Ep 34: Are You Ready for AI in 2024? Our Predictions

Welcome!  Upside/Downside is a podcast about value creation, and how finance business partners, managers and business owners like you can grow your profits and cash flow.  I'm your host, Matt Cooley. 

In this episode, Tommy Huynh returns and we share our predictions how AI will impact businesses and people in 2024.  Referencing new stats and reports from respected third parties, we make our cases and challenge each other's assumptions.

What minimum skills will be required?  Will investment levels continue unabated?  Who's most at risk of losing their job?  Does anyone really know what they're talking about?   And what do we do if all hell breaks loose?

Let's plow through the details together on this episode of Upside/Downside.

Thank you for listening and please visit Upside/Downside podcast and enter your email for my FREE list: "10 places to look for higher profits and cash flow right now!".

Matt

Transcript

SPEAKER_01: 0:02

Welcome back, everyone. This is Matt Cooley, host of Upside Downside, where we explore value creation and how the actions we take affect profits and cash flow. By day, I'm the unit CFO for Ericsson's global network platform, API Business, and a nerd for value creation and how it impacts companies and everyday people. Back for a second run is my pal, Tommy Hoyne. Tommy has spent 16 plus years as a marketeer for several tech companies and is obsessed with artificial intelligence. He builds, he studies, he interviews companies about use cases, and fortunately for us, he also shares. Welcome back, Tommy. Hey, man. Thanks for having me back. Thanks for being here. We did the episode last fall about democratization of AI, and it was a cool episode, I think, and pretty popular in terms of downloads. We're back this time to share our predictions about AI in 2024. And if listeners knew us well, they wouldn't be surprised to learn that Tommy and I don't necessarily agree on everything when it comes to this topic. And that's totally fine. That's what makes an interesting discussion. So Tommy, with that, what are your predictions, my friend, for AI in 2024? And then let's see if you're right.

SPEAKER_00: 1:18

Well, I get a preface like that. It's like the whole marketing versus everybody else.

SPEAKER_01: 1:23

Well, I'm finance, right? This is an age-old rivalry. So

SPEAKER_00: 1:27

it's how it is. Yeah. So I am thinking by mid-24 Candidates or individuals who are looking for new roles with some type of AI experience will be favored over other candidates who do not have that experience. So this could include, you know, having hands-on, you build something with, you know, JTP's open API or something with Google Bard or whatever, you know, tool that you use to build your product or your app. You know, having that hands-on experience is important to be able to talk through through it, to be able to tell that story, to be able to tell your story more importantly, and how you use AI to impact other people's lives. Or do certifications like I did with the various programs that are free, some from Google. There's some paid ones from MIT, Harvard, so on and so forth. That gives you a high level overview of what AI is, what it can do, including generative AI, machine learning, or if you want to get into the weeds of deep learning and neural networks as well. then if you are fortunate enough to be able to get a full formal degree, that will certainly help as well. So that's what I'm thinking by mid-24. And then by the end of 24, I'm thinking that AI experience is almost a requirement if you want to be considered for one of the office roles or knowledge worker roles that really is the frontline of technology and to be able to impact the company's bottom line or go to market roles, marketing roles, sales, even.

SPEAKER_01: 3:10

So you think as we slide into 2024, having some kind of experience that you demonstrate is going to be important to stand out from the crowd. But by the end of 2024, by the end of this year, it's going to be a hard requirement.

SPEAKER_00: 3:28

Yeah, absolutely. Because we're going to into 24 with recession in the back of our minds and companies, just to be frank, are always looking for employees to do more with less. And AI is that tool now that's available that will be our partner to be able to do that and to be able to help us produce more, whether it's an asset, whether it's to do financial projections or whatever role you're in, I think that's going to be a requirement over someone else who doesn't have those skills.

