ibm -將人工智能融入品牌的 DNA Embedding AI in your brands DNA -Innovate from products to ecosystem and everything in between

IBMInstituteforBusinessValue|ResearchInsights

EmbeddingAI

inyourbrand’sDNA

Innovatefromproductstoecosystem—andeverythinginbetween

HowIBMcanhelp

IBMhasbeenprovidingexpertisetohelpretailandconsumerproducts

companieswininthemarketplaceformorethanacentury.Ourresearchersandconsultantscreateinnovativesolutionsthathelpclientsbecomemoreconsumer-centricbydeliveringcompellingbrandandstoreexperiences,

collaboratingmoreeffectivelywithchannelpartners,andaligningdemandandsupply.Withacomprehensiveportfolioofsolutionsformerchandising,supplychainmanagement,omnichannelretailing,andadvancedanalytics,IBMhelpsdeliverrapidtimetovalue.Withglobalcapabilitiesthatspan170countries,wehelpbrandsandretailersanticipatechangeandprofitfrom

newopportunities.Formoreinformationonourretailandconsumerproductssolutions,pleasevisit:

/industries/retail,/

consulting/retail

,and

/industries/consumer-goods

.

1

Key

takeaways

Brandsareevolving

beyondmereAIadoption,embeddingitintheirDNAtoharnesstheirdistinct

AI-drivenadvantage.

Overthenextyear,retailandconsumerproductsexecutivesexpecttoexpandAIsignificantlythroughoutallareas

ofthebusiness,frombrand-definingactivitiestocoreoperations.

ButtobeAI-centric,organizationsneedanopen

mindsetforhowAIcandelivertransformationbeyondproductivitygains.

Across13areasofthebusiness,executivesplantoaugmentmostactivitieswithAIoverthenext

12months.

Buttheyonlyproject31%oftheirworkforcewillneedtoreskillordevelopnewskillsinthatsametimeframe,underestimatingwhat’sneededtosupportemployeesintheAItransformation.

Almost9in10executivesclaimtohaveclearorganizationalstructures,policies,andprocessesforAIgovernance.

Butfewerthanone-quarteroforganizationshavefullyimplementedandcontinuouslyreviewtoolsonAI

governance,puttingbrandtrustatrisk.

2

IndustryexecutivesprojectthatAI’scontributiontorevenue

growthwillincrease133%from2023to2027.

ConsumersarereadyforAI.Areyou?

Consumersaretech-savvytrendsettersandbrandsneedtokeepuptostayrelevant.Today,customersandshoppersareactivelyengagedwithAIintheirdailylives,fromusingAI-poweredsearchenginestocreatingcontentwithgenerativeAItools.

Inthe2024IBMInstituteforBusinessValue(IBMIBV)consumerresearchstudy,

nearlytwo-thirdsofconsumerssaidtheyhaveusedorwanttotryAIapplications.1Thisinterestsetsthestageforretailandconsumerproductscompaniestohasten

integrationofAIacrosstheirbusinesswhilekeepinganeyetowardbecomingAI-ledbrands—leveragingthetechnologytoreimagineoperations,inspireloyalty,and

expandthesizeofcustomers’walletsforlong-termcompetitiveadvantage.

Ourlatestsurveyof1,500globalretailandconsumerproductsexecutivesfinds

organizationsareacceleratingtheiradoption.AI—bothtraditionalandgenerative—haspermeatedallfunctionsintheenterprisetosomedegree.Frommarketingandcustomer

service,tosupplychainandprocurement,tofinanceandIToperations,AIusecasesspanbrand-defining,business-enabling,andcorporateoperations.Lookingahead

through2025,mostexecutivesarethinkingbig,expectingAItobeusedextensivelyacrossthebusiness(seeFigure1).IndustryleadersalsoreportAIspendingisontherise(seePerspective,“AIspendingmovesoutsideofIT”),andtheyprojectthatAI’scontributiontorevenuegrowthwillincrease133%from2023to2027.

