Think of an AI system that understands your business and your employees. Not just fluent in natural language, but fluent in your operations, terminology, and regulatory landscape. That’s what AI customization can achieve — and for many enterprises, it’s becoming less of an option and more of a necessity.

A recurring challenge has surfaced as generative AI (GenAI) moves from experimentation to enterprise deployment: general-purpose models may work well in demos, but they often fall short in production environments. That’s especially true in complex, regulated industries like healthcare, finance, manufacturing, and energy, where domain-specific knowledge isn’t a bonus — it’s essential.

Increasingly, the solution is to tailor models to the language, workflows, and standards of each business. Customized AI enables enterprises to separate hype from practical performance and deploy secure, efficient, operationally aligned systems. Recent industry data shows that 75% of organizations investing in generative AI are prioritizing model customization to meet compliance and workflow needs specific to their sectors. High-performing companies are nearly twice as likely to adapt or fine-tune foundation models, unlocking gains in efficiency, accuracy, and risk reduction.

In this article, we’ll explore how this adds value for enterprises, what forms it can take, and the key considerations for leaders as they embark on customization.

The business case for customization

At its core, AI customization helps organizations unlock new capabilities, improve core functions, and increase efficiency, all tuned to their unique goals and workflows. It’s the difference between AI that “sort of” understands the context of your business and one that genuinely excels within it.

The following are 3 ways in which customized AI delivers competitive advantages for enterprises.

Unlocking new capabilities - Customization allows businesses to move beyond general purpose capabilities and develop new, highly personalized offerings for their customers or workforce. In healthcare, for example, this opens the way for advanced AI assistants that interact with patients based on knowledge of a clinic’s schedule and their doctor’s prescribed follow-ups. In banking, it can be used to provide more personalized financial insights and product recommendations to enable financial advisors to better serve their customers’ needs. One report found that using AI-derived insights in this way resulted in a 20% gain in customer satisfaction and a 10% rise in revenues for financial services firms.
Strengthening core functions - Customized AI can sharpen the performance of AI in key business processes. For example, it can play an important role in strengthening compliance standards — a particularly core concern for companies operating in heavily regulated industries. By training models on compliance standards and risks specific to their industry, enterprises can systematically stay within compliance rules and catch issues before they become a problem. For example, a model could be trained to collect compliance-relevant data, organize it into formats for regulatory reporting, and make sure the data meets the right standards. And customization can be used to improve the transparency of model outputs, helping build trust in AI and providing further regulatory protection with clear data provenance.
Boosting efficiency - By tailoring AI to specific workflows, organizations can streamline processes, increase efficiency and free up employees for higher-value work. In the healthcare setting, for example, AI models customized for insurance processes and medical billing terminology can reduce time spent on paperwork, reducing medical burnout and operating costs.

Customization enables enterprises to do more with less. A paradigm shift is under way as it becomes clear that building bigger, more expensive LLMs is delivering diminishing performance returns. While customization requires investment, companies can boost their ROI by opting for smaller, more cost-efficient models and tailoring them to their unique business needs. This can lead to substantially lower long-term running costs.

How customization works

Customization can be as straightforward as training a model on product documentation for better customer support, or as involved as building a specialized model from the ground up. The following are several key forms of customization, in order of depth and resources required:

Prompt engineering is the simplest method. It involves structuring inputs to steer model outputs – for instance, prefacing a query with “You are a support agent” or “You are a legal information assistant.” While helpful for shaping tone or intent, prompt engineering lacks the depth and reliability required for sensitive or high-stakes applications.

Fine-tuning is a form of “post-training” a model with targeted data — like making a general customer support chatbot particularly performant at resolving customer technical issues. It’s an efficient way to improve domain performance but may reduce general capability, making it most useful for narrowly defined tasks.

Deeper post-training goes further by continuing the model's training with larger, carefully curated datasets and advanced training techniques. This is the next step in performance: the general customer support chatbot keeps its broad knowledge but acquires domain-specific expertise enabling it to resolve a variety of customer issues for a particular business, like a bank.

Pre-training starts from scratch and trains mainly on domain-specific data. Every parameter is shaped by the target data, producing a foundation model natively fluent in the organization's language, concepts, and compliance regime. This route demands the most data, compute, and time and is reserved for cases where retrofitting a general model can't reach the required accuracy requirements (e.g., hierarchical language in a business context, proprietary codebases, or sensitive scientific data).

