Three Pragmatic Justifications for Integrating AI Agents into Your Business Operations
Co-Leader and Head of NVIDIA, Jensen Huang, has expressed his ambition for his company to expand from its current workforce of 36,000 employees to a force of 50,000 workers and 100 million AI agents. I refer to this blend of human and digital workers as the 'Hybrid Network'.
As we approach 2025, this query should cross the mind of both established businesses and start-ups alike: "How many digital workers should my organization incorporate by the end of 2025?" The response to this question varies for each organization, given that 2024 marked the year of Generative AI trial runs, and 2025 will witness the first wave of significant implementation due to three primary reasons.
Reason 1: Capital Substitution for Labor
I am currently examining the financial aspects of automating call centers using and without the aid of Generative AI. My analysis shows that $30 in daily AI 'tokens' (AI models operate on individual words or images referred to as tokens) can automate the majority of a call center employee's job in the United States, where the average daily salary is around $300. By investing in digital workers, we can achieve half or more of a human worker's productivity for just 10% of their wage, leaving $290 to further automate processes. Similar to the industrial revolution, the AI era is leading to a significant displacement of capital by labor. Numerous studies corroborate this trend, and every executive should consider its implications for their organization.
How extensive is this shift likely to be? I estimate that by 2025, one-third or more of businesses will integrate labor-saving Generative AI in at least one major function on a large scale. These hybrid organizations will drive down costs, benefiting from their expertise in managing digital workers optimally. Laggards who adopt a wait-and-see approach may find themselves on the wrong side of an experience curve, encountering difficulties competing with these pioneers. With every passing day, the ability to operate a truly hybrid organization will improve, as more volume and transactions provide valuable learning opportunities. (See Bruce Henderson and BCG's classic work on this strategic concept, the 'experience curve', which explains why early adopters can enjoy a competitive advantage when they employ it effectively.)
Reason 2: Lower Cost of Innovation
Chip Hazard, co-founder of Flybridge Ventures, a successful venture capital firm, has stated, "With this latest wave of AI, start-ups that previously sought $5-10 million are now asking for $2-4 million, with AI playing a pivotal role in bridging the funding gap." AI can enhance a company's capacity to take on new challenges. Consider Google's policy of allowing employees to spend one day a week on their own projects, which has spurred the creation of various innovative products, including Google Finance. Generative AI can assist in providing the necessary slack to facilitate invention and experimentation.
Digital workers can also contribute to the innovation process itself. Large corporations like Coca-Cola have utilized AI for collaborative image and brand development, while multiple academic papers (such as this one) confirm that AI boosts innovation by serving as a potent collaborator for ideation, simulation, and explication. For instance, generating optimal customer profiles, analyzing market trends, and creating comprehensive marketing strategies are now much more straightforward with the aid of AI tools. This not only increases a hybrid organization's capacity to innovate but also reduces the cost of experimentation compared to traditional organizations.
Reason 3: Agile Scalability
Having managed large businesses with a significant human workforce, I can attest to the challenges of scaling up and down personnel efficiently and humanely. Digital workers and the hybrid organization offer the potential for massively scalable, high-quality, and less volatile services. For example, getjerry.com, a popular car insurance and refinancing site, was able to automate 99% of customer queries in chat and text channels using AI tools, resulting in improved customer satisfaction and instantaneous response. This not only generated a $4 million annual return for them but also equipped them to handle growth while keeping employee headcount stable. A hybrid organization that employs AI to supplement tasks during periods of high and low demand—such as customer service or contract review—will enjoy better service with lower risk.
Key Questions to Ponder Today
- Which type of digital workers do I need to incorporate into my organization? To address this, I suggest our 'WINS' framework, which helps executives determine where to begin with GenAI.
- Does my organization possess the expertise to recruit and deploy digital workers? If not, how can I develop this skill within my company?
- How 'hybrid' will my organization be by the end of the next year?
If your answer to the last question is 'zero percent', I believe your organization risks falling behind its competitors. By embracing hybridization, businesses will be able to perform tasks more quickly, efficiently, and affordably while also fostering innovation. Additionally, these forward-thinking organizations will build valuable experience in the art of balancing human and digital workers. We are still in the early stages of this Generative AI/AI era, and companies that develop the management expertise to design, deploy, and improve a truly hybrid organization will construct a more agile, innovative enterprise with superior economics.
Based on the context provided, here are two sentences that contain the given words and follow from the text:
- With the implementation of Generative AI in at least one major function, businesses aiming to stay competitive should consider transforming their workforce into a 'Hybrid Network' of human and digital workers, as suggested by NVIDIA Co-Leader and Head of Jensen Huang.
- The integration of Generative AI agents into a company's operations can lead to significant cost savings, as demonstrated in the example where $30 in daily AI 'tokens' can automate a call center employee's job for only 10% of their daily wage.