RetailandconsumerproductsorganizationsareatapivotalpointintheirAIjourney.

Thequestionis:aretheytakingenoughoftherightstepstobecomeAI-ledbrands,

oraretheyjusttackingonadhocAIsolutionsthatdelivershort-termgains?It’stimetomovebeyondjustproductivityandefficiencyandextendAI’spowerenterprise-widetoboostprocesseffectiveness,sparknewbusinessmodelsandecosystems,and

igniteengagementwithinnovativeemployeeandcustomerexperiences.

3

FIGURE1

Retailandconsumer

productsorganizations

plantouseAIextensivelyin2025.

PercentoforganizationsplanningtouseAItoamoderateorsigni?cantextentoverthenext12months

Marketingandcustomerexperience

89%86%86%85%

>_

Brand-de?ningareas

79%

Digitalcommerce

Merchandising

Customerservice

Stores

Productdesignanddevelopment

76%

90%

Supplychainoperations

Business-enablingareas

Sustainability87% Procurement86% Productionandmanufacturing83%

ITandsecurity

Finance

90%90%

Corporateoperations

HR88%

Percentagesrepresentanaverageofresponsesforasetoftasksineachfunctionalarea,basedonthequestion:“TowhatextentdoyouuseAIorgenAIinthisactivity?”Respondentsreplied“toamoderateextent”or“toasignificantextent.”

Inthisreport,wediscussthreefactorsthatwillhelporganizationsmakeafundamentalchangeintheir

DNA,whereAIemergesasthedrivingforcebehind

everydecision,innovation,andstrategy.Inpartone,wediscussbalancingthemarathonwiththesprinttoshiftfromplus-AItoAI-first.Inparttwo,weexaminetheneedtopreparetheworkforcefortheplanned

rapidandaggressiveAIadoption,andinpartthree,weaddresstheimperativetosafeguardconsumer

trust.Eachsectionincludesanillustrativecasestudyandconcludeswithanactionguideofstepsbrands

cantaketoaccelerateprogress.

Definitions

Traditionalartificialintelligence

Systemsthatunderstand,reason,learn,andinteract.AItechnologyincludesmachine

learning(ML)approaches,butalsoothertechniquessuchasreasoning,planning,scheduling,andoptimization.

GenerativeAI

Aclassofmachinelearningthatgeneratescontentordata,includingaudio,code,

images,text,simulations,3Dobjects,and

videos—usuallybasedonunsupervisedor

self-supervisedlearning.Recentexamplesof

generativeAIincludeGPT-4(language),DALL-E(images),GitHubCopilot(code),andAlphaFold(scientificproteinfolding).

4

Perspective

AIspendingshiftsbeyondITbudgets

AIbudgetallocationisundergoingasignificantshift.

WhileITbudgetswillstillplayarole,retailand

consumerproductsexecutivesreportagrowing

portionofAIspendingismovingoutsideoftraditionalITbudgets.AsAIbecomesmorethanjustatechtool,functionalareasareidentifyingtheirneedsforAIas

partoflargerbusinesssolutions,fromcreative

marketingtoolstoempoweringstoreassociatestonewwarehousemanagementsystems.

ExecutivesprojecttheirITbudgetdedicatedtoAI

spendwillincreaseby19%overthenextyear,but

spendingonAIoutsideoftheITbudgetisexpectedtosurge52%.Asapercentofrevenue,ITspending

onAIwillbe1.04%andAIspendingoutsideofIT

willbe2.28%by2025.Takentogether,3.32%of

revenuecouldbededicatedtoAIspendingnextyear.Fora$1billioncompany,thatequatesto$33.2

millionfortotalAIspend.

Withatleast13functionalareasthatspanretailandconsumerproductsorganizations,executivesacrosstheC-suitemustkeeptabsontheinvestmentsbeingmadeineacharea,coordinatingplatformsandtoolstoprovidetransparencyacrosstheenterprise.

ITandthebusinesslinesmustworktogethertoavoidduplicationofeffortandtohelpensureconsistent

alignmentwiththeoverallbusinessstrategy.

