They’ll be able to test those products quickly, then easily adapt them based on insights gained and iterate at pace.
Companies will be able to rapidly adjust their products, create multiple variants, make huge pivots – or anything in between – in response to changes in market conditions and new opportunities, all the while creating outputs of higher quality.
And all this will be possible at significantly reduced cost – thus negating the need for large amounts of high-risk, early-stage funding. Instead, investors will be able to place their bets on an MVP, or adaptation of an existing product, that is already proven to be successful and scalable.
In all of the above, the potential value will be created by the smart integration of the right AI tools to accelerate and refine processes at every step.
However, this isn’t the distant future. In many cases, it’s already happening.
Yet for many firms – particularly those backed by private equity (PE) investors – the reality isn’t always matching up to the vision.
So why does this gap exist?
Overcoming the blockers to AI-driven value
Because a typical PE investor will be looking for a substantial return over a period of three to five years, many initial investments will have been made prior to the explosion of generative AI tools that are now massively disrupting almost every industry. Usage of these tools may not have been part of the original investment thesis – but they absolutely need to be now.
However, too many organisations are failing to keep ahead of the game and unlock the enormous potential value that AI tools can deliver.
In our experience, the main blockers are as follows:
1. Time constraints
We are seeing many companies suffering from a simple lack of bandwidth to explore how best to leverage the capabilities of AI.
This is often compounded by intense pressure to deliver results against the original investment thesis. Pressure builds on top of pressure as new opportunities for growth are discovered or acquisitions are made which then need to be carefully integrated. This can leave little room for reflection or experimentation with new tools.
Add to this the rapid pace at which AI tools are constantly evolving and improving, and it can seem almost impossible to keep up – let alone move ahead of the game – when it comes to understanding the best ways to deliver practical, value-driving applications of the technology and successfully roll them out across the organisation.
2. Hype versus reality
As has always been the case whenever a new, heavily hyped technology floods the market, most AI tools are currently not mature enough to deliver fully on the promises made by their vendors. There is no doubt whatsoever that AI is a game-changer. But being able to work out the difference between the sales pitch and the practical reality can be challenging and requires deep expertise.
3. Security, legal and compliance challenges
Legitimate concerns exist around issues such as security, regulatory compliance and IP-protection – many of which are yet to be clarified and resolved. While most AI tools offer, for example, zero data retention and assurances around IP, understanding and mitigating these requires time, experience and focus – for example, in ensuring the tools are correctly configured to be fully compliant.
Overall, it’s vital to address these issues. And soon.
If your company takes too long to release new products or new features, you may quickly find yourself in trouble as your time to value becomes severely eroded. Your new competitors – who could be almost anyone armed with the right AI tools and the ability to use them effectively – can already enter the market and pull the rug from under your feet, able to adapt to market demands and seize opportunities far faster than companies with legacy platforms and products.
Learning from best practice
So how can you start turning AI into tangible value?
We believe that working with a skilled and knowledgeable partner is a powerful first step. Ideally, you would choose one that is constantly tracking the latest advances in AI technology and how they can be applied– safely and legally – to deliver greater value in the shortest possible timeframes.
They would also be able to consult on best practice, drawing on their own experiences in the field alongside those of similar clients they have supported.
The aim would be for them to help you deliver high-quality outcomes using the most effective AI-enabled processes and techniques.
To address legal and security issues, it’s essential to have an AI policy in place that creates the appropriate guardrails for safe and compliant usage of AI. Above all, we strongly recommend that absolutely everything always remains subject to human accountability – so have your people reviewing and refining every AI output at every stage of your processes. Here at Damilah, we do – and always will.
Last, but not least, there needs to be a shift towards outcome-focused roles. In other words, enabling AI tools to handle more of the laborious, time-consuming, detailed technical work – thus allowing a skilled human workforce to maintain oversight while concentrating on value creation and strategy.
New pricing models and investment strategies
And here’s one further thought. It’s likely that agentic AI tools will soon become prevalent in many organisations, which may have a profound effect on commercial pricing models.
Instead of the traditional pay-as-you-go or seat-based SaaS pricing structures, we may soon find outcome-based pricing models becoming the norm – that is, where fees are based on successful delivery and results.
This, in turn, would require PE houses to review – and radically adapt – their investment strategies, resulting in major impacts on the organisations they back.
It’s too early to predict precisely how this AI-powered future will unfold. But one thing is certain: all organisations – and particularly those funded by PE – need to remain fully alert to the fundamental shifts that are occurring and be nimble enough to rapidly adjust. Those that don’t risk becoming dead in the water.
