Advice to Executives for Capitalizing on Generative AI From Robert F. Smith

Vista Equity Partners’ Founder, Chairman and CEO, Robert F. Smith, spoke at Vista’s 2024 CXO Summit, where he discussed how generative AI (GenAI) is transforming the enterprise software landscape and shared strategies for capitalizing on this technology. Below is a behind-the-scenes look at his remarks.

GenAI represents one of the most transformative technological advancements since the internet. McKinsey estimates that GenAI has the potential to contribute up to $4.4 trillion in value annually across various business use cases – a figure that roughly doubles when considering potential integrations into existing software applications.¹

Software is set to capture the lion’s share of the opportunity from GenAI as part of the coming third wave of value generation, following hardware and semiconductors in wave one and hyperscalers and infrastructure in wave two. Because of this, it is incumbent upon software executives to master this technology in their businesses. Those who have sovereignty and dominion over their data sets and customer/contract bases can increase their total addressable market by building a GenAI layer into their products.

Additionally, there are considerable efficiencies to be gained from leveraging GenAI for code generation and also using it to augment and automate various business processes. For example, ~15% of the Vista portfolio has already implemented GenAI-powered customer support tooling with measurable impact.²

The potential value from GenAI is truly unprecedented, but it requires thoughtful and thorough implementation. For software executives looking to get their hands around this technological revolution, I offer the following advice:

Preparing for the Future of Business Starts Now

Ultimately, the companies that will be the most valuable going forward will be GenAI-enabled software companies. Software executives must ensure that GenAI is a core part of their DNA and stay committed to their strengths while remaining curious about new technologies. They must also evolve their management teams to include those who embrace evolution. By maintaining a clear vision, nurturing fresh perspectives and developing long-term goals backed by actionable plans, software executives can position themselves for success in a GenAI-driven future.

Capture and Measure the Value of GenAI Initiatives

The implementation of GenAI across organizations brings substantial changes in capacity and will create new opportunities that were previously unimaginable. To capture this, companies should start by identifying easy implementation opportunities like code generation, marketing content development, customer support chat bots or internal copilots for customer-facing teams. It is imperative to demonstrate how GenAI capabilities impact P&L, revenue, product development and cost structures to determine the ROI of these efforts. Have a clear business plan and show a direct connection between GenAI investments and profitability or growth.

Vista portfolio companies are already realizing and quantifying the benefits offered by this transformative technology: ³

• Through the integration of a GenAI-driven customer support bot, Mindbody realized $1.25 million in annual savings through customer contact volume deflection and the consolidation of their customer experience technology stack.
• Quickbase is leveraging GenAI in their marketing and has achieved a 30% increase in marketing content creation.
• Avalara utilizes Drift’s GenAI-backed tool to drive sales efficiency, enabling sales representatives to respond 65% faster, with a median response time of just 51 seconds.
• Pipedrive has implemented an AI-assisted code generation tool, in addition to other activities intended to improve developer experience, and has achieved a 9% increase in deployments per developer as well as a 31% decrease in total bugs.

Establish Safeguards and Risk Management Strategies Against Modern Threats

As GenAI continues to evolve, we must enhance the safeguards that protect our digital infrastructure while also ensuring GenAI products are built to mitigate the biases which exist in society. Enterprise software companies can take a proactive approach to managing privacy and security risks by:

• Developing a comprehensive AI safety and security strategy that includes risk assessment, threat modeling and regular audits of AI systems.
• Implementing robust data privacy measures, including the use of synthetic data and informing consumers about data collection practices.
• Establishing ethical AI practices, including the use of diverse training datasets, fairness metrics and human oversight. This includes establishing robust AI Governance Mechanisms and Responsible AI policies.
• Continuously monitoring systems for potential misuse and adapting strategies as new threats emerge.

GenAI is shaping the future of enterprise software today. At Vista, we have seen firsthand how GenAI is driving value across our portfolio – from streamlined operations and enhanced product capabilities to improved customer experiences and accelerated innovation. The companies that will thrive are those that fully embrace this technology by integrating it into their products, leveraging it to enhance operations and building teams capable of driving continuous innovation. The opportunity before us is extraordinary, but success will require adaptability and an unwavering commitment to evolution.

For more insights on business and technology, consider following Robert F. Smith on LinkedIn, YouTube and X.