Groundbreaking today, obsolete tomorrow. The public appearance of GPT a year ago really drove that home. It’s a stark reminder of the pace at which innovation moves. So, what do businesses need to stay afloat? What do tech giants like Google, Amazon, and Microsoft do to stay ahead? The key lies in agility: the ability to deconstruct and reassemble a business’s components in a new way that actually adds value.
Agility—composable modularity and adaptability1—is what shields a company from obsolescence. But how simple is it to dismantle and rebuild without interrupting current operations? It’s a challenging task, but the opportunity has opened up. With the massive economic and operational potential of Generative AI (GenAI), atleast 63% of businesses2 are gearing up to integrate GenAI solutions at scale in the coming years. McKinsey stated, in no uncertain terms, that firms trying to take a shortcut without rewiring their business3 are bound to be disappointed. So now might be the perfect time to return to the fundamentals, re-evaluate the core components that run a business, and think AI-first.
Bringing together GenAI and composable tech
Much has been said in the past year about GenAI capabilities and why it is an essential component of the digital operating model. For instance, a retail company can leverage GenAI to dynamically generate product descriptions, recommend personalized products to customers based on their behavior, and even adjust its supply chain strategies in real time.
The “why” behind this strategy is clear: in a world where customer preferences and market dynamics can shift overnight, modular and composable frameworks powered by GenAI4 provide the agility and efficiency businesses need to thrive. They allow companies to experiment with new ideas at a lower risk, scale successful initiatives quickly, and discard what doesn’t work without overhauling their entire system.
Here’s how integrating GenAI can actualize these principles across the five key building blocks of an AI-first strategy: Product, Customer Experience, Data, Engineering/IT, and Talent.
Product-centric innovation: Flow of value over stringent linear development
In traditional business models, product development often follows a linear path: identify a need, develop a product with a set of predetermined features, launch it to the market, and then iterate based on feedback. This approach tends to be slow and assumes that customer needs remain relatively stable between iterations. The result is over-engineered products that don’t hit the mark in terms of customer satisfaction or operational efficiency.
The GenAI operating model deviates from this traditional path by prioritizing the flow of value to the customer. GenAI helps in understanding and responding to customer needs in real-time, supporting rapid prototyping, testing, and refining products. Teams across functions work together from the outset, ensuring that every aspect of the product development process directly addresses a customer need or enhances the customer experience.
And that means insurance companies would no longer need to push the one-size-fits-all products on their customers. With a GenAI-first approach, they can dynamically adjust premiums and coverage options to an individual’s lifestyle, health data, and risk factors, providing a highly personalized product offering in real time. Banks can personalize savings products that adjust in real time based on customer spending. Supply chains can adjust to changes in demand, supplier availability, and logistics challenges in real time.
GenAI-powered composable customer experiences:
While product-centric innovation focuses on the creation and customization of products and services, enhancing customer experience with GenAI is about using these technologies to improve the overall interaction and engagement customers have with a brand. Rigid and outdated CX frameworks can trap businesses in a cycle of inflexibility, leading to generic customer experiences that fail to resonate or adapt to these changes. So, how can we construct a CX ecosystem4 that’s as dynamic as the world around us?
Identify high-value, high-volume customer touchpoints either when the business reaches out to customers or vice versa. Determine the preferred methods and channels and model the ideal frictionless experience from the customer’s point of view. The goal is to create modular, composable experiences and power them with GenAI to determine and reconstruct quickly based on feedback.
Businesses can then personalize every aspect of the customer journey, from website navigation to post-purchase support. Let’s say a banking customer chooses the self-service option to report a suspected fraudulent transaction on their credit card. Noting the frustration and panic in their tone, the GenAI-powered chatbot can prepare the contact center agent and make a seamless transition to a more empathetic human interaction.
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Build a future-ready backbone:
For any AI or GenAI initiative to succeed, a solid data foundation is non-negotiable. We need carefully managed data pipelines, enriched datasets, and a scalable platform capable of supporting the evolving AI landscape. Before diving head first into the allure of model building, we need to align with the “tried and true” data management principles5 – auditing, integrating, and transforming data—a step often overlooked due to the excitement surrounding AI’s potential. Only then can we experience the true benefits of GenAI.
Leverage the MACH (Microservices-based, API-first, Cloud-native, and Headless) architecture for quick integration or decommissioning of software components in response to changing business needs. Inject GenAI throughout the SDLC for smarter development. Tame the complexity of product and engineering with GenAI, enabling teams to focus on high-impact work.
Get your top talent involved in strategic projects and inspire them with work that matters. The magic happens when diverse minds collaborate. Agile, cross-functional teams break down silos, spur innovation, and boost morale, creating an environment where everyone feels valued and empowered to contribute their best.
Perpetual innovation with GenAI-powered reusable building blocks
To truly achieve scale, it’s important for businesses to move away from crafting one-off solutions that struggle to adapt beyond their initial purpose and yesterday’s problems. The future lies in creating solutions that are reusable, composable, and modular—think of them as digital Lego blocks. These can be dismantled and reassembled into new configurations that meet evolving needs with greater relevance and added value. The feedback loop of GenAI identifies which components require reconfiguration to meet current demands or capitalize on emerging opportunities. This might mean tweaking a service offering based on customer usage patterns or adjusting a product feature in response to new market research. The key here is speed. Are you ready to bring the magic of reusability, where every digital component has the potential for endless reinvention?
Disclaimer Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the respective institutions or funding agencies
- https://www.gartner.com/en/documents/5083331
- https://www.mckinsey.com/capabilities/risk-and-resilience/our-insights/implementing-generative-ai-with-speed-and-safety
- https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/a-generative-ai-reset-rewiring-to-turn-potential-into-value-in-2024
- https://www.forbes.com/sites/forbestechcouncil/2023/10/11/bridging-the-gap-between-generative-ai-data-and-composable-martech/?sh=372c4f606a4e
- https://www.mckinsey.com/capabilities/mckinsey-digital/our-insights/the-data-dividend-fueling-generative-ai
