“The number of ‘AI native companies’ will continue to increase. It is a moment when incumbent companies need to be on high alert.”

Joohee McClelland, President of IBM Consulting Asia Pacific (APAC), gave this assessment of the rapidly changing corporate environment following the emergence of OpenAI’s AI chatbot ChatGPT, during an interview at the IBM Korea office in Yeongdeungpo-gu, Seoul, on the 25th of last month. An AI native company is one that, like the “digital native” generation born into and familiar with digital environments, is built on AI technology from the moment of its founding. She said, “AI native companies are an entirely new concept of enterprise that can be launched in a very short time and generate revenue quickly,” adding, “Incumbent companies need to find competitiveness through a ‘hybrid’ approach.”

IBM Consulting supports companies in using advanced technologies such as AI to enhance productivity. Approximately 90% of its current clients are large corporations, but the share of smaller AI-born companies is steadily rising. A representative client is Riyadh Air in Saudi Arabia. McClelland cited Riyadh Air, which she called “a case we are very proud of,” as it launched its first flights in October last year, just two years after beginning preparations for its founding. The airline has introduced AI into every process, from workforce management such as cabin crew deployment, to aircraft allocation and customer service. In this process, IBM Consulting took on roles such as building AI-based workflows.

McClelland said, “Service quality can be significantly improved from a customer-service perspective. For example, AI can analyze traffic conditions around the airport to predict the likelihood that customers will be late and proactively arrange a fast-track service,” adding, “IBM Consulting identifies such possibilities and provides the technological solutions.”

The emergence of these AI-born companies has also accelerated the pace of traditional legacy companies. According to IBM Consulting, 64% of global AI-related budgets are currently focused on corporate AI transformation (AX). McClelland said, “Because large corporations operate at scale, optimizing their workflows with AI allows them to save far greater costs,” adding, “In the past, launching a new business required significant expenditure and complex decision-making, but with AI, this has become much easier.” In other words, the potential for business expansion can be greatly increased.

IBM itself is one of the companies that has demonstrated McClelland’s point most clearly. “IBM, now in its 114th year, has more than 400 business processes,” she said. “We selected 70 of these and were the first to completely revamp them by introducing AI-based workflows.” As a result, over the past two years, the company has saved USD 3.5 billion (about KRW 5.13 trillion), and cost savings are expected to reach USD 4.5 billion (about KRW 6.6 trillion) this year.

She described the Korean market as “a market with great potential, equipped with both innovation and scale.” However, she also noted, “Introducing AI is, in a sense, democratic because it optimizes decision-making processes, and the hierarchical corporate cultures prevalent in many Asian countries can hinder this,” emphasizing, “Alongside technology adoption, a transformation in organizational culture is absolutely necessary.”

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