Partone

Buildinganintelligentbrand

thatendures

Consumerorganizationsneedtotakealong-termviewoftheirAIjourneywhilemovingwithurgencyandintent.

Only54%ofexecutivesexpectAItohelptheircompaniesinnovatein

operations.

NearlyallindustryexecutivesarebankingonAIforinnovationinproductsand

services(89%)aswellasbusinessmodels(85%).Butamere54%expectAIto

influenceoperationalinnovation.TransformingoperationswithAIacrosssupply

chains,manufacturing,distribution,finance,andcomplianceistheveryessenceof

beinganAI-centricbrand.Thisremodelisbothamarathonandasprint—movingfromsimpleAIusecasestoorchestratingAIacrossfunctionstodeliversustainablevalue.

Manyorganizationsareintheearlystageofadoption,integratingAIwithinasingle

function.Forexample,88%useAItoamoderateorsignificantextentindemand

forecasting,87%forHRhelpdesks,84%forITsupportandissueremediation,84%increatingandmanagingtradepromotions,81%ininventoryandordermanagement,and80%inmanagingproductionactivities.Thesearequickwinsthatcandeliver

amoreimmediateimpactondailyoperations.

ButcompaniesarekeenonexpandingtomoresophisticatedusesofAIoverthenext12months.Theywillbetransitioningfrominternaldepartmentalusecaseswith

limitedsystemintegrationtomultifacetedonesthatrequireexternalcollaboration,morecomplexsystemintegrations,andmorehumaninterventionandoversight.

Takevirtualassistantsasanexample(seeFigure2).Initially,theyrespondedto

simple,predefinedqueriessuchasorderandshipmentstatus.Astheyhavebecomemoreintegratedwithdatainorderingsystems,theycanidentifydelaysormissing

ordersaswellasback-orderoptionsandin-storeavailability.Addingcustomer

shoppinghistoryandgenerativeAIcapabilitiestotheirarsenal,theycandynamicallyrecommendofferingsandpersonalizedcontentforindividualcustomers.Camping

World’svirtualassistant,Arvee,illustratesthevalueofintegratingplatformssuch

asOracleandSalesforcesothattheassistantcanaccesscustomerinformationefficientlytoaddressqueriesfaster.2

5

6

ExecutivesexpecttoexpandrapidlytomoresophisticatedAIusecasesacrosstheenterprise.Forexample,thoseleveragingAItoasignificantextentforpersonalizedresponsesandfollow-upactionsincustomer

serviceplantoincreasetheirusageby236%overthenext12months.Similarly,theywanttogrowsignificantAIusageinintegratedbusinessplanningby82%andintalentacquisitionby300%.

FIGURE2

Brandsarefuelingvirtualassistantswithmore

comprehensive,relevantenterprisedatatoenableincreasinglypersonalizedresponsestocustomers.

Icanprovide

shipmentstatusandtracking

information.

WhenIamconnectedtothe

ordermanagementwarehouseandstoreinventorysystem,

Icanprovideoptionsfor

backordersandin-storepickupoptions.

WhenIhaveaccessto

customerpro?lesandshoppinghistory,Icandynamically

recommendofferingsandpersonalizedcontentforindividualengagement.

Asorganizationsprogresswiththeirinitiatives,theyareinvestinginplatformstointegrateAItoolsand

models.Today,astheyestablishtheirAIfoundation,theyareprimarilyfocusedondataandanalytics

platforms(65%),innovationplatforms(64%),andskills/learningplatforms(62%).Buildingontheseexistingplatformsandexpandingtootherswill

enablefederationandorchestrationofAIacrossfunctions,facilitatingcross-functionallearningtosupportscalingAIacrosstheenterprise.