SPEAKER_01: 4:01

So that That's interesting to me. So I want to comment on that because from one level, most people have been using AI at some level already for a few years. If you think of navigation apps, facial recognition at the airport, streaming services where they monitor your preferences and suggest movies that you would like to see when you're writing an email, you can hit the tab key and it'll finish the string for you. you most of the time saying something that you want to say, et cetera, et cetera. So if it's mid-2024 and I'm applying for a job, can I use those kinds of things since we're already doing it? Because I hear what you're saying, and I do believe that we'll slide into that kind of pattern, but I don't know if it's going to be as quickly as you were suggesting. A lot of the tools aren't out there yet. We're not going to sign on to ChatGPT, the public version, or BARD and do our work. So are these tools even available for people to demonstrate beyond the simple stuff that I already, I just listed?

SPEAKER_00: 5:11

Yeah, I think what, yeah, no, I absolutely agree that, you know, Siri, for example, like you said, right, Siri and Spotify and all that has been around for five plus years. Actually, no, iPhone's been around for what, 14 years, 15 years? About 14, yeah. Yeah, what I'm referring to is like productivity tools. So I'll take an example. Like you said, you were referring to emails, you hit a tab and autocomplete for sentence. That was not available until, what, the last year and a half or so? A few years, yeah. Yeah, and then look at how quickly JAT-TBT picked up adoption. They released in November 22, and then by mid of 23, they had over a higher million users per month already. That's the adoption that is convincing me that by 24, that AI experience, it's going to be a requirement. And what I'm specifically referring to as an individual contributor or an employee using tools that will impact my daily job, my daily role to produce some type of output for the organization. But that's what I'm referring to. I'm not referring to sitting at my laptop, listening to Spotify and getting the right beats. So I think that's a little... Sure.

SPEAKER_01: 6:24

But then that means, and I don't necessarily disagree, probably just on the timeline, but then that means those tools need to be enabled in your organization. at some level, right? So that you can take advantage of them. So do you see that happening in a timely basis?

SPEAKER_00: 6:40

Yeah. So I was just doing some research on that. So Forrester predicts that 6.9 million US knowledge workers will be using Microsoft Copilot in 2024. So out of their entire pool, they have about 345 million users today. 6.9, it's a drop in a bucket, but it's still a significant adoption. That's just the initial prediction. We didn't think that, again, I'm going to go back to the chat CBT adoption. We didn't think they're going to get to 100 million users in less than a half a year, and they did. I'm thinking now that Microsoft is going to roll out with that. To your point earlier, Google's workspace and the automated emails is already in our G Suite today. We're already using it. We're already auto-completing our emails. We're also doing sheets and it's helping create formulas already. So it's already, I think the 6.9 is an underestimate. There's being conservative about it. And when Microsoft rolls it out to all their 345 million users, that pretty much covers a lot of the workers out there.

SPEAKER_01: 7:56

Right. Okay. So I could get my head around that again, maybe not in the same timeframe that you're thinking, but Starting with those table stakes productivity tools. Yeah, I could see that transpiring. Okay,

SPEAKER_00: 8:08

did you... That timeline is probably reflective of the four cups of coffee I have versus yours. Wait, I think,

SPEAKER_01: 8:14

yeah, we're similar in terms of our coffee conception. Did you have a prediction about 2025? Yeah.

SPEAKER_00: 8:22

Do you remember back in the 2000s when we went into, well, I don't know, into like some type of interview with HR and they asked you, do you you have any experience or hands-on experience with Microsoft Office, Word, Excel? Oh yeah, I

SPEAKER_01: 8:36

remember those. It was quite a while ago, but yes, people used to ask that.

SPEAKER_00: 8:40

Nobody asks that today. It's a requirement. Like you don't know how to use that. You can't be in that role or you would not do well. You can't

SPEAKER_01: 8:48

exist.

UNKNOWN: 8:49

Exactly.

SPEAKER_00: 8:50

So going to 25, I think having AI experience is a must, just like using Word, just like using Google Workspace, email, Outlook, whatever. or to be able to send email on your phone. I think it's a natural progression of technology adoption. And it's a new tool, just like salespeople have to use Salesforce to track their customer conversations, intelligence, and so on and so forth. Marketers have to use Marketo and Salesforce to do our automation and campaign tracking and so on and so forth. I think everyone will need to have the ability to use these new tools in 25.

