Enterprises are starting to drive productivity and cost savings from generative AI with AT&T among the most vocal about returns. The catch: These returns require investment in IT and data infrastructure.

Although it's early in earnings season, the early returns are that enterprises are seeing generative AI as a cost savings tool that's much needed given the higher cost of capital due to interest rates. Rest assured enterprise software vendors will be rolling out customer citations to prove their generative AI worth. Vendors are scrambling to provide a generative AI magic bullet with fun names, domain specific LLMs and add-ons that add up.

John Stankey, AT&T CEO, said generative AI is driving cost savings at the company. He said during the company's third quarter earnings call:

"While we're still in the very early stages of Generative AI, we're already seeing tangible AI-driven improvements in productivity and cost savings. Measurable progress has been made with lowering customer support costs, unlocking software development efficiencies, and improving our network design effectiveness. We expect these capabilities to play a key role in our continued efforts to achieve our future cost savings objectives."

AT&T didn't reveal the savings attributed to generative AI, but the technology is part of a bigger picture. The company is generating strong cash flow and paying down debt amid higher interest rates.

And AT&T isn't alone.

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Wipro CTO Subha Tatavarti said during the company's earnings call that the company has "adopted Generative AI to streamline our technology business processes as well as people."

Tatavarti noted that it's early, but it appears that there are multiple areas of productivity gains. He said Wipro is seeing productivity gains in the following:

  • HR "especially around background checks." Tatavarti said generative AI is also playing a role in hiring, retention, training and managing.
  • Quality assurance and testing has used generative AI to cut the time and hours to perform functional testing.
  • Multiple other pilots are showing early gains. "A lot of our work is now being streamlined, at least in early parts of our work with Generative AI in are very positive and encouraging in terms of productivity gains," he said.

Domino's Pizza CEO Russell Weiner plans to streamline operations and quality control via a generative AI partnership with Microsoft. 

For Concentrix, Chris Caldwell, CEO, said on the company's earnings call that it is accelerating its generative AI adoption internally and with clients. Caldwell said:

"From an internal productivity perspective, our AI and Alex-based recruiting platform now supports 8.6 million career site visits and processes 3.3 million applications already this year. It has already allowed our team to scale more cost effectively and we see additional benefits as we continue the roll out across our enterprise."

Caldwell added that it is also using AI for its scheduling and peak management for staff as well as supply insights for daily work optimization.

Companies in the financial sector are also looking for efficiency gains with AI. FactSet CEO Phil Snow said generative AI is bolstering coding and customer service. Snow said:

"We also see significant opportunity for cost savings as a result of GenAI projects targeting our efficiency. In fiscal 2023, we began to pilot AI coding initiatives to improve the productivity of our technologists. We also started using our agent assist bot to help with client queries and we are accelerating the collection of unstructured data across our content refinery."

Blackrock CFO Martin small also said AI has the potential for internal cost savings as well as products for its massive client base. He said:

"We've been using artificial intelligence, machine learning, natural language processing in our systematic business going back 20 years. And we have teams all over these things for how we can scale trading, pricing, operations, client service and even automation to make our software engineers most productive."

"If you ask me, where are we going to focus investments going forward with a particular sharp eye, I look at our total annual operating expense of about $11 billion and our largest fixed investments by dollars and importance, that's our really talented BlackRock employees."

"Giving (employees) more tools to enhance productivity, from large language models to better CRM, tools that help clients customize and self-service, like our BlackRock Advisor Center, those are going to be some of our best opportunities to deliver long-term profitable growth."

UnitedHealthcare's Dirk McMahon, chief operating officer, said that AI is critical for productivity, but it's also about freeing humans up to engage customers.

"We're leveraging the latest technologies to create greater operational capacity and productivity, so we can better serve consumers and focus on the highest value work. Our teams are significantly improving how quickly we respond to the millions of benefit questions we receive each year. We are using AI and natural language processing to expedite call documentation, to rapidly generate accurate summaries of consumer interactions with our contact centers, saving millions of dollars in administrative work and freeing up capacity for our people to prioritize engagement."

These stories are notable at this early stage in generative AI adoption, but there is a rather large catch: You need to have your data game down. It's not a big surprise that the companies so far leveraging AI and driving returns have core businesses that revolve around data and IT. Other AI success stories include:

For the rest of you, it's imperative to shore up your data operations.

AT&T's Stankey tells the tale. The company has been overhauling its systems for multiple quarters but that ultimately sets up transformation enabled by AI. He said:

"I mentioned to you many quarters ago that we've been investing in our information technology infrastructure. It's been painful, it requires a lot of work, and it's very detailed work every time you change out a CRM system or billing system. You have to carefully deal with your customer base and your different distribution channels. We're now getting to the point where we're starting to turn some scale up on those platforms. That coupled with the fact that more of our activity is built on fiber and wireless is giving us a different kind of cost structure in the business."

Business Research Themes

Data to Decisions, Future of Work

Roles

Chief Data Officer, Chief Information Officer

Tags

#GenerativeAI, productivity