Concepts like artificial intelligence, machine learning and natural language processing are bleeding into all facets of the business. Since AI is still immature and evolving quickly, it is unreasonable to expect everyone in the C-suite to understand it completely, as a result of which some researchers opine that hiring a chief AI officer and building up AI teams across functions can help companies get the maximum value of their AI investment.
Investing in Chief AI Officer
Companies need to act quickly in this regard. For example, a new research sees that a whopping 80 percent of enterprises are investing today in AI, but one in three business leaders believe their company will need to invest more over the next 36 months to keep pace with competitors. At the same time, enterprises are anticipating significant barriers to adoption and are looking to strategize against those issues by creating a new C-suite position, the Chief AI Officer (CAIO) to streamline and coordinate AI adoption. These results come from survey of 260 large organizations that operate globally including 60 from APAC region, conducted by leading technology industry market research firm Vanson Bourne on behalf of Teradata.
“There is an important trend emerging evident in this report — enterprises today see AI as a strategic priority that will help them outpace the competition in their respective industries,” says Atif Kureishy, Vice President, Emerging Practicesat ThinkBig, a Teradata company. “But to leverage the full potential of this technology and gain maximum ROI, these businesses will need to revamp their core strategies so AI has an embedded role from the data center to the boardroom.”
According to experts, some chief data officers and forward-thinking CIOs are effectively taking on this role. Rajesh Shewani, Head – Technology and Solution Architecture, Teradata India said, “Artificial Intelligence (AI) is going to be the next big differentiator for both society and enterprises. In the Indian context I believe AI can be a huge disruptor as our social and economic problems are bigger and in many ways more complex and challenging.”
“It is heartening to see Indian enterprises echoing the same sentiments as their APAC peers. They are recognizing AI as an enabler that is crucial to transform their business and stay ahead of the competition than just a mere tool. At the same time, they also realize that to fully leverage the advancements in AI, the deep integration of AI in their business strategy is essential, which is something that still remains a work-in-progress today.”
Here are some of the key findings of the survey
Companies are Doubling Down on AI Investments
The survey results found that 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 (59 percent), business and professional services (43 percent), and customer services and financial services were tied for third (32 percent). However it changes at APAC level, while IT, technology and telecoms (63 percent) contributes the highest, the second highest contributors are financial services (38 per cent) and manufacturing and production (38 per cent) that are tied at second followed by business & professional services (35 percent).
The top three challenges where businesses expect AI to drive revenue are product innovation/research and development (50 percent), customer service (46 percent), and supply chain and operations (42 percent). For APAC, the respondents report much higher for product innovation/ research and development (65 percent), followed by customer service (54 percent), and supply chain and operations (40 percent). This was reflected by some of the top areas of AI investment, which include customer experience (62 percent), product innovation (59 percent) and operational excellence (55 percent).
While adoption rates are high and companies expect AI to prove its worth, there is a lot of opportunity for future implementation, as 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. APAC reported the most current investments made in AI, with 86 per cent of respondents stating that they have made some form of AI investments already, although 38 percent say that there is a lot of room for further implementation across the business.
Over a third 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. On average, the companies surveyed are currently investing $6.47 million in AI technology — that number rises to $8.25 million average spend for companies in APAC.
Challenges Lie Ahead for AI Realization
Almost all respondents are anticipating barriers to adoption and ROI — as is the case with nearly every emerging technology. Business are ready to continue to invest in AI, likely because of the gains executives and IT decision-makers anticipate in cost and time savings, but lack of IT infrastructure and lack of access to talent are cited as the leading barriers. Surprisingly, business leaders are not as 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.
As per the study report, nine out of 10 respondents expect to see barriers to AI realization, with lack of IT infrastructure (40 percent) and lack of access to talent (34 percent) leading the challenges, followed by lack of budget for implementation (30 percent), complications around policies, regulations and rights (28 percent) and impact on customer expectations (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. At APAC, the leading challenges are lack of IT infrastructure (40 percent) and lack of access to talent (32 percent).
Businesses anticipate about a half-and-half split between revenue increases (53 percent) and cost/efficiency savings (47 percent) from their AI investments. However at APAC level more weightage is given to cost/ efficiency savings (52 percent) than revenue increases (48 percent). Only 28 percent of respondents say that their organization has enough trained people internally to buy, build and deploy AI
How Businesses can extract ROI from AI
While executives currently rely on existing technology leaders like CIOs and CTOs to steer 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.
According to the study, the CIO (47 percent) and CTO (43 percent) are leading the effort today, with 62 percent of respondents say they are planning to hire a dedicated role — a CAIO — to lead the effort in the future. At APAC level, both CIO (50 percent) and CTO (50 percent) are contributing equally.
Companies expect a $1.99 ROI in the next five years for every dollar invested today and $2.87 in ROI over the next 10 years. The industries that most anticipate positive impacts are: IT, technology and telecoms (59 percent); business and professional services (43 percent); consumer services (32 percent); financial services (32 percent); and manufacturing and production (31 percent).
A proven differentiator for creating opportunities
Tech companies have been promising AI as a robust solution and business strategy for the past few years, and this survey shows businesses are realizing the benefits of AI adoption today.
“As we continue to adopt AI solutions across our business, we’re finding it is a proven differentiator for creating opportunities to streamline our operations and drive revenue,” says Nadeem Gulzar, Head of Global Analytics, Danske Bank.
“Finding the right talent is always a challenge in emerging tech fields and having service-based options, as well as off-the-shelf, will be important to fill the gap as we continue to invest in this technology.”
Enterprises expect AI to be a technology with longevity, planning to double their investment in five years and triple it within 10 years. But to maximize this ROI, companies realize they must re-imagine how AI will disrupt all aspects of their businesses and create a suitably agile strategy to gain ROI.