On Your Marks: Business Leaders Prepare For Arms Race In Artificial Intelligence

 

Artificial intelligence (AI) is already transforming business, and this trend is only set to continue. In fact, according to a recent Forbes Insights survey of 300-plus executives—63% of whom were in the C-suite—95% believe that AI will play an important role in their responsibilities in the near future.

The deep data that AI allows companies to tap into is providing insights to help solve challenges in everything from better neuroscience diagnoses to producing kegs of beer. The power of AI is understood by business leaders regardless of company size: The Forbes Insights survey drew detailed responses from companies with annual revenue over $10 billion to as low at $250 million, with remarkable consensus across business size and sectors. All told, 99% of executives in technical positions say their organizations are going to boost their AI spending in the coming year, a level of funding increases likely unmatched anywhere else in the corporate world.

Implementation of AI is just getting started in business, but make no mistake: Change comes quickly. Just look at the explosion of digital personal assistants. There are now some 5 billion digital assistants, like Amazon’s Alexa, Apple’s Siri and Microsoft’s Cortana, being used worldwide, according to data from IHS Markit. By 2021, there will be 8 billion in use—equal to the world’s population—just a decade after this form of AI was brought to market. Corporate leaders anticipate a similar explosion of AI throughout the business process, with 86% agreeing that companies will face “a significant disadvantage” in the next five to 10 years if they play wait-and-see on artificial intelligence.

Senior executives cite AI as the most vital technology for their company’s future—49% selected it from a list of 10 technologies including blockchain and the cloud. Yet most are just in the early stages of integrating AI into their business plans, with just 3% feeling AI’s been “fully deployed” in their business. Some 73% of executives say their businesses are piloting, experimenting or planning their AI efforts. Those indications of early-stage maneuvers show there is a large window of opportunity for companies that may be only starting to consider how to leverage the massive AI computing power available to them.

Challenges: Strategy, Data And Employee Buy-In

Seeing the importance of AI is one thing; weaving it into a business effectively is another. Having a strategic vision for AI was cited as the single most important contributor to successful AI in a firm, by 29% of executives. Beyond strategic vision for AI, corporate leaders see hurdles ahead with their company’s information technology bandwidth. Does the company have the ability to gather enough data to feed into an AI system? Twenty-nine percent say that’s a “major challenge” or has actually stopped deployment. Does the company have enough in-house expertise to roll out AI? A similar number of executives, 34%, cite it as a major challenge or stopping deployment.

Another challenge around AI implementation is getting employee buy-in beyond IT. When asked if AI is going to require a partnership between the IT function and end-users to be successful, 88% agreed or strongly agreed, more than for budget, data availability or even the business case for AI, according to the C-suite executives surveyed by Forbes Insights.

Senior executives cite AI as the most vital technology for their company’s future, yet most are just in the early stages of integrating AI into their business plans.

Executives also are least confident in the ability of non-IT, non-executive stakeholders to unlock maximum value from AI in the near future. This appears to stem partly from concerns that AI will displace workers, rather than being seen for what it is: a set of very powerful tools that will improve decision making, operational processes and aspects customer service, enabling employees to focus on duties of higher value.

“We’re having artificial intelligence that’s able to do all sorts of functions in terms of recognizing different kinds of cancer images, or now getting superhuman even in speech recognition in some applications, but they’re also quite narrow. They don’t have general intelligence the way people do,” said Erik Brynjolfson, a professor and head of the Initiative on the Digital Economy at the Massachusetts Institute of Technology. “And that’s why partnerships of humans and machines are often going to be the most successful in business.”

Benefits Too Great To Ignore

Companies need to overcome the challenges associated with building AI into their businesses because, quite simply, the benefits are too great to ignore. The most-cited business benefits corporate leaders see from AI include:

• Increasing productivity (40%)
• Reducing operating costs (28%)
• Improving speed to market (21%)
• Transforming the business and operating model (20%)
• Improving bottom-line growth (19%)
• Improving customer engagement (18%)

Manufacturing is the industry likely to be most impacted by AI, according to 36% of those polled. But the influence will be felt across many industries, including retail, cited by 13% of respondents. Professional services, healthcare and financial services are each cited by 10% of CEOs and other leaders. Clearly, this is a technology that will disrupt large swaths of the business world. With corporate leaders foreseeing a rapidly changing environment thanks to AI, the time is now to begin strategizing how businesses successfully weave AI into their fabric.

Any business that can find a way to collect enough data on its customers’ needs and desires, as well as feedback on their use of/satisfaction with the company’s products or services, should be able to use AI to refine its business model—or to build a totally new one. For an example of a company that’s been creative with this, learn about Stitch Fix. And for some guidance on developing a database from scratch, read about proprietary, closed-loop data sets.
Learn more about how companies are leveraging AI today.
CREDITS: FangXiaNuo/iStock

About the Author

Forbes Insights is the strategic research and thought leadership practice of Forbes Media. By leveraging proprietary databases of senior-level executives in the Forbes community, Forbes Insights conducts research on a wide range of topics to position brands as thought leaders and drive stakeholder engagement.