Use our framework to win as a Generative Enterprise™

Today, HFS shares a new framework and three foundations that will help you deliver the goals of the Generative Enterprise™.

The concept of the Generative Enterprise™, introduced and elaborated by HFS Research (see: HFS on GenAI and the Generative Enterprise), helps you leverage AI technologies—particularly generative AI (GenAI)—to drive value creation, innovation, and operational efficiency.
Pay close attention to this new AI-led paradigm. It represents a transformational force with a similar scale of impact as offshoring and globalization.

Your framework for the Generative Enterprise™ through the lens of HFS OneEcosystem™

We have mapped out our framework for the Generative Enterprise™ through the lens of HFS OneEcosystem™ (see Exhibit 1).

OneEcosystem™ is where we venture beyond the walls of our organizations to collaborate with like-minded partners who share the common objective of anticipating customer needs. In a OneEcosystem™ enterprise, connected customer, employee, and partner experiences (EX, CX, and PX) create new value thresholds.

The Generative Enterprise™ framework sets the goals for a GenAI-led transformation (see the circle in Exhibit 1) and outlines how EX, CX, and PX must align to reflect and achieve those goals.

Exhibit 1: How EX, CX, and PX must align to deliver the core goals of the Generative Enterprise™

Source: HFS Research, 2024

Six goals ambitious leaders must strive to achieve

Our framework (see Exhibit 1) centers on six goals that leaders in ambitious organizations must strive for. You will know your business has become a Generative Enterprise™ when it is mature in each of these:

1. Constant innovation with AI: Your business leverages AI to drive constant innovation and generate new ideas, constantly redefining how your teams work. GenAI’s human-like cognition is applied to scale human innovation capabilities across the organization daily.
2. Enhanced and distributed decision-making: AI is applied to deliver real-time, data-driven insights to support better-informed decision-making at every level in the enterprise. This capability is distributed widely across all levels to enable rapid response.
3. Optimized operations: AI-driven automation is widespread and applied to take out costs and improve efficiency across the enterprise. It also provides the flexibility to respond quickly to your enhanced decision-making capabilities.
4. Human-AI collaboration valued and fostered: You have shaped your culture to include AI and human capabilities used in harmony. Managers are skilled in running teams consisting of bots and humans.
5. Responsible use of AI: Robust AI governance frameworks are in place and applied to ensure compliance with security, privacy, bias, and accuracy concerns across every line of business.
6. Market leadership with purpose: You lead and reshape markets through your use of technology and your alignment with the shared needs and concerns of partners, customers, and employees.

Three foundations you must have in place to build your Generative Enterprise™

To get started, every enterprise must prepare three critical foundations on which you can build your own Generative Enterprise™.

1. Inspired, forward-looking leadership: Generative Enterprise™ is more than the integration of technology. Large language models (LLMs), such as ChatGPT, Llama, Google Gemini, and Inflection AI, are essential elements—but what you do with them in combination with other technologies is what counts. You must go beyond the low-hanging fruit of cutting costs, raising content and code generation productivity, or answering customer queries. Three-quarters of executives anticipate GenAI will be a springboard for value creation, and 52% caution against overemphasizing productivity (see our report: The two-year GenAI countdown). You must exploit new ways of working and business models that GenAI’s lowered cost of ‘human-like cognition’ affords you and make AI a fundamental part of your business strategy, not just an add-on.
2. A new approach to enterprise operations: You must reframe enterprise operations through the lens of the new workplace paradigm: human-AI collaboration. AI can deliver value on its own. Humans can provide value on their own. However, great managers always know team cooperation offers the most outstanding outcomes. You must now recognize that your teams comprise humans and AI and that the magic will happen by getting them all to work effectively together in newly designed processes and workflows (learn more: Rethink enterprise ops as human-AI collaboration to thrive in the modern workplace).
3. Digital and data maturity: New firms will emerge, built from scratch in the GenAI age. They start life with digital technology and data processes natively aligned to support scalable GenAI. Amazon recently announced $230 million to fund start-ups in the space, for example. EY says venture capital investment in GenAI is on track to hit $12 billion this year. You must ensure your enterprise’s level of maturity matches that of the new wave of rivals. Your data capabilities must align with the GenAI needs, and your use of digital technology must be just as widespread and available to all critical teams as you would find among your newly emerging rivals. For example, read our report: 10 vertical specialists shaping the HFS Generative Enterprise™ ecosystem.

Why the journey to the Generative Enterprise™ makes business sense

Early adopters of GenAI technology are quick to predict a positive impact across all key business levers. HFS surveyed and interviewed 100-plus GenAI pioneers (read: GenAI will reshape business economics), and they—on weighted average—expect a relatively conservative but positive impact across cost, revenue, market valuation (or share price), overall productivity, and profitability (see Exhibit 2). They expect this shift to happen within 12 months.

If you fail to make the right moves right now, the speed of this shift will become an existential threat to your firm. GenAI’s impact will start small but scale quickly. Cost at the task or workflow level will be impacted first as productivity improves—but a significant number of our survey respondents also expect an early impact on profitability, revenue, and market valuation to appear in the next several quarters. We expect this impact will continue to increase for every company, job, process, or experience deriving value from software that can be turbo-charged with GenAI over the coming years.

Achieving the objectives of the Generative Enterprise™ will result in enhanced decision-making across the organization, as leaders can use aggregated and analyzed data from diverse sources to drive better-informed and more effective strategic decisions at a pace never seen before.

Exhibit 2: Embracing GenAI changes business economics—those who place GenAI capabilities at the core of their Generative Enterprise™ can expect an even more significant impact

Sample: 104 enterprise leaders actively exploring and deploying GenAI
Source: HFS Research, 2024

Generative Enterprise™ leaders enjoy an uplift in operational efficiency—as their firms automate the routine, optimize processes, and lower costs. The time this frees up for them and the swift insights they receive shines a new spotlight on innovation. When you can learn about the market in close to real-time and have established new processes integrating that insight to adapt rapidly, you hold all the cards to maintain competitive advantage.

The Bottom Line: Use our framework to guide you to ‘what’ must be done. You must now decide your ‘why’ in order to shape your ‘how’.

AI is reshaping the competitive landscape. The Generative Enterprise™ represents a coherent framework for making sense of this AI-driven transition period and helping you decide what to do in response.

Our framework is intended to inspire you to drive change. It remains in the control of each enterprise as to what direction that change will take—and toward which outcomes you choose to target. Setting out your clear purpose (your unique why) will help shape how you lead and reshape markets with your version of the Generative Enterprise™.