ExecutivesplantointegrateAIcapabilitieswith

businesspartnersoverthenextthreeyears,andtheypredicttheuseofecosystemplatformswillsurge

from52%todayto89%.Taketheproductcomplianceecosystemasanexample.Byintegratingend-to-endAI-drivencompliance,brandscanensureallfacets

oftheproductlifecyclealignwithevolvingregulatoryrequirements,consumersafety,andsustainability

expectations.Thisecosystemprioritizesacceleratedproductlifecyclemanagementwithanadvanced

businessrulesengineandtouchlessbill-of-materialsgeneration,helpingensureproductsaremarket-

readywithminimalmanualintervention.

Executivesexpecttheiruse

ofecosystemplatformsfor

AItoolandmodelintegrationtosurgefrom52%todayto

89%inthenextthreeyears.

Casestudy

KrogerusesAI

toelevatecustomerpickupexperiences3

Krogerhaslongdependedondataandadvancedanalyticstofuelbusinessinnovation.Sinceits

inceptiondecadesago,itsloyaltyprogramhasdeliveredatrustedvalueexchangeenabledby

permission-basedinformation.Today,usingmachinelearningalgorithms,Krogerdeliversvaluable

personalizedoffersandcommunicationsacross

150millioncustomertouchpointsandthrough

1.9billionuniquecouponscustomizedformillionsofloyalcustomers.

Mostrecently,Krogerhasbeenexploringways

touseAItohelpimprovethecustomerexperience,

specificallyorderpickups.UsingAI-enableddynamicbatching,anAIsolutionsortsthrough200,000totespersecondtobuildthemostefficientpickuptrolley.Itdrivesa10%reductioninstepsbyidentifyingthe

mostefficientpickroutethroughthestore.With

dynamicbatchingoforders,thesetoolsareproviding

associatesthemostefficientpickroutes,soKrogercandramaticallyreducepickupleadtimeinits

highestvolumestores.

7

Actionguide

IntentionallyembedAIinoperations

todeliverasustainablebrandadvantage.

Inthe2024IBMIBVCEOstudy,70%ofretailandconsumerproducts

CEOssaidthattowinthefuture,theymustrewritetheirorganizational

playbook.4AsyouredefineyourcoreoperationalstrategiesandprocessestocapitalizeonAI,concentrateonhowtoachievelastingvalue.

TailorAItoyour

brand’spriorities.

AsyoumovebeyondAI-drivenproductivitygains,youneedaclearvisionandstrategyforwhereAIandgenAIcanhelpyoudistinguishyourselffromcompetitorsorshore

upweaknesses.Butkeepinmindthatconsumersexpectyoutostaytruetoyourcorevaluesasyouinnovate.Ifastrongcustomerexperienceisyourfocus,useAIto

personalizecustomerserviceandoptimizein-storeexperiences.Ifproductinnovation

isadifferentiator,tapintoAIforproductdesign,customerpreferences,andvendorcapabilitiestofacilitatefasterideationanddevelopmentcycles.Thekeyisto

concentrateonwhat’smostimportant—noteverythingthat’spossible.

Invitefinance,

technology,and

businessleaderstothesametable.

BecominganAI-centricbrandrequirespurposefullyaligningITwithlong-term

businessgoals,notjustthehottesttech.Forexample,organizationsthatconsider

applicationsandinfrastructureholisticallyinsupportofbusinessneeds(knownas

“hybrid-by-design”principles)cangeneratemorethanthreetimeshigherROIover

fiveyears.5Teardownthesilosbetweenfinance,technology,andbusinessleaderssothattogether,theycanbuildsolidbusinesscasesforwhereAIcandeliveralong-termcompetitiveedge.6

Venturebeyondtried-and-truepartnerships.

Traditionalstrategicpartnershipsfocusedonphysicaldistributionofsuppliesand

productsarenolongerenoughintheageofAI.Techcompanies,startups,andother

nontraditionalpartnersareneededformodeldevelopment,platforms,andtools.

