From Generic to Strategic: Managerial Challenges and Response Mechanisms for Customizing Gen AI in Companies

Companies are increasingly using customization techniques to tailor standard GenAI technologies with their unique characteristics such as open-endedness and inscrutability to their specific business needs. While customization is essential for companies to derive business value with GenAI, the practical challenges that managers encounter during customization projects remain underexplored. We interviewed cross-industry AI practitioners involved in GenAI projects to investigate the challenges they face when customizing GenAI and the response mechanisms they apply to increase the effectiveness of their customization efforts. Thereby, we provide practitioners with three actionable recommendations to build capabilities for successful GenAI customization: adjust data governance to treat unstructured data as a strategic GenAI asset, implement a risk-tiered GenAI governance, and build a modular GenAI stack to retain flexibility.