The future is now: Driving USD 4.5 billion in extreme productivity with AI

This post was updated on 26 August 2025.

Whichever path is taken, productivity enabled by AI and automation will likely be at the heart of transformational growth. It is one of the most exciting opportunities of our lifetime.

Nobel prize-winning economist Paul Krugman once said, "Productivity isn't everything, but in the long run, it's almost everything.” That’s because productivity is about more than just cost savings or efficiency—it’s about creating self-funding mechanisms that enable investment in innovation that drives growth and prosperity.

This is why AI is so transformational: it presents ways to boost productivity that did not exist before. The potential of productivity gains is staggering. At IBM we know this isn’t just theory: AI and Automation have helped IBM unlock extreme productivity gains across the company since January 2023, and we are on track to reach $4.5B in savings by the end of 2025.

Any enterprise transformation journey begins not with questions about technology, but with questions about business strategy and a growth mindset.

In that context: If you had the opportunity to rethink and reshape every aspect of how your business operates, what would you do?

At IBM, CEO Arvind Krishna saw this opportunity and, in early 2023, set us upon a challenge to rethink and reshape IBM to make it the most productive company in the world.

We defined a transformation strategy and vision: “IBM as Client Zero.” We applied our hybrid cloud, AI and automation capabilities internally, together with strategic partner technologies and our consulting expertise, to unleash a new era of growth and become the most productive company in the world.

In the two years since, in addition to USD 4.5 billion in productivity gains, this helped to drive USD 12.7 billion in free cash flow in 2024, enabling investments in growth through talent, innovation and acquisitions.

We knew what we wanted to do. But for such a large undertaking, it was essential to have the right frameworks to operationalize our productivity initiatives. By establishing a solid foundation, we’ve been able to move with speed and resilience.

We have three guiding principles, built around the mindset of challenging the status quo at every turn.

First, eliminate operational complexity. As Peter Drucker famously said, “Nothing is less productive than to make more efficient what should not be done at all.” We evaluate not only if something is working as it should, but whether it needs to be done in the first place. 

Next, simplify and accelerate end-to-end workflows, which begins with putting the right foundation in place. In our case, a hybrid cloud infrastructure, built on IBM Z^© and Red Hat^©, and Enterprise Performance Management, a data platform that provides a single source of trusted data from across the enterprise, breaking down historical data siloes. This enables fast and accurate completion of critical business processes such as quotation-to-cash, source-to-pay or the end-to-end talent lifecycle.

Then, automate manual tasks and embed AI everywhere. With our leading IBM watsonx^© AI and automation tools, we help to augment the skills of our people by eliminating repetitive tasks. This enables our talented workforce to focus on more challenging, rewarding and impactful work with the time they save—which was an estimated 3.9 million hours in 2024.

• Speed comes from sprints. We work in two-week project sprints with continual reevaluation and recalibration until an MVP is started. That approach took our IT support capability from concept to launch in under 100 days.

• Measurement started with external benchmarking to understand what “best in class” looks like. Today, we’ve set our own standards with guardrails at every step.

• But what keeps us on track as an organization is top-down sponsorship and bottom-up empowerment. A steering committee, led by our CEO, champions the need for cultural change and adoption. And our workforce is empowered to leverage AI to change how they work. One example: the IBM watsonx Challenge.  Last year 178,000 IBMers participated by creating teams to get collaborative, hands-on experience building AI solutions aimed at their specific roles. We put the best of them into our library of AI skills so any IBMer could use them.

The results of this approach have enhanced experiences for clients, partners and employees, and created significant productivity gains for IBM. Some of these dramatic outcomes include:

• HR transformation: Rather than waiting on hold for hours on the phone or days for email replies, AskHR answers 94% of common employee inquiries in minutes or less, without human intervention, any time of the day or night. Managers are able to complete, on average, tasks such as employee promotions with an estimated 75% greater speed.

• Customer support: By integrating AI into both the client and support professional experience, 70% of inquiries have been resolved with a digital assistant, and time to resolution for more complex issues has improved by 26%. Customer satisfaction has increased by 25 points, and IBM has contributed to achieving USD 165 million in operational savings since 2022.

• IT modernization: Using the financial transparency enabled by Apptio, we were able to pinpoint the total cost of our IT operations, make smart tradeoffs and increase productivity, and support the organization's efforts to drive approximately USD 600 million in enterprise IT cost savings since 2022.

Soon we may see the next enterprise-grade transformation capability with agentic AI. There is still a reliance on process handoffs and “human glue” to hold cross-functional workflows together. With agents, AI can guide to completion the automation of complicated, multi-step workflows with unprecedented reasoning and autonomy.

The lessons we have learned are not unique to IBM.  While technology is the great enabler, it is new behaviors and leadership that makes a transformation sustainable.

Whatever you are trying to achieve within your organization, we have the partnerships, the technology and the unmatched consulting expertise to advise you on the right strategy and integrate it all together.

Our own experience has taken us far beyond pilots and theory to real productivity. But we believe this is just the start of what AI will help us achieve. We’re ready to join you and help you bring extreme productivity to life in your enterprise.