We can help you transform your AI vision into genuine value . To explore the possibilities, get in touch now.
Iain Bishop, founder and CEO, Damilah
We therefore ran a controlled experiment, pitting a team of AI-assisted software engineers and quality analysts against a ‘human-powered’ group who were only allowed to use their own brains.
Here’s what we did and what we discovered…
How we ran the experiment
In all, a total of 52 of our people took part in our experiment, over a series of two hackathons.
We split them into two groups:
- One assisted by AI tools, with 30 engineers and 8 automation quality analysts (QAs)
- A control group that was purely human-powered, with 12 engineers and 2 automation QAs – allowing us to baseline the potential gains of using AI
We gave each group three hours to perform the same task.
For the engineers, the task was:
- Develop a .NET Web API to dynamically process mathematical expressions
- Implement a custom PEMDAS-based algorithm for expression evaluation, without using any third-party libraries
- Write unit tests to validate the functionality of the solution
- Test the implementation using five provided edge cases
And for the automation QAs:
- Write three automated functional test scripts for specified scenarios
- Test these functions using the provided test web shop application
The tools used by the AI-assisted team were:
The results
We expected the results of this experiment to be positive in favour of the AI team, but we were still amazed by the difference the AI tools made in terms of enhancing speed and quality.
Here are the overall outcomes we recorded…
On average, when compared to our human-powered team, our AI-assisted engineers were able to:
• Complete the coding nearly 2x (44%) faster
• Conduct the unit tests just over 2x (51%) faster
• Cover nearly twice as many (83%) more edge cases
And when we compared our fastest human-powered engineer with our fastest AI-assisted engineer, the results were even more impressive: the AI-assisted engineer was nearly 5x (78%) faster.
We also compared a human-powered engineer with one who already had experience using AI tools (in this case, GitHub Copilot). We found that:
• For the coding, the AI-powered engineer was 4x (75%) faster
• For the unit tests, the AI-powered engineer was 6x (83%) faster
This demonstrated to us that, as our team of engineers become more experienced with AI tools, our productivity gains will increase even further.
For the QAs, we also saw a significant improvement in the times it took the AI-assisted analysts: the average overall time was just over 2x (54%) faster with AI.
And, as with the engineers, we compared the two fastest times, and found that the first AI-assisted QA to complete the task was 9x (89%) faster.
A comparison of AI tools
We also aimed to make some comparisons between the four different AI tools that we used in the experiment, in particular with regard to user experience, productivity gains, and security and IP protection.
For user experience: GitHub Copilot came out on top. Our developers rated it as a robust and mature tool, suited for .NET application development. It offered consistent suggestions and responses as well as strong context management. Cursor and Codium came in joint second place.
For productivity gains: Cursor came out on top, allowing our team to be 3.2x (69%) faster than human-only developers when it came to completing the full task. GitHub Copilot was in second place, making the team 2.7x (62%) faster.
For security and IP protection , we found the following:
• GitHub Copilot transmits code snippets from the integrated development environment (IDE) to GitHub in real time to generate relevant suggestions. Once the suggestion is created, both the prompt and the suggested code snippet are immediately discarded—but note that this is only the case for the Business and Enterprise licence options.
• Cursor provides a Privacy Mode that can be activated during the onboarding process, ensuring that no code is stored on their servers or by their sub-processors.
• Qodo: Paid licence user data is not used to train its AI models. The data is deleted from their storage after 48 hours. Also,
they provide an option for a zero-retention policy, where data is removed immediately if users specifically request.
All three tools are certified for SOC2 compliance.
(Note that we didn’t assess Tabnine as we felt the model wasn’t mature enough and its users struggled to complete the task.)
Conclusion and our next steps
Our experiment made it clear that AI could offer us some huge benefits in productivity and quality. In every aspect of the tests we conducted, from coding to unit tests to automated test script production, there was a clear time saving – in most cases very significant. It will also enable us to improve the quality of our outputs, as AI-generated code was able to give us broad edge case test coverage.
Furthermore, we expect our efficiency gains to improve further as it is clear that development speed increases with experience when it comes to using AI tools. We found that just a short amount of training significantly accelerates outputs.
As for the future… Our product owner colleagues also ran an experiment to understand how AI can accelerate and improve the product discovery process. We are now looking at how we can use their AI-generated requirements as prompts to build applications – ultimately with the possibility of using AI-assisted processes from an initial description of requirements right through to final outputs.
Meanwhile, right now, we’re already starting to reap the benefits of AI-assisted development with some of our clients, delivering even greater value for them.
