How Businesses Succeed with Artificial Intelligence
Artificial Intelligence (AI) has found its way into a number of businesses worldwide. Yet, one question still remains: how does a company successfully utilize AI to its full potential?
The Harvard Business Review recently released an article by Jacques Bughin, Brian McCarthy, and Michael Chui who discussed key insights from a McKinsey Global Institute study they helped conduct on how exactly businesses can succeed with AI.
Not every business is using AI yet. But a lot are about to.
A huge amount of investment has gone into AI. Yet, corporate adoption of AI has yet to how significant numbers. According to the McKinsey study, “somewhere in the range of $26 billion to $39 billion in 2016, with external investment tripling since 2013.” The survey found that only 20% of respondents used one or more AI technologies in their businesses.
Among all industries, telecom and financial services are expected to substantially increase their AI tech use by more than 15% a year in the next three years. That’s seven percentage points higher than the industry average.
Companies using AI are already seeing the benefits
The survey found that 30% of early AI-adopting companies saw revenue increases. These companies responded that they have been “leveraging AI in efforts to gain market share or expand their products and services.” A further analysis in the survey found evidence that AI is “directly improving profits” in terms of ROI on AI investments.
Many companies partner with others for AI capability and capacity
With the fast and innovative nature of AI, “technical expertise and capabilities are in short supply.” Many companies, such as Amazon and Google, partner with outside companies to keep up to pace with AI. Google’s acquisition of DeepMind was a strategic move to help Google improve core businesses like search optimization. The survey found that many early AI adopting companies bought “fit-for-purpose technology solutions” to develop and implement AI to its full potential.
Both business and technical leaders in a company should co-lead AI
One big mistake many companies can make when taking on AI is compartmentalizing AI. According to Harvard Business Review, compartmentalizing AI can result in “technologies being launched without compelling use cases.” In order to ensure that AI is being utilized for the most valuable use cases, both business and technical leaders should co-lead AI initiatives.
Take a portfolio approach to AI
Since AI is still a relatively new field, the utility of AI tools varies across time. The Harvard Business Review suggests a portfolio-based distribution across three time horizons: short-term, medium-term, and long-term
Short-term should focus on utilizing AI where there are “proven technology solutions today and scale them across the organization to drive meaningful bottom-line value.”
Medium-term should focus on experimentation with emerging technology. Relatively new concepts, such as deep learning video recognition, should be experimented with before scaling them across the organization.
Long-term should focus on working with academia or third-party organizations in researching high impact use cases of AI. By working with academia or a third party, companies can gain an advantage in utilizing cutting-edge AI technologies.
The biggest challenges are people and processes
AI technology continues to grow as more and more businesses are tasked with the challenge of shifting from process efficiency to decision management effectiveness. “As leaders determine the tasks machines should handle, versus those that humans perform, both new and traditional, it will be critical to implement programs that allow for constant reskilling of the workforce,” state the study’s authors.
AI still has a long way to go. But there is already significant evidence that many companies are seeing the potential in AI technologies. Continuously learning and investing in AI’s growth can give companies a fruitful future.