Don’t pin your hopes on generative AI yet

A new global study has sounded a sharp warning to companies racing to adopt generative AI (GenAI): most are nowhere near prepared.

Despite the hype and rapid uptake of AI tools, the research finds that most organisations lack the strategy, infrastructure, and governance needed to use the technology effectively and responsibly.

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According to The Pathway to GenAI Competitive Advantage, a research report from the Business Performance and Innovation (BPI) Network in partnership with EncompaaS and the Growth Officer Council, 60% of senior leaders admit their organisations lack the data readiness needed to unlock AI’s full potential.

Locally, consulting firm Oliver Wyman says South African businesses are rapidly embracing generative AI, with individual usage among workers now among the highest globally.

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Over 60% of employees regularly use GenAI tools, and 21% apply them daily, surpassing usage rates in the UK and US.

A word of caution

However, while individual engagement is strong, organisational uptake lags, particularly among small and family-run enterprises (SMEs).

More than half of South African SMEs have not yet integrated GenAI into their operations, and only 4% of African family businesses use it actively, despite next-generation leaders viewing it as a key enabler of innovation.

This disconnect between GenAI’s promise and operational reality is emerging as a critical challenge for business transformation.

The BPI study surveyed 171 senior executives across regions and industries and found that while boardrooms are bullish on GenAI’s future, they are dangerously underestimating the foundational importance of clean, secure, and enriched data.

“Everyone wants the prize, but very few have built the track to get there,” notes Jesse Todd, CEO of EncompaaS.

“GenAI cannot deliver meaningful insights or automation without a foundation of well-prepared, high-quality data. Right now, too many enterprises are still working with data that is fragmented, unclassified or even unknown.”

The report suggests that unless organisations address this blind spot, they risk joining the 30% of GenAI projects that, according to Gartner, will be abandoned after the proof-of-concept stage.

The failure is often not in the AI itself, but in the data that feeds it.

Beware of unknown data

The research also highlights the misconceptions surrounding AI integration. Many companies remain transfixed by the user-friendly front end of GenAI – typing a prompt and getting an answer without recognising the vast, complex data iceberg beneath.

Poor data governance, algorithmic bias, missing context, and security lapses are some of the less visible but deeply consequential risks.

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The study found that B2B organisations, often perceived as lagging in digital innovation, may in fact be better positioned to realise GenAI’s long-term value.

Their use cases, such as document personalisation and analytics, tend to rely more heavily on complex, unstructured data, forcing a greater emphasis on quality and governance.

Regionally, North America leads the maturity curve, while Asia and the Pacific lag significantly. Confidence in data readiness is highest among large enterprises, although their GenAI deployments are often limited to structured data scenarios.

For marketing leaders, the message is clear. GenAI holds the potential to reinvent how brands engage, personalise, and analyse. But without a strategic focus on data readiness, those ambitions may falter or worse, backfire.

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