Majority of firms now adopting AI; more investments planned
Artificial intelligence has been the top technology trend for 2017, and a new study finds that as many as 80 percent of organizations are now investing in AI to some degree. But that isn’t strong enough interest, the study reveals, and one in three business leaders believe their company will need to invest more into AI over the next 36 months to keep pace with competitors.
At the same time, many organizations are anticipating significant barriers to AI adoption and are creating a new C-suite position, the Chief AI Officer (CAIO), to streamline and coordinate their efforts.
Those are among the findings of a recent global study on AI adoption by technology industry market research firm Vanson Bourne, which was conducted on behalf of Teradata, a leading data and analytics company.
AI Investment strategies
The survey results found that most companies are bullish and expect their AI investments to be worth the upfront cost. The industries where respondents expect to see the most impact from AI are IT, technology and telecoms (cited by 59 percent); business and professional services (cited by 43 percent); and customer services and financial services tied for third (cited by 32 percent).
But there is no gain without some pain. The top three challenges where businesses expect AI to drive revenue are product innovation/research and development (cited by 50 percent); customer service (cited by 46 percent); and supply chain and operations (cited by 42 percent). This mirrored some of the top areas of AI investment, which include customer experience (cited by 62 percent), product innovation (cited by 59 percent) and operational excellence (cited by 55 percent).
While adoption rates are already high and companies expect AI to prove its worth, there is a lot of opportunity for future implementation, respondents noted. Consider:
- 80 percent of respondents report that some form of AI is already in production in their organization, although 42 percent say that there is lots of room for further implementation across the business.
- 30 percent still believe that their organization isn’t investing enough and will need to invest more in AI technologies over the next 36 months to keep up with competitors in their industry.
Challenges with AI realization
Almost all respondents in the study said they anticipate barriers to adoption and ROI. Lack of IT infrastructure and lack of access to talent are cited as the leading barriers.
Perhaps surprisingly, business leaders said they are not unduly concerned about the impact AI and automation will have on employee morale. Only 20 percent see this as a barrier — and even less, 19 percent, are worried about making a business case for AI. Consider the following findings:
- 91 percent expect to see barriers to AI realization, with lack of IT infrastructure (40 percent) and lack of access to talent (cited by 34 percent) leading the challenges, followed by lack of budget for implementation (cited by 30 percent); complications around policies, regulations and rights (cited by 28 percent); and impact on customer expectations (cited by 23 percent). By contrast only 19 percent view a weak business case for AI technologies as a concern and only 20 percent are concerned about the impact of AI and automation on employee morale.
- Businesses anticipate about a half-and-half split between revenue increases (cited by 53 percent) and cost/efficiency savings (cited by 47 percent) from their AI investments.
- Only 28 percent of respondents say that their organization has enough trained people internally to buy, build and deploy AI.
Extracting ROI from AI
While organizations currently rely on existing technology leaders such as like CIOs and CTOs to direct AI adoption and strategy, they believe the future of AI will be so relevant for creating a strategy across business practices that they will need a CAIO (Chief AI Officer) to coordinate and mandate implementation throughout the enterprise.
- The CIO (47 percent) and CTO (cited by 43 percent) are leading the effort today, but 62 percent of respondents say they are planning to hire a dedicated role - a CAIO - to lead the effort in the future.
- Companies expect a 99 percent ROI in the next five years for every dollar invested today and 187% in ROI over the next 10 years.
- The industries that most anticipate positive impacts are: IT, technology and telecoms (cited by 59 percent); business and professional services (cited by 43 percent); consumer services (cited by 32 percent); financial services (cited by 32 percent); and manufacturing and production (cited by 31 percent).