Many organisations are finding it difficult to translate investments in both traditional and generative AI (GenAI) into significant productivity improvements, according to a new study by Gartner. The survey, conducted between June and August 2024 with 724 respondents from various business functions, found that only 37% of teams using traditional AI reported high productivity gains, compared to 34% of those using GenAI.
“Despite the excitement surrounding AI, its impact on productivity has been inconsistent, leading to what some describe as the AI productivity paradox,” said Gartner distinguished vice president Randeep Rathindran. “While AI has shown potential to boost productivity at the segment level, such as in call centres, broader organisational benefits have been harder to achieve. Therefore, CFOs should recalibrate expectations on how AI will truly impact worker productivity and headcount.”
High expectations of AI’s capabilities often lead to disillusionment when the technology does not automatically result in substantial productivity improvements, according to the study. While AI can automate tasks and provide insights, the benefits are not uniformly realised. Additionally, challenges in measuring productivity gains and delays in implementation can hinder the realisation of AI’s potential.
The survey also highlighted the uneven distribution of productivity gains across different business functions. Marketing teams reported the highest gains from AI use, whereas legal and HR functions lagged. This disparity underscores the importance of context and specific AI applications within various organisational functions.
“The most successful teams approach AI with an openness to learn and explore new use cases, rather than fearing job displacement,” said Rathindran. “By redesigning structures and workflows to eliminate process bottlenecks and shifting time to value-added tasks, these teams maximise AI’s potential and achieve meaningful productivity gains.”
CFOs urged to recalibrate AI expectations
Gartner suggested that CFOs and business leaders should adjust their expectations regarding AI’s impact on productivity. Instead of viewing AI as a universal solution for efficiency, they should focus on creating conditions that enable AI to achieve its full potential. This involves reassessing assumptions about cost savings and headcount reductions in AI-related business cases and educating C-suite and finance leaders on organisational behaviours that can enhance AI’s impact. By adopting a structured and collaborative approach, organisations can better position themselves to capture the productivity benefits AI can offer.
“As AI and GenAI continue to evolve, their transformative promise remains undeniable. However, organisations must ground their expectations in current realities and focus on the factors that truly drive productivity gains,” said Rathindran. “By understanding the nuances of AI’s impact and fostering a culture of acceptance and learning, organisations can harness AI’s potential to achieve sustainable success.”
Gartner, in a recent survey, revealed that, although 72% of organisations in the supply chain sector have adopted GenAI, its impact on productivity and return on investment remains modest. Gartner’s ‘Supply Chain Executive Report: The GenAI Productivity Paradox’ noted that while GenAI enhances individual efficiency, especially among desk-based workers, these improvements are not translating effectively across entire teams.
Read more: GenAI adoption surges in supply chains, but productivity gains prove to be mixed bag