SPEAKER_01: 9:31

So lots of people, particularly in your space, have been using those tools for some time. I mean, even as a finance person, I've helped three different companies implement Salesforce. Einstein, though, it's been around a few years, but sort of the new kid on the block for Salesforce. Do you mean... you have to be, by 2025, you better be well-versed in Einstein, for example, as a marketeer or a salesperson.

SPEAKER_00: 9:59

No, I'm referring to just some basic tools like the M365 Copilot that will have the AI already built in to that suite. So you're creating your content, you're writing your document, you're writing your meeting notes, you're creating your spreadsheet or your models and so on. I'm talking about that level of So

SPEAKER_01: 10:20

even when we get to 2025, you're still thinking productivity, not necessarily apps like Salesforce or Marketo.

SPEAKER_00: 10:29

I think so, because those apps are very specialized to those individuals. I would not use Salesforce CRM, but I do use Salesforce for the marketing campaign

SPEAKER_02: 10:42

of it

SPEAKER_00: 10:43

and also for... I used Marketo in the past to track my campaign. So that's a very specialized role. But as a generalization, I think having a productivity suite and AI within that is where we're going to go.

SPEAKER_01: 10:59

Okay. So from a broader perspective, okay, I can get my head around that. I think that makes sense. Yeah, I challenge you a bit on the timing, but everything else, I think generally we're heading in that direction. So time for my two predictions. I have two. And as we've discussed offline many times, I think we're clearly in a hype curve. And I've been concerned that it looks and smells as a finance person, right? We don't believe anybody. We're pretty conservative. but it looks and smells like many other technologies in the past and things need to settle down a bit before we really understand what's going on. So my first prediction is that investments in AI will cool down during 2024 while the market figures out what's real and what's not real. And I can point to a lot of different sources for this, but let me just mention a couple. So last month I attended a CFO forum in New York City, and it was interesting. It was a good mix of large cap and mid cap CFOs. And the AI topic came up multiple times. And all of these companies have implemented some level of machine learning, RPA, or what is being labeled as AI now. But pretty much all of them are being quite selective on their investments. And they do, you know, this podcast is about value creation. So these tools have to be able to demonstrate at least on a two to four year horizon is what I was hearing at this forum, that they're going to add to value creation, which usually means cost reduction, you know, higher efficiency. But in some use cases could also mean higher profits. So everybody understands that all of these these panelists, CFOs seemed to get that and they were living it, but they were sort of sitting back and wanting the dust to settle a bit was the sense that I got. Some big investment analysts like DA Davidson, Goldman analysts, et cetera, have cautioned their customers in 2024, look for quality, not quantity. 2023 was very much a quantity year for AI investments. And both public have said they expect the level of investment to come down. A couple other articles. Oh, McKinsey. I want to mention McKinsey has an interesting guide out there. It's available. Just Google it. What CFOs should spend their time on in terms of AI investments in the next year or two. All the use cases that they give are things that quality companies are already doing today. And I just, I thought that was interesting because, you know, let me give you a couple examples here. Things like scenario and response planning, predictive cashflow forecasting. I mean, all quality companies do cashflow forecasting today. You can make it better with AI, but those are things that we're already doing. Dynamic capital allocation. I thought that one was interesting. All these use cases that they're saying CFOs should spend time on are already being done, just not necessarily with the latest and greatest AI. So that's my prediction number one. I don't know if you have any reaction to that.

SPEAKER_00: 14:40

I would agree with that. But just like any enterprise or mid-enterprise IT procurement, you know, the executive teams are always going to track what the ROI will be to justify that additional spend. So I agree with you that you're going to have the finance team as well as the IT and everyone else is going to look at what's the ROI coming out of this spend before they actually procure it. But I still think that it's going to move a lot faster. There's going to be new tools that are coming out and it's going to be a little difficult to catch up and to be able to stay on top of every single thing that comes out. Because I'm going to come to you and ask you for three different tools because I think it's going to make my job a lot faster and not burn me out. And then to your point, you're going to ask me, what's ROI really going to be? And then I saw some of the metrics coming out from Stanford and MIT saying that Gen AI can improve workers' performance by as much as 40%. compared to workers who did not use it. And that was from MIT. And then from like Stanford, they're saying chatbots were 14% more productive when paired with a regular worker and to be able to be their co-pilot or their partner to produce outcome. But that's still very early stages. I think the poll is only like 5,200 service workers for that chatbot. So it's not a ton of... metrics that I would stand behind just yet, but at least I expect that the finance organization is going to pay very close attention over the next 18 months before the investments are made.