Forexample,otherIBMIBVresearchfoundthat65%oforganizationsarealready

workingwithorplanningtoworkwithastrategicpartnertobuildalargelanguage

modelforgenerativeAIinitiatives.7Prioritizepartnerswhounderstandyourgoalsandshareyourvision.Identifythosewithaprovenrecordforintegrationandloopthem

intoyourprocessesearly.Thinkoutsidethebox,imaginingnewpartnersthatcreatenewopportunitiesforgrowth.

8

9

Parttwo

Primingtheaugmentedworkforce

AIistransformingthenatureofworkfromthestoretothefactoryfloor,butindustryexecutivesundervalueworkforcereskilling.

AIisdiffusedthroughouttheretailandconsumerproductsworkplace.Nearlyall

(96%)executivessaytheirteamsareusingAIandgenAItoamoderateorsignificant

extentatwork.WhenvirtuallyeveryoneisusinganewandpowerfultechnologysuchasAI,thenvirtuallyeveryoneneedstrainingtooptimizethevalueandunderstandtherisksthatcoulddamagethebrands.Yet,leadersprojectonly31%oftheirworkforcewillneedtoreskillordevelopnewskillsoverthenext12months,withthisnumber

climbingtojust45%inthenextthreeyears—asignificantmiscalculation.

Bothhardandsoftskills—frompromptengineeringanddataanalyticstocritical

thinkingandproblemsolving—areessentialtousheringintheageoftheaugmentedworkforcewhereAIwon’treplacepeople,butpeoplewhouseAIwillreplacepeoplewhodon’t.8Thetalenttransformationisanongoingtrainingandeducationprocess

thatmustbedefinedandstartedsoonerratherthanlater.Ifnot,67%ofemployeeshavesaidtheywillleaveforanotheremployerthatprovidesbettertrainingonnewtechnologies,accordingtoanIBMIBVsurveyofmorethan21,000workers.9

Executivesrecognizetheworkforcewillbeincreasinglyaugmented,whileautomationremainscrucialforrules-basedtasksandrepetitivework.Across13functionalareasfrommarketingandcommercetosupplychain,HR,andIT,theyplantomore

frequentlyaugmentthanautomateactivitiesoverthenext12months(seeFigure3).

Industryleadersknowthatmanybrand-definingareasdemandhumanintuition,

creativity,emotionalintelligence,andexpertisethatcanbecomplementedbyAI.

Forexample,inproductdesignanddevelopment,AIcanaccelerateideageneration

Leadersprojectonly

31%oftheirworkforce

andideation,evenprovidingvisualizations.Likewise,operationalareashavevast

amountsofdatawheredecisionsrequirehumanoversight,suchassupplyplanning,

willneedtoreskill

where54%plantoaugmenttheiremployees.Inthisactivity,AIcanquicklyaccess

ordevelopnewskills

andanalyzeabroaderrangeofdatatohelpthesupplyplannerconfidentlyresolve

overthenextyear.

shortagesinminutes,knowingimportantinformationisnotmissed.

10

12%

31%

58%

14%

28%

57%

FIGURE3

Retailandconsumerproducts

executivesknowthat

automationhasitsplacebutseeafutureofaugmentation.

Percentofactivitiesthatwillbeautomated,augmented,or

havenoimpactfromAIineachareaoverthenext12months

>__

Brand-de?ning

areas

14%

33%

54%

Business-enablingareas

10%

35%

54%

Corporateoperations

Automated

Noimpact

Augmented

14%

32%

54%

13%

35%

52%

15%

35%

50%

21%

32%

47%

11%

35%

54%

12%

37%

51%

8%

43%

49%

12%

36%

52%

9%

40%

51%

Digitalcommerce&B2Bsales

Productdesign,development,andproductlifecyclemanagement

Merchandising/

categorymanagement

Marketing

Customerservice

Stores

Sustainability

Procurement

Supplychainoperations

Production

andmanufacturing

HR

Finance

IT

Percentagesrepresentanaverageofresponsesforasetoftasksineachfunctionalarea,basedonthequestion:“TowhatextentdoyouuseAI

orgenAIinthisactivity?”Respondentsreplied“toamoderateextent”or“toasignificantextent.”

