The CEO’s Guide to Generative AI

What you need to know and do to winwith transformative technology IBM Institute for Business Value The IBM Institute for Business Value (IBM IBV) delivers trusted,technology-based business insights by combining expertise fromindustry thinkers, leading academics, and subject-matter expertswith global research and performance data. The IBM IBV thoughtleadership portfolio includes research deep dives, benchmarkingand performance comparisons, and data visualizations thatsupport business decision-making across regions, industries,and technologies. To stay connected and informed, sign up toreceive IBM IBV’s email newsletter at ibm.com/ibv. You canalso find us on LinkedIn at ibm.co/ibv-linkedin. The CEO’sGuide toGenerative AI What you need toknow and do to winwith transformativetechnology Contents Foreword1 IntroductionLeadership can’t be automated3 Chapter 1Talent and skills9Chapter 2Customer service19Chapter 3Customer and employee experience29 Section 2AI-powered data and technology39 Chapter 4Platforms, data, and governance41Chapter 5Open innovation and ecosystems51Chapter 6Application modernization61Chapter 7Responsible AI and ethics71Chapter 8Tech spend81 AI-fueled operations91 Chapter 9Supply chain93Chapter 10Marketing103Chapter 11Cybersecurity113Chapter 12Sustainability123 ConclusionLay the groundwork for greatness133 Will thenext industrialrevolution bedefined bygenerative AI? Kareem Yusuf Jonathan Adashek Rob Thomas Salima Lin John Granger Joanne Wright Senior Vice PresidentMarketing andCommunications, andChief Communications OfficerIBM Senior Partner andVice PresidentStrategy, Transformation,and Thought LeadershipIBM Consulting Senior Vice PresidentTransformationand OperationsIBM Finance andOperations Senior Vice PresidentSoftware and ChiefCommercial OfficerIBM Senior Vice PresidentProduct Managementand GrowthIBM Software Senior Vice PresidentIBM Consulting CEOs are used to being in the hot seat. Only the toughest problems land on theirdesks—and how those problems are solved often defines an organization’s future. Foreword Generative AI is a defining moment. In the next industrial revolution, making the rightinvestments in this emerging tech and empowering people with skills to work creatively,productively, and responsibly with generative AI will create a multiplier effect forbusinesses. But the wrong bets could open the door to data privacy concerns, legalliabilities, and a whole host of ethical issues. What will help CEOs accelerate the adoption of generative AI? How can they scalesafely and responsibly? IBM’s long history of using technology to make the world work better puts us in a uniqueposition to help CEOs answer these tough questions. This book captures the insightswe have collected from primary research, as well as direct CEO conversations and usecase pilots with their teams as they navigate the generative AI opportunity. This followsdecades of engagement with clients as we have worked with them to apply AI and drivemeaningful change for their businesses. We’ve distilled our in-depth knowledge of this evolving technology—and the results ofour rapid response research—into specific insights and actions CEOs can use in theirbusinesses today. Throughout 2023, the IBM Institute for Business Value (IBM IBV)interviewed nearly 6,000 CEOs and other members of the C-suite globally about wherethey expect generative AI to make the biggest impact, how they plan to invest, and whatobstacles they will need to overcome along the way. Our findings paint the future in an auspicious light. They highlight a multitude ofnew challenges, but also showcase strategies that can help CEOs capitalize onthe generative AI moment. It’s an exhilarating time to be an executive. Like the titans who led the world throughthe last industrial revolution, we’re now charged with redefining human-machinepartnerships. In this transformative time, CEOs must envision what the enterpriseof the future will look like—and inspire their teams to make this vision a reality. Leadership can’tbe automated Generative AI promises to fuel revolutionary innovation and transformative growth.But driving change demands personal intervention. What does that mean for CEOs? It starts like any other major transformation—defining whatthe enterprise wants to achieve, ensuring those goals are tightly coupled with strategy, anddefining actionable next steps. Tactics are where things start to get tricky. In each area of the organization, leaders needto assess where work can be streamlined and augmented—and how generative AI canbe used to deliver greater value every day. Data is an essential piece of the puzzle,but differentiating insights can only come from a human mind. That’s where the augmented workforce comes in. As AI ups its IQ, CEOs must rethink howwork gets done. With generative AI assistants, employees can work faster—and fill multipleroles. Rather than playing a single instrument, each employee can conduct an orch