If you’d like to find out more about how AI-assisted software development can benefit your business, get in touch now.
Aleksandar Karavasilev, CTO at Damilah
But my husband, who at the time had more experience than me in using AI, suggested I was asking the wrong question. He recommended that I reframe it as: “Are there any scientific articles that prove placing a chopped onion in a room will help with a cough?”
This time, the response was far more credible and useful (and, it turns out, onions do really help).
I learned an important lesson here: although the potential for AI is enormous, when most people engage with it for the first time, it’s usually in a superficial way, often leading to poor results. In order to gain maximum value from the tools, and improve outputs, it’s worth learning the best ways to provide context and specificity, while also asking for an answer based on relevant sources.
Putting AI to the test
At Damilah, we’re very excited about the transformative potential of AI. We have, therefore, been exploring how it can augment our business activities and help deliver greater value to our clients. For example, our engineering teams ran a series of hackathons to calculate whether using AI tools could accelerate software development and improve quality (in a nutshell: yes, it can – hugely).
At the same time, we wanted to test whether AI could do the equivalent for our product discovery and inception processes – and if so, in what ways. So we ran an additional hackathon to examine this. In it, we asked three teams to work on a fictional brief, using a variety of AI tools, including ChatGPT and Perplexity (using Claude).
As with our engineering colleagues, the results were astounding.
We discovered that AI could significantly reduce the amount of time we spent on discovery – by anywhere from 20% to 50%, depending on the task and the tools being used – and with results that matched the quality of the work done without the assistance of AI.
And, most importantly of all, it revealed areas where AI could free us from routine, repetitive work, allowing our people to focus on higher-value activities.[
Accelerating and improving workflows
Specifically, we identified two primary ways that AI can accelerate and improve workflows:
- Jump-starting a project: For example, when preparing for a client interview, we can use AI to generate an initial list of questions based on the context we provide. These AI-generated prompts serve as a springboard, helping us refine ideas faster, and ensure we’ve covered everything.
- Enhancing existing work: In other cases, we can input a draft of some work we’ve already created, prompting the tool to polish and improve it, as well as asking whether we may have missed something. This approach allows us to benefit from AI’s ability to enhance clarity and suggest useful amendments and additions.
Another of our most impactful findings from the hackathon was the way in which we could use AI to accelerate the creation of wireframes with Figma. This aided our conversations with developers while showing similar levels of quality outcomes compared to when we use the traditional discovery processes.
And a real game-changer has been using AI tools for writing acceptance criteria. Traditionally, creating detailed, actionable user stories (which list the requirements that a developer has to meet) is time-consuming and mentally draining. Now, however, by giving a well-crafted prompt to an AI tool, we can generate acceptance criteria in a matter of minutes. This not only saves time but also ensures consistency, freeing our teams to focus on other priorities (more on that later).
AI as an enabler
Despite these extremely encouraging results, we aren’t getting carried away with AI. While it accelerates and enhances many of our processes – and we’re already using it to speed up workflows in live environments with clients who have agreed to us using AI tools – we also believe there should always be a human involved every step of the way.
For us, quality is paramount, so our product owners will always review and refine the AI outputs to ensure they meet our standards and our clients’ needs.
We’re also conscious that an over-reliance on AI may lead to diminished problem-solving skills – a phenomenon akin to forgetting basic arithmetic because we’re accustomed to using calculators. To counter this, we view AI as an enabler, not the be-all and end-all, so will always ensure our people develop and maintain those key analytical capabilities. Above all, AI’s purpose is to enhance human creativity and decision-making, not replace them.
Furthermore, we’re wary of the common problem of ‘garbage in, garbage out’. That is, as I found out with my first experience of AI, it’s essential to take the time to learn how to craft well thought-through prompts and to train the model. AI tools can only become that valuable enabler and accelerator if we ensure we have the skills and patience to do this.
Focusing on value-creation
By learning to use AI in the most effective ways to perform routine and time-consuming tasks, we’re enabling many of our people to spend more time focusing on high-value activities, such as deepening their market understanding, engaging more effectively with stakeholders and shaping product roadmaps.
And, perhaps most excitingly of all, it means we can experiment with bold ideas that we perhaps wouldn’t have risked testing previously as we’d be concerned about the time it would consume. Instead, it enables us to ‘fail fast’ in our search for innovative solutions that genuinely solve our clients’ problems and help them to meet their objectives.