Ultimately,brandswillbefindingthesweetspotforautomationandaugmentation.Takemanagingtheseasonalworkforceasoneexample.AI-powered

automationcanstreamlinehiring,onboarding,

andschedulingprocesses,reducingadministrative

burdensandhelpingcontrolcosts.ManagerscanuseAI-poweredtoolsthatprovidereal-timeinsightsintostaffingneeds,predictdemandfluctuations,and

optimizeschedules.Similarly,ininventory

management,AI-poweredsensorsandcameras

automaticallymonitorinventorylevelsinrealtime,whileprovidingemployeeswiththeinsightsneededtoreducetheriskofstockoutsoroverstocking.

Evenareasthathaveahighdegreeofautomation,suchascustomerself-service,canbenefitfrom

augmentedemployees.AsexecutivesexpanduseofAIforpersonalizedresponsesandfollow-up

actionsoverthenext12months,theysay55%oftheactivitieswillbeaugmentedversus30%beingautomated.

Brandsarefindingthe

sweetspotforautomationandaugmentation.

Casestudy

JapaneseretailerempowerspeoplewithAItoboostprofitswhilereducingwaste10

AleadingretailcompanyinJapanwasgrapplingwithcostlyproblem:foodandconsumer-goodswastewaseatingawayattheirprofits.Theclient’sfieldstaff

neededdata-driveninsightstomakemoreinformedpricingdecisions.

Forawidevarietyofproductsandthecompany’s

operations,priceoptimizationreliedmoreheavily

onhumanjudgmentthandata,leadingtovariationsincustomerforecasts,stocklevels,anddiscountrates.Thesevariationsresultedinexcessiveandinadequatestocking,irregulardiscountamountsandtimings,

andlargeprofitlossesduetofoodwasteandmissedsalesopportunities.

ThecompanyworkedwithIBMtodevelopaspecializedpriceoptimizationAIsystemtoanalyzevastamountsofdata,predictcustomernumbersandpurchase

patterns,andsuggestoptimaldiscountamountsandtimings.Nowtheclient’sfieldstaffcancombinetheirownexpertisewithdatatoimprovepricingdecisions.

Thepricingoptimizationsystemwasdesignedtoadapttodifferentproductcategoriesandsell-bydurations,

makingitaversatile,scalablesolutionthatcansupportadiverseproductrange.

11

Actionguide

Prepareyourworkforce

topoweryourAI-centricbrand.

AIisclearlyimpactingvirtuallytheentireretailandconsumerproductsworkforce—fromthepersonstockingtheshelvestothosewhositwithyouintheC-suite.It’sbeingbuiltintomanyofthetoolsemployeesuseeveryday,suchasAI-poweredsalesforecastingtoolsorAI-driven

designtools.LeadersneedtoensureallemployeesarepreparedtooptimizethevalueAIcandeliver.

ConnectHR,IT,

ExecutivesreportleadershipforreskillingeffortsisdividedamonganAIcenterof

andbusinesslines

competence(31%),HR(22%),AIcommittees(18%),andIT(17%).Thisdisjointed

todefinereskilling

approachisriskyandcancreateconfusionandfrustrationamongemployees.

strategies.

LeadershipfromHR,IT,andthebusinessmustjoinforcestoshapeaneffective

reskillingstrategy.HRbringsbothanunderstandingofhowtomanagechangeand

culturealongwithtacticalimplementationexpertise.ITbringsthetechnology

knowledge,andbusinessleaderscanworkdirectlywithemployeestodefinehowAIcanaugmenttheworkforcewithineachbusinessdomain.HavethejointteamreportdirectlyintotheC-suiteanddefinemeasurestoholdthemaccountable.

Predictevery

Ifyouonlyexpectathirdofyourworkforcewillneedreskillingorupskillingoverthe

employee’s

nextfewyears,youaren’tthinkingbigenough.Justasyouforecastproductdemand,

potential.

predictwhatemployeeswillneedtosucceedinarapidlyevolvingworkplace.

