Artificial intelligence (AI) is shaking up everything. So, why not product development as well? From augmenting software development processes to shaping the products and services themselves, AI is having a dramatic impact. Companies that don’t embrace the opportunity fast will get left behind.
It’s no exaggeration to say that we live in a digital world. According to ICD and Forbes, the top 2,000 companies in the world will get 40% of their revenues from digital products by 2026. From cars to toothbrushes, every other consumer product seems to come with its own app these days. Companies are realizing that a digital overlay can transform customer experiences, and inspire loyalty, which can only be a good thing in today’s fickle, competitive markets.
Work smarter
We’re in the middle of a hype curve for AI. And yet, the hype is justified. According to IBM’s global head of Research, almost all the world’s publicly available data has been ingested by generative AI (Gen AI), compared to virtually 0% of company data. The first organization to unlock this value will have a colossal competitive advantage.
AI can deliver dramatic productivity gains for product and service development. You can incorporate it into every stage of the product lifecycle, from research and development to post-sales support. For example, rather than the cost and effort of conducting end-user research in the field, you can use Gen AI to simulate personas and get results in a fraction of the time.
That’s not all— AI can enable huge savings by allowing you to define a new function or feature, generate the code automatically, and then run it through a dizzying number of test scenarios. Early benchmarks show that harnessing AI throughout the development process for new products and services can enable productivity savings of as much as 40%1.
Driving a product mindset
Customers expect more from products and services than ever before. It’s not just an item—it’s an experience. Companies that fail to pick up on this trend and understand what drives value run a significant existential risk.
Enterprises in every industry are reinventing themselves, organizing around product-based innovation to ensure they stay relevant. By infusing products and services with AI, you can drive up customer engagement and improve efficiency in one fell swoop: truly a win-win.
For example, we recently worked with a retailer that now resolves 82% of customer contacts using a Gen AI agent. We also helped build a Gen AI front-end for a bank that allows customers to access all products seamlessly. At the same time, it gives the bank a 360-degree of each customer and their individual preferences.
Seeing past the obstacles
To deploy Gen AI at scale, companies need operating model blueprint that’s intentionally designed to embrace new product-based mindset. Without a single, shared layer for their application platform, data-sharing and governance—and, crucially, the Gen AI models—they will struggle to innovate.
Some companies are wary of the significant compute power that AI demands. However, technology companies are investing huge amounts in making infrastructure resources more efficient and cost-effective, so this is a barrier that will get lower and lower over time.
There are other barriers to overcome. Just as in every other technological revolution throughout the ages, employees need to be reassured that new solutions will augment rather than replace them. Invest in taking people on the Gen AI journey with you, reskilling them and helping them make the most of new capabilities to thrive.
About the Author
John Sullivan is the Managing Partner for IBM iX EMEA. Within his role, John leads a team of dedicated experts who help clients adopt digital technologies and capabilities to create new experience-led digital processes, products, and services to deliver growth and productivity.
