There’s still time to climb the learning curve and compete using AI. But time is of the essence.
More and more enterprises are succeeding with AI, proving that an inflection point for AI use is here. As some corporate leaders push innovative AI and digital strategies, others stay idle. But a word of caution to those that are waiting: AI is already directly improving profits, solving mission-critical problems and freeing up creative human capital for early adopters. These mean the competitive gaps between adopters and everyone else are growing and the time to act is now.
Deloitte’s latest State of AI in the Enterprise report notes that the median ROI on any AI-associated project is 17%, and a significant number of executives leading companies that use AI say they’ve “widened a lead”, or have “leapfrogged ahead” of market competitors. Early enterprise adopters aren’t slowing AI expansion, either. These pioneers are steadily pouring more investment into cognitive technologies as internal benefits grow. Companies find that AI leads to enhanced products, processes and better decision making. Leaders also report that the application of AI drives optimization of operations, helps capture and apply scarce knowledge and ultimately creates space for growth.
Of course, sifting through the AI landscape isn’t easy, but it’s becoming a competitive necessity.
The challenge for many leaders though is that they don’t know where to start. Leaders read about self-driving cars, computers beating chess masters and see Bob Dylan stumping for IBM’s Watson on prime-time TV. Connecting commercial AI options with internal opportunities is difficult. But to simplify thinking leaders need to reminded: there are AI solutions that can solve myriad business problems rapidly and affordably – no matter how dynamic a company’s model is.
Don’t worry about sorting AI types and trying to build an understanding of machine learning vs. natural language processing vs. natural language generation vs. deep learning. Leaders need to just take strategic inventory first. By asking “what is the business opportunity or problem that needs addressing?” enterprises can narrow the search for AI that actually fits. Everything – from sales, cost, compliance, automaton and satisfaction can be addressed with AI. And the concern that AI is fundamentally brittle, perpetually sluggish or not flexible and extensible? False.
McKinsey believes that artificial intelligence is poised to “[...] unleash the next wave of digital disruption”, and advises companies to prepare for it now. The competitive gap created by early adopters is widening and highlights the importance for others to test and apply AI. From adding efficiencies in operations and logistics, to improving and expediting customer service experiences and introducing smarter means of transportation, AI’s potential is rich. According to IDC, spending on cognitive and AI systems will reach $77.6 billion in 2022 – more than three times the forecast for 2018. With a compound annual growth rate (CAGR) from 2017-2022 of over 37%, it is clear that organizations see immediate value-add to revenues, profit and overall industry leadership.
Findings published by MITSloan Management Review reveal startlingly clear advantages for those willing to deploy AI early and often. The survey organized companies by reported levels of use: passives, experimenters, investigators and pioneers. These correspond to those with no understanding or use of AI, to those with full understanding and demonstrated commitment to AI systems. Consider report findings for the pioneers:
- The top 18% of AI adopters devote over 70% of their efforts to devising new strategies to drive revenue and new sales growth.
- 72% of these companies are prioritizing AI for its revenue generation potential.
This is markedly different from other groups exploring AI for light efficiency or cost-savings potential – and an important reminder for those companies still slow to adopt. While cost reduction is a by-product of AI use, the pioneers’ investment and reinvestment is all about driving new and better business – whether through adding customers, reducing churn or growing existing customer relationships. By committing to AI, leading companies accelerate business growth – they don’t just reduce costs – and widen the competitive gap between themselves and AI-shy peers.
AI in the enterprise is here to stay.
The ambitious companies that are testing and adopting are adding more and more. They capitalize on the competitive advantage they’ve found while the tentative few stay stuck in a senseless debate about whether AI actually works.