Lookbeyondjustcurrentskillstoemployeepotential.UseAI-poweredHRtoolstoanticipatehowanindividualmightdevelop,perform,orcontributebasedonskills,talents,personalitytraits,experiences,andeducationalbackground.11

Shareablueprint

Youmaynotknowexactlywhatliesahead,butyoucancommunicateyourvision

fortheworkplace

forthefutureofwork.Fromroutinebusinessoperationstobrand-definingareas,

oftomorrow.

AIcreatesanxietyasemployeesworryaboutbeingreplacedornothavingtheskillstheyneed.ShareyourplansforautomationversusaugmentationwithyourworkforceandhelpthemseehowAIwillcreatenewopportunitiesandenablethemtodotheirjobsfasterandbetter—fromdesigningproductstocreatingpromotionstomanaging

inventory.Considerhowemployeeswilluse—andbenefitfrom—technologyascarefullyasyouconsiderthetechinvestmentitself.

12

13

Partthree

Safeguardingbrandtrust

Withsomanyproductsvyingforconsumers’attention,AIcaneitherbolsterorundermineabrand’strust.

TrustisparamountforbothconsumersandindustryCEOs.Our2024consumerresearchreportshowedthat9outof10consumersvaluetrustwhenchoosinga

brand.12Similarly,73%ofretailandconsumerproductsCEOsinour2024CEOstudysaidtrustwillhaveagreaterimpactontheirorganization’ssuccessthananyspecificproductorservice.13

ButAIaddsnewdimensionstotheissueoftrust,withrisksimpactingboth

businesspartnerandcustomerrelationships.ConsumersarealreadywaryofAIingeneral—only53%trustthetechnology,fallingfrom61%overthepastfiveyears.14Andwithinthepartnerecosystem,companiesneedtoknowthateachmemberis

practicingtrustworthyAI.

RetailandconsumerproductsexecutivesrecognizethatAIcreatesrisksthatcan

erodetrust.Ninein10saymisuse,suchascreatingmisleadinginformation,istheirtopworryassociatedwithAImodels,followedbyprivacy(85%),fairnessandbias(80%),

explainability(76%),andtransparency(73%).Forexample,biasedmodelscanalienatecustomers.Oneconsumersurveyrevealedthatalmosttwo-thirdsof

consumersavoidAI-fueledrecommendationsbecausetheyarebiasedorstereotypical.15

Atthesametime,theserisksareslowingprogresswithgenerativeAIopportunities.

57%ofexecutivessaydataaccuracyandbiasisabarriertogenAIadoption.55%alsociteprivacyandconfidentialityofdataand54%areconcernedaboutcybersecurity.

Despitetheseconcerns,organizationsarestrugglingtoenablethetoolsthatcanhelpthemmanagetherisks.Companieshavecreatedafoundation:87%ofexecutivessaytheyhaveclearAIgovernancestructures.Butlessthanaquarterofcompanieshaveadvancedimplementationoftoolstoassess,monitor,andmanageAIgovernance

90%ofexecutivescitemisuseas

theirtopconcernwithAImodels.

(seeFigure4).“Showingyourwork”—designingsolutionswithexplainabilityand

transparencybuiltin—willbecriticaltoinstillingconfidenceinconsumersregardingyouruseofAI.

14

FIGURE4

FewbrandshaveadvancedimplementationoftoolstohelpthemmanagetheirAIgovernancepoliciesandactivities.

11%

ApproachtoAIgovernanceAdvancedimplementationoftools

84%

havede?nedrolesand

responsibilitiesforallstakeholdersinvolvedinAI

accountabilitytools

16%

haveadvancedimplementationofAI

91%

conductethicalimpactassessmentstoevaluatetheimpactofAI

initiativesondifferentstakeholders

haveadvancedimplementationofAI

biasandfairnesstools

87%

haveestablishedclearorganizationalstructures,policies,andprocesses

23%

forAIgovernance

governanceframeworksorpolicy