SPEAKER_01: 16:34

It's an early look-see, right? So my second prediction is that any major job displacement in the next one to three years will be actions that could have been taken already using existing tools, machine-learn And the reason I say this is I really, I hinted at it earlier, we're in a hype curve. And the AI that's available to the public, and I know that's not necessarily what will drive value for companies, but what's really available today doesn't do much for companies. The reason I say this is Forbes has been writing a lot on AI, and it's interesting in their articles about it. And I'm not bagging on Forbes here, but they mix things. Like they sort of label, I noticed in several articles, they label machine learning and RPA technologies that have been around for a while and available for companies to implement, sort of they imply that they're new AI tools and they're not. And so it takes companies a while to implement these things. And so I think in 2024, if anybody's losing their jobs, even in 2025, Particularly at larger organizations. I'm curious what you have to say, but the writer of the article is concerned that AI can summarize emails that you don't want to read, and then it can draft responses to those emails. So it can do all this stuff for you. And at some point, this author extends it to a logical conclusion that no human will be reading or writing any of these emails in the future. And then that can be extended to AI. I can write books that nobody's buying. They can write reviews of those books that nobody really reads, et cetera, et cetera. And like, where does it stop? We just have this pile of stuff and content that nobody needs. And it's probably a bit tongue in cheek, but I don't see in the next one to three years how this will replace jobs based on what it is today, given that machine learning and robotic process automation has already been available for years. Curious what you think about that.

SPEAKER_00: 19:25

If we can take a step back, it's about re-skilling the individual for what's coming ahead. That's what it comes down to. So whether you're working in that robotics factory, you're from a manual one in the past, you're going to have to get re-skilled to be able to use the tools over time. And that's the same if you're in the factory, logistics, supply chain, health care, and then obviously in tech. And so I think slowly but surely, everyone will start to reskill on the new tools, just like we didn't have Salesforce before. Everything was in Excel, right? There's that one meme where the Excel pretty much holds up the entire world for the last 25 years or so, if not longer. And so I think that's what's happening is eventually we're going to get reskilled on all these new AI tools. But you're right. A lot of the tools that are coming out today or over the last 15 months was all creating memes and images and stuff and garbage that we don't always, we actually don't need, but there's still a lot of good things that came out of it with, you know, if you use it correctly, just like anything in the world, I think if you use the tool correctly, you're going to get the right output, garbage in, garbage out, right? You put in a bad prompt, you're going to get garbage out.

SPEAKER_01: 20:40

I agree with that. I just think the word, you know, correctly, what does that mean? We don't know yet, right? It's too early. But would you agree that any major, do you foresee any major job displacement in the next year plus because of AI?

SPEAKER_00: 20:57

No, I don't think there will be layoffs because everyone's going to flip a switch one day and 50% of your staff is going to be gone because a bar is going to write your customer service responses. No, that's not going to happen. But I think reskilling will happen over the next one to three years pretty aggressively on these new tools to help improve productivity and do more with less. And that would be across the entire organization from customer service to product management, development, marketing, how can we go to market faster and beat our competition and win that market share? And that's going to require reskilling of your existing force.

SPEAKER_01: 21:37

So I will say again, as a finance person, do more with less. That's music to my ears. All right.

SPEAKER_00: 21:44

This is the one time we'll agree on something.

SPEAKER_01: 21:47

Yeah, yeah. Well, we agree on most things, just probably not around AI, but right on. Tommy, thanks for coming back to Upside Downside to share your predictions. We'll follow up later this year and see where we are, okay? Yeah, absolutely. Thanks for having me, Matt. To our listeners, thanks for your support. And as some of you know, I occasionally accept short consulting engagements and donate the revenues to charities. See the link in the episode notes for more information. And finally, remember everyone, if all hell breaks loose, keep calm and let finance handle it. Right, Tommy? Absolutely. Don't cut my budget. All right. Thank you. See you soon.