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HR reporting cost cutting by using genAI tools

Business’s expectations for genAI’s impact remain as high as they were last year, with three-quarters predicting that it will lead to significant or disruptive change in their industries in the years ahead. The function in which the largest share report cost decreases by using genAI is human resources, according to consultancy McKinsey Global Survey on AI. 

Respondents most commonly report meaningful revenue increases (of more than 5%) in supply chain and inventory management. 

For analytical AI, respondents most often report seeing cost benefits in service operations as well as meaningful revenue increases from AI use in marketing and sales.

“As businesses begin to see the benefits of genAI, they’re also recognising the diverse risks associated with the technology”, the survey says. These can range from data management risks such as data privacy, bias, or intellectual property infringement to model management risks, which tend to focus on inaccurate output or lack of explainability. A third big risk category is security and incorrect use.

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If 2023 was the year the world discovered genAI, 2024 is the year organisations truly are using and deriving business value from it. 65% of respondents say they are regularly using genAI, nearly double the percentage ten months ago, McKinsey says.

“For the past six years, AI adoption by respondents’ organisations has hovered at about 50%. This year, the survey finds that adoption has jumped to 72%. And the interest is truly global in scope.” 

In 2023, AI adoption did not reach 66% in any region. In 2024, more than two-thirds of respondents in nearly every region say their organisations are using AI. The biggest increase in adoption is in professional services.

“Also, responses suggest that companies are now using AI in more parts of the business. Half of respondents say their organisations have adopted AI in two or more business functions, up from less than a third of respondents in 2023.”

65% say their organisations are regularly using gen AI in at least one business function, up from one-third last year. The average organisation using gen AI is doing so in two functions, most often in marketing and sales and in product and service development and in IT. 

The biggest increase from 2023 is in marketing and sales, where reported adoption has more than doubled. 

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“Compared with 2023, respondents are much more likely to be using genAI at work and even more likely to be using genAI both at work and in their personal lives.” 

The survey finds upticks in genAI use across all regions, with the largest increases in Asia–Pacific and Greater China. 

“Respondents at the highest seniority levels, meanwhile, show larger jumps in the use of genAl tools for work and outside of work compared with their midlevel-management peers. Looking at specific industries, respondents working in energy and materials and in professional services report the largest increase in genAI use.

The survey shows that in many industries, organisations are about equally as likely to be investing more than 5% of their digital budgets in genAI as they are in nongenerative, analytical-AI solutions. 

“Yet in most industries, larger shares of respondents report that their organisations spend more than 20% on analytical AI than on genAI. Looking ahead, most respondents—67%—expect their organisations to invest more in AI over the next three years.”

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“Respondents are less likely than they were last year to say their organisations consider workforce and labour displacement to be relevant risks and are not increasing efforts to mitigate them.”

“In fact, inaccuracy—which can affect use cases across the genAI value chain, ranging from customer journeys and summarisation to coding and creative content—is the only risk that respondents are significantly more likely than last year to say their organisations are actively working to mitigate.”

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