In a recent report by Capgemini, a paradigm shift towards generative AI is on the horizon, with a staggering 72% of businesses planning to integrate this transformative technology into their operations by 2024. Despite the promising outlook, the report highlights that 68% of organizations are still in the early stages of experimenting with software-driven transformations.
The Rise of Software-Driven Revenue:
Capgemini predicts a quadrupling of business software-based revenues by 2030, reaching 29%, a substantial increase from the 7% recorded in 2022. This surge is attributed to the widespread adoption of generative AI as a software 'copilot,' propelling organizations towards a new era where software acts as a driving force in business strategies.
Becoming Software Companies:
The report indicates a fundamental shift in industries redefining themselves as software companies, moving away from traditional hardware-centric models. A quarter of businesses already identify as 'software' companies, and an additional 32% plan to make this transition within the next three to five years. Furthermore, the boardroom is increasingly recognizing software-driven transformation as a strategic capability, with almost 60% of organizations acknowledging its significance.
Generative AI as the Catalyst:
Generative AI tools are proving invaluable for businesses seeking a competitive edge, facilitating the transformation of business models and unlocking new value for customers. The report emphasizes that these tools are expected to increase time saved for software engineering from 15% to a remarkable 43% over the next three years.
Industry-Specific Gains:
Capgemini's findings point to significant financial gains across industries by 2030, with the telecom sector leading with a predicted revenue increase of 39%, followed by automotive and banking/insurance at 32%, and life sciences at 31%. As demand for generative AI grows, organizations are turning to these technologies to assist software engineers, expecting a 37% contribution to code creation in the next three years.
Challenges and Opportunities:
However, despite the promising trajectory, challenges persist. Only 29% of organizations have begun scaling and utilizing software for transformation, with a mere 5% implementing fully scaled initiatives. The report underscores the need for flexibility across platforms, yet less than half of organizations (48%) have a highly scalable architecture.
Talent is also identified as a critical factor for success, with a looming skills gap. As 39% of organizations anticipate their employees working on software solutions in the next three years, there is a deficiency in skills related to cybersecurity and compliance (61%), AI and machine learning (60%), and data and the cloud (57%).
Embracing the Software-Led Future:
William Rozé, CEO of Capgemini Engineering, emphasizes the need for a mindset shift towards viewing software as a key strategic asset. He advocates for a holistic approach, including strategic partnerships and a clear transformational roadmap to ensure robust, sustainable, and scalable architecture. Rozé concludes by highlighting the significant potential of Generative AI in accelerating endeavors and steering organizations toward software excellence.
