The paradox of faster work but slower sales and profit growth following the adoption of generative AI is reportedly being caused by the concentration of IT talent and organisational challenges at Japanese companies. Citing figures from the IPA’s DX White Paper 2023, the article points to the allocation of IT talent and the lack of redesign at the operational level.
Although Japanese companies are rolling out generative AI across their organisations and substantially reducing working hours, their sales and profit growth has not been significant. One reported cause is that IT talent is concentrated on the IT-company side, leaving non-IT operating companies without sufficient IT talent.
The weakness of organisations in deploying AI at the operational level is reportedly attributable to long development cycles caused by dependence on external vendors and organisational structures in which operations and technology are only loosely connected. It has been pointed out that, at Japanese companies, the practice of outsourcing requirements definition and development cannot keep pace with market changes before productivity improves, while the direct connection between operational challenges and technology implementation remains inadequate.
The benefits of AI adoption are reportedly falling into the “trap of partial optimisation”: although individual productivity improves, resources are not being redeployed toward customer value. The reason that reducing the time required to prepare proposals does not improve sales or profit across the organisation is said to be that customers are not paying for that value.
The reported solution is to reinvest the surplus time created by AI in activities directly linked to creating customer value, such as exploring changes in the market and expanding customer touchpoints. The importance of redesigning operations, including reviewing staff allocation and organisational design, is emphasised.