Generative artificial intelligence (GenAI) technology advancements are transforming product development processes, particularly in the business-to-business-to-consumer (B2B2C) sector. Integrating GenAI models, such as ChatGPT, is becoming crucial for product teams aiming to streamline their development cycles, reduce costs, and accelerate time to market.
GenAI trends and evolution
GenAI has seen a substantial rise in adoption, especially following the introduction of advanced models like ChatGPT, Anthropic’s Claude, and Google Gemini. Initially, these technologies were primarily utilized for summarizing information, writing documentation, and assisting in research. As their capabilities expand, practical applications continuously emerge. This evolution signifies a shift from merely acquiring information to leveraging AI for substantial benefits in complex tasks, including product development.
In recent years, the use of GenAI in product development and manufacturing has grown significantly. Although still in its infancy, McKinsey estimates that in product research and design alone, GenAI could unlock $60 billion in productivity and reduce the product development cycle by upwards of 70 percent. According to Gartner, by 2026, more than 80 percent of enterprises will have used GenAI application programming interfaces (APIs) or deployed GenAI-enabled applications in production environments, up from less than 5 percent in 2023.
GenAI in product development
GenAI’s role in product development spans several critical areas. It is adept at generating boilerplate code and complex algorithms, significantly aiding software development. AI assists in product design and modeling for physical products, allowing for rapid prototyping and proof-of-concept creation. GenAI streamlines the research and analysis phases by providing relevant data and insights and refining product ideas early in development.
GenAI’s potential for growth within product development is vast. As domain-specific models evolve, their accuracy and speed in addressing specific industry needs will further enhance their utility. This growth trajectory suggests that GenAI will continue to be pivotal in reducing human developers’ dependence on routine coding tasks, letting them focus on more strategic and complex problem-solving activities.
Reducing costs with GenAI
A significant advantage of GenAI in product development is its ability to reduce costs. AI minimizes the time and resources required by streamlining various development lifecycle phases. For instance, quickly creating prototypes and proof-of-concept models enables a “fail fast” approach, allowing teams to validate ideas promptly and iterate on designs efficiently.
GenAI accelerates the overall development time, from research and analysis to testing and final commercialization. This time reduction translates directly into cost savings across all product development stages. For example, McKinsey cites industrial designers at an automotive equipment manufacturer that used GenAI to create 25 design variations of a car dashboard in just two hours, a task that typically takes at least a week without AI. A separate McKinsey report states that GenAI and other technologies could automate 60-70 percent of employees’ tasks, significantly affecting knowledge work and boosting labor productivity by 0.1 to 0.6 percent annually through 2040, contributing to overall economic growth.
Key benefits of GenAI include:
- Cost efficiency. Costs are significantly reduced across the research, development, and testing phases.
- Prototyping efficiency. Efficient prototyping allows for the swift creation of prototypes and proof-of-concept models.
- Development time reduction. AI accelerates development cycles from initial research to final commercialization.
Benefits for B2B2C products
Developing B2B2C products involves unique challenges, including ideation, product definition, and end consumer market reach. Each step of the product lifecycle is required to determine the impact on the customer and their end-user. GenAI offers several benefits tailored to these needs:
- Ideation. AI assists in brainstorming and refining product ideas by analyzing vast amounts of data and developing creative solutions, streamlining the initial stages of product development.
- Product definition. GenAI helps define the product by providing insights into the customer, end-user needs, and market trends, ensuring the product aligns well with market demands. Customers can use these insights and market demands to define products and create solutions for their end-users.
- Market reach. AI enables faster market segmentation and targeted analysis, allowing more efficient targeting of specific user groups and quicker rollouts of new features and products.
GenAI assists with understanding user needs and conducting targeted market analysis to help design versatile platforms that cater to diverse business requirements. By enabling faster segmentation analysis, GenAI helps product teams target specific user groups more effectively. This targeted approach ensures that new features and products reach the market faster, reducing the overall time to market for customized solutions. Consequently, businesses can respond more swiftly to market demands, enhancing their competitiveness.
Streamlining product lifecycle and platform design
GenAI supports all product lifecycle stages, from initial research to final product launch. It enhances the product development lifecycle by rapidly standardizing core functionalities and enabling faster coordination across platform ecosystems. This capability is particularly beneficial for developing complex platforms that require integration with various stakeholders, such as merchants, processors, and government entities.
By implementing GenAI, companies can significantly reduce development timelines, allowing new features to reach the market in months rather than years. This ability to standardize functionalities quickly and coordinate efficiently across ecosystems is a game-changer for platform development.
GenAI’s impact on product lifecycle can be summarized as follows:
- Standardized functionalities. GenAI allows for rapid standardization of core functionalities.
- Ecosystem coordination. Coordination is enhanced across platform ecosystems.
- Reduced development timelines. Timelines are shortened for platform development and feature rollouts.
Outlook for the future
GenAI is poised to transform the product creation and release process with its unmatched potential to reduce costs and increase efficiency. Businesses can gain a significant competitive edge from their capacity to expedite time to market and simplify intricate B2B2C procedures. Prospects are promising as organizations adopt and use GenAI in their development cycles, leading to more advanced applications that drive innovation and response to market demands.
Businesses that invest in GenAI, optimize its capabilities, and incorporate the technology into their workflows will increase productivity, reduce costs, and ensure long-term organizational success.
About the Author:
Niravkumar Pandya is an enterprising, process-driven, globally experienced, and visionary product leader. He has extensive expertise in strong technical, product management lifecycle, market analysis, business analysis, requirements, strategic roadmap development, and execution within an agile environment. Niravkumar holds a master’s degree in computer application. Connect with Niravkumar on LinkedIn.