Examples of customization

A growing number of enterprises are already seeing measurable performance gains from customization.

For example, Oracle leveraged customization to deliver specialized generative AI features to Oracle Fusion Applications on over 50 GenAI use cases embedded in HR, supply chain, marketing and other workflows. This delivered significant ROI, including: notably improved accuracy, speed, and more insightful results. It improved the employee experience through features such as associated authoring, suggestions, and summarization.

Fujitsu’s Takane model — built by Cohere using Japanese business language and cultural context — demonstrates how customization can deliver exceptional results in niche environments.

Takane can process high-context communication, delivering superior performance within its domain compared to larger general-purpose models lacking cultural nuance. This domain-specific accuracy translates to fewer hallucinations and more relevant results, particularly in environments that demand precision.

Cohere Command R+ Arabic is a compelling example of how smaller, customized AI models can outperform larger general-purpose ones. Its customization specifically targets Arabic linguistic patterns and context, enabling more accurate and relevant outputs. With just 8 billion parameters, the model outperforms much larger models in that domain. Its targeted training also makes the model computationally lighter and thus more efficient and cost-effective for diverse applications.

Plan your strategy, then your tactics

Before diving into the details of customizing an AI model, leaders need to consider how it fits into their broader AI strategy. Organizations should first ask what core value they provide and how customized AI can enhance or accelerate that. What are the exact goals of customization and how will success be measured? With a clear strategy in place, businesses can tackle the tactics of customization with confidence.

Cost versus performance

Enterprises should work closely with model providers from the start to tame the costs of customization and clearly articulate the value that improved performance will unlock. For example, if a model’s accuracy improved by 15%, how would that translate into fewer compliance errors, faster customer onboarding, or reduced call center volume?

Unlocking agentic AI

Customization is essential for enterprises to harness the productivity gains offered by agentic AI, where models run complex workflows more autonomously. This usually requires deeper customization, but companies can keep the costs manageable by adopting a modular approach — for example by starting with fine-tuning on proprietary data, adding secure API integrations, and layering in compliance guardrails.

Planning for model lifecycle

AI models evolve quickly. As base models are updated, enterprises must assess whether to port their customizations or start over. This isn’t an automatic upgrade. Adapting to a new base model often requires revisiting training data, processes, and evaluation strategies. Companies must plan for continuity and adaptability.

Safety, alignment, and regulation

Customization is only valuable if the resulting AI solution is safe, aligned to existing company values and policies, and compliant.

Accuracy must be monitored carefully. Customized models trained on skewed datasets can amplify existing inequalities, which can have serious consequences in sensitive areas like healthcare. A diagnostic-focused model, for example, should adhere to training best practices and avoid predictions based on demographic shortcuts. Accuracy and performance need to be tested side by side across the entirety of the end-solution – from the training of the model to the application layer.

Private deployment is essential for many industries, such as healthcare, financial services, and the public sector. Companies working under frameworks like HIPAA, GDPR, or SOC 2 often require tight control over data environments. Cohere supports private deployments through on-premises and virtual private cloud options, ensuring customer data stays within secure boundaries.

Institutional alignment is also critical. Models must generate responses that reflect company values, priorities, and policies. This requires not just technical adaptation, but organizational oversight. Alignment training, like other forms of customization, is an ongoing process as systems encounter new inputs and users.

Compliance must be considered and implemented by design. Customized solutions in highly regulated industries must account for all relevant controls like personal data minimization, retention limitation, anti-money laundering controls in the financial sector, billing and coding requirements in the healthcare sector, or accountability and transparency requirements in the public sector.

Evaluation and monitoring frameworks must be built into deployment. Benchmarks, red-teaming, and human-in-the-loop oversight help ensure that models behave as expected under real-world conditions. Without these guardrails, even a well-trained model can drift into unpredictable or unsafe behavior.

Conclusion

Customization is a key strategic focus as enterprises seek measurable results from GenAI. Without a strong strategy in place — including clear business goals from customization, understanding the appropriate type of customization, and how to implement it —- enterprises risk falling behind. The key to getting customization right is to plan ahead and harness the expertise — internal and external — needed to deliver nuanced, domain-aligned performance that will set your business apart in competitive markets.

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Raine Hahn

Sr. Manager, GSI & MSP Partnerships