterprise: Now decides next,” according to which managers are focusing on the tactical benefits of generative AI such as efficiency and productivity increases as well as the associated cost savings (56 percent). There is less focus, however, on strategic aspects such as promoting innovation (29%) and generating new ideas and insights (19%).

Accordingly, the vast majority of respondents currently use “off-the-shelf” AI such as ChatGPT, while only a few use industry-specific or GenAI solutions specifically adapted to the company.

Concerns about loss of skills

According to the Hays study, however, artificial intelligence in company processes also raises fears, including the loss of in-house skills (31 percent) and reduced decision-making transparency. Those responsible are concerned about potential security problems and difficulties with integration into existing processes (46 percent respectively). In addition, respondents are burdened by moral concerns, including discrimination through algorithms and the spread of false statements (30 percent). Yet the benefits and opportunities for companies already using AI clearly dominate compared with those that have so far refrained from using it.