In fact, if I was a potential client looking for a software development partner, I’d always choose a firm that has already successfully established AI tools into its processes. That’s because their teams will be unburdened by all the mundane, repetitive work, and able to truly focus on building a highly creative partnership that delivers outstanding results.
To discuss how our AI-accelerated workflows enable us to deliver greater value for your business, get in touch now.
Iskra Ristovska, Principal Product Owner at Damilah
And who could blame them? As technologists, we’re all excited about what AI can do for us, and we’re all asking the same question: how can we leverage AI tools to improve productivity and help our teams – and our clients – achieve their objectives?
Fortunately, those developers didn’t stay annoyed for long, as we let them use AI in a second hackathon.
Here’s what we did…
A series of controlled experiments
We wanted to establish some clarity, for ourselves and our clients, regarding the impacts AI can have on software development. We fully appreciate that some companies are just beginning to explore AI-assisted development, while others are already integrating it into their workflows. But wherever you are on this journey, the potential of these tools to deliver real, measurable value is undeniable – and we were keen to understand that in greater detail.
So, we designed a series of controlled experiments. First, we split our engineers into two groups: one using traditional methods (the disgruntled ones); the other using AI tools like GitHub Copilot (the far happier ones). We then gave each team a series of identical tasks to complete, which included developing code and testing it.
Then, in the second hackathon, we expanded the experiment to include a wider range of AI tools, such as Cursor, Codeium and Tabnine, and gave the developers short training sessions on using them effectively.
And the results were striking. While the engineering teams using traditional methods delivered great work in a reasonably good time, the ones using AI completed the tasks far more rapidly – sometimes nearly five times faster – and with a higher degree of quality, finding edge cases more effectively and producing better unit tests.
For quality analysts, the impact was even more pronounced: AI-assisted testing was up to nine times faster and improved the ability to identify edge cases, leading to significantly higher-quality outcomes.
Overall, across all our experiments, we found that the average time taken to complete an entire task was around twice as fast.
What’s more, a team of colleagues conducted a hackathon to test the value of using AI to accelerate and enhance our product discovery and inception processes – with equally astounding results. (find out more here)
Delivering added value for our clients
We are now starting to roll out the usage of AI into live environments with our clients, while leveraging the learning from our experiments.
One of the key benefits we’re finding is that – as well as the significant acceleration in pace – AI removes much of the boring, repetitive or time-consuming work, such as writing unit tests, troubleshooting code and referring to community forums for solutions. This allows our developers to focus on more interesting – and more valuable – activities.
For instance, in a recent live case with one of our clients, two developers struggled for hours to resolve a specific issue. When they finally turned to an AI tool, they fixed it in just 10 minutes, enabling them to move quickly onto a higher-level task.
Another value-driver is that we’re able to share the results of our experiments with our clients. We understand that many of them do not have the time or resources to run hackathons of this kind, due to the day-to-day pressures of their business. But, thanks to our partner-shoring.
approach – where we build fully integrated teams with our clients, all working towards the same goals – the insights we have developed are available for our mutual benefit. This includes not only productivity metrics, but also operational best practices, the ways AI can be integrated into workflows, and identifying the most effective AI tools for specific tasks.
Addressing the risks and challenges of AI
Despite the outstanding success of our experiments, we are also fully aware that there are several risks and challenges that need to be addressed with the adoption of AI.
We believe that security and the protection of intellectual property (IP) should always be a primary concern, and that is no different when it comes to the use of AI. To mitigate this, we’ve implemented strict policies and only use tools with advanced security safeguards. For example, the tools will immediately discard any code snippets or prompts that we use once they have generated a suggestion.
Another important challenge is ensuring that our engineers maintain ownership of their code and there is always a human in the loop at every stage of development. In its present state, AI cannot replace human judgement and expertise. While it nearly always generates great suggestions, it’s still up to our people to validate them, adapt them to our specific needs, and check for errors.
Where next?
As for the future… we’re truly excited. The pace of AI development is astonishing. In just a couple of years, we’ve seen transformational advances – and the next five years promise exponential improvements. As AI tools mature, the opportunities for end-to-end software development based on a series of high-level business requirements are becoming increasingly feasible.
In the meantime, we’re committed to staying ahead of the curve. By continuously exploring new tools and refining our workflows in a constant search for improved quality and efficiency, we’re not just enhancing our own capabilities – and keeping a smile on the face of all our developers – we’re driving valuable innovation that delivers measurable benefits for our clients.
To discuss how our AI-enhanced development – and the experiments we’ve been conducting – can benefit your business, get in touch now.
Aleksandar Karavasilev, CTO at Damilah