AI is a critical tool that can help businesses expand their margins while unlocking growth opportunities, according to Deloitte Principal Jon Woolfolk and Annie Adams, managing director of Deloitte’s mergers, acquisitions, and restructuring services practice.
In this interview with The AI Innovator, they share insights from the 2025 Deloitte MarginPLUS study to explain how organizations are using gen AI not just to automate, but to transform front-end experiences, unlock new revenue streams, and improve operations at scale. It is not just about cost-cutting; it is also about expanding margins.
From customer service and sales to finance and procurement, AI is enabling more strategic, efficient, and creative ways of working. Woolfolk and Adams also discuss the common hurdles companies face – from legacy system constraints to data quality – and highlight what sets successful deployments apart: a clear focus, committed leadership and viewing AI not as a one-off tool but as a core business strategy.
What follows is an edited version of that conversation.
The AI Innovator: Which functional areas are seeing the most immediate ROI from AI deployments at companies?
Jon Woolfolk: Companies are pursuing growth by using gen AI to serve customers more effectively – not just more efficiently – and to deliver a high-quality customer experience.
Customer service, sales and marketing, and operations and manufacturing are the areas generating the most immediate and measurable ROI from AI deployments. Insights revealed from this year’s Deloitte 2025 MarginPLUS study, showed that specifically, 29% of companies anticipate customer service to yield the highest value, followed by sales and marketing at 18%.
Customer service has always been an early adopter of AI, not just gen AI, as it continues to allow companies to serve customers more efficiently and effectively at the lowest cost possible. Marketing has found creative and cost effective ways of using gen AI to drive content generation at a lower cost, while operations continues to use gen AI in the back office to improve and scale operations.
How are companies using AI to improve margins beyond basic automation?
Annie Adams: Automation has been around – it’s not just about implementing AI to automate something – it’s about how you use AI to do the work differently. While the hype cycle has been dominated by back-office automation and content generation, the real value lies in front-end transformation.
Organizations are deploying gen AI to enhance customer experience and innovate new revenue streams. Study findings show that 27% of organizations use gen AI specifically to improve customer experience, directly boosting customer lifetime value and retention, thereby improving margins. Particularly within the technology, media and telecommunications (TMT) sector, gen AI is notably leveraged to drive innovation, opening pathways for entirely new business models and revenue opportunities.
In today’s economy, every company is searching for margin – more of it, faster, and with greater resilience. It’s not just about cutting costs anymore; it’s about expanding margins through smarter operations, more targeted growth, and greater customer impact.
That’s where we’re seeing gen AI come more into play. Our study revealed executives named sales growth as their no. 1 margin improvement priority, with cost reduction second. It’s no longer a binary choice between saving money or making money. The most effective companies are using AI to do both.
What are the most common challenges companies face when trying to embed AI into existing systems and workflows?
Adams: Challenges vary by industry. In consumer goods, for example, there is a modernization aspect. Whereas in auto and airlines, there’s legacy systems that have been around for decades.
Layering an AI platform on top is a challenge for those industries. To realize value with the use of AI means first working through complex integrations and modernizing legacy infrastructure.
More broadly, data quality and availability will likely generally be the biggest constraint to successful AI implementations as companies wrestle with inflexible legacy systems and technology infrastructures that are incapable of feeding notoriously data-hungry AI models. As always, cost is an important issue, especially given the high levels of investment that AI technology and infrastructure are likely to require.
Can you share use cases for how AI is transforming operations and back-office functions?
Woolfolk: AI is significantly reshaping operations and back-office functions such as finance, procurement, and HR. According to Deloitte’s MarginPLUS findings, 34% of AI initiatives target finance and accounting and 35% target operations and manufacturing, streamlining processes such as predictive forecasting, risk management, and intelligent compliance reviews.
For example, gen AI-driven tools facilitate rapid anomaly detection in financial audits and predictive maintenance scheduling in manufacturing – delivering operational agility and cost reductions. For procurement, it is better at enabling more efficient RFP processes. For the workforce, organizations can manage schedules and train frontline labor in doing day-to-day work. In finance, there are forecasting improvements through machine learning.
What surprised you about AI deployment as you hear client stories?
Adams: A surprising insight from client experiences, aligned with this year’s MarginPLUS Study, is the extent to which successful gen AI deployments depend on clearly defined organizational ownership, typically IT and digital as reported by 64% of organizations. Companies often underestimate how swiftly initial skepticism transitions into enthusiasm when employees observe gen AI substantially improving their efficiency and freeing them for strategic tasks.
Additionally, the strategic alignment of AI initiatives – especially within TMT firms prioritizing innovation – underscores the importance of cultural and organizational readiness as critical determinants of successful AI adoption.
Overall, success depends on three things – focus, leadership, and execution. When thinking about focus, it’s not about going broad but shallow. When organizations try to do too many different things, results are compromised. Whereas companies that are narrowing their focus, better results are realized.
Additionally, companies that treat gen AI as a strategic lever – not just an IT project – will be the ones that define the next era of performance. Interestingly, while IT and digital functions still lead in AI strategy ownership, 20% of companies have assigned it to the transformation office, underscoring the expected importance of AI for future transformation efforts.
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