The generative AI race is moving at the speed of light. This week, OpenAI announced the release of ChatGPT 4 and according to the news its “the most advance system, producing safer and more useful responses”. Google also announced that it will bring its generative AI model into its workplace suite. Microsoft started testing generative AI for Microsoft Dynamics. However, the market is questioning if these players are bringing AI technology without the proper validation and testing.
One thing is true, Generative AI capital investment went from $500 million to more than $2.1 billion (2020 vs 2022) and according to Gartner, by 2025, the AI software will hit $134.8 billion. Generative AI is the buzz word and is getting attention from the market, venture capitals and consulting companies.
Management consulting and the race for Generative AI
- Boston Consulting Group announced today that it is collaborating with OpenAI for client delivery purposes.
- Bain & Company announced a service alliance with OpenAI to be used for its internal knowledge management, research, and prep for client delivery.
- Consulting and SI companies realized that to bring quick value to clients and accelerate delivery, they need emerging technology and point-solutions to expand their footprint and enable revenue growth.
What is next?
- The race for generative AI will continue for the rest of the year. New players will join the party bringing new offering and services. Keep in mind this technology is still in early stages and companies need diligence around responsible AI, safety, and data privacy.
- Consulting firms will follow and start building out partnership with OpenAI and/or other providers. This is a great opportunity for consulting companies to bring its consulting capability to wrap it around the technology.
- Big service technology/platform providers such as Salesforce, Meta, Apple etc. will follow too, to integrate and develop new technology around their current and future offerings.
HR Technology has a great start in Q1 2023
Despite SVB being taken over by regulators last Friday (shaking the startup ecosystem and creating fear and uncertainty across markets), strategic investments in HR technology continue in Q1 23. Qualtrics, a customer service and employee listening platform, announced they reached a definitive agreement to become private and be acquired by Silverlake for $12.5B in an all-cash transaction. This is the biggest HR Tech deal so far in 2023.
This acquisition is sending market signals in the HR Technology space, that venture capitals are willing to invest in solutions with compelling offerings, leading technology, and credentials around client delivery. However, is this a good deal for Qualtrics? Venture Capitals? Both?
What is the Impact?
- HR Technology companies have seen market value plummet and have been struggling to grow due to market uncertainty and client’s HR budget reductions.
- The last 12 months has been tough for startups and in order to survive, they have been reducing expenses, laying off people and focusing on being cost efficient to remain positive.
- Consulting and SI companies prefer to partner with vendors who offer a variety of capabilities to address multiple use-cases across the talent lifecycle.
- Vendors with unique capabilities in terms of deployment, user experience, certified AI models and/or approach to market have more changes to build these relationships.
- Preferred GTM partnerships are created before vendors reach the unicorn status.
- Vendors with certified integrations with leading HCM players is a big plus.
HR Tech Implications:
- Microsoft is taking the first step and piloting generative AI in its enterprise applications. Most likely, other leading HR platforms, such as ServiceNow, Workday, Oracle, SAP etc are working on this and planning head for 2024.
- From the HR ecosystem perspective, generative AI is a capability that point solutions are looking to incorporate in their offerings anytime soon. For example, Amelia (state of the art virtual agent/humanoid solution for customer service and HR) uses chatGPT as building block to generate its answer and support employees/customers.
- Talent data sits in different repositories (structure and unstructured data). ChatGPT can ingest, train, and analyze this information to address multiple use cases across the talent lifecycle. Responsible AI practices are required.
- ChatGPT needs to be governed, monitored, and supervised by internal experts. Talent and new set of skills are required to address this matter.
- HR Delivery services adjustments: ChatGPT could be the first level of interactions with employees. Systemic biases need to be taken it into account.
- HR Technology Architecture needs to be in constant evolution to interconnect point solutions with data repositories and the overall HR stack.
Overall, key questions for CEOs, CHROs and senior HR leaders:
- Strategy: What is your vision and strategy to leverage the power of emerging technologies to enable growth areas of the business?
- Operating Model: What is the right operating model that will allow us to facilitate decision making, adapt to the future of work and technology to address new customer requirements?
- Talent: What are the critical skills that drive future value creation and how we link talent to business growth?
- Data: How can we build data analytics across the enterprise to unleash the power of data for decision making?
- Change: What behaviors and/or ways of working might need to change to accelerate a hybrid work culture and adapt to new technology?
- Human resources: What digital HR capabilities are required to enable experience and adapt to new business demands?
Other relevant HR & Future of Work Technology News
2023 is a year of reinvention and disruption. HR plays a key role to enable change and translate business needs into talent practices.
More to come! Stay tuned.
Note: All views expressed in this article do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated. My opinions are my own.