• AI holds the power to transform businesses, but two things are prohibiting companies from realizing this success.
• Budgets dedicated to AI are either too low or are not being utilized appropriately.
• It’s difficult to secure the talent or guidance needed to create an AI strategy and execute it.
Which technology holds so much potential that the Wall Street Journal has compared it to the invention of the steam engine, electricity, and the internet?
In fact, AI is so transformative that it’s a driving force in the fourth industrial revolution currently underway. For businesses, that power can unlock coveted digital transformation that can elevate their entire organization. If business leaders and technology executives understand that AI holds the key to the success they desire, what stops them from achieving those results? What’s holding back companies from raising their AI game?
As businesses work with larger data sets and become increasingly connected and reliant on technology, they must transform. It’s simply a requirement for longevity, and it’s no longer possible to ignore AI when seeking to embrace digital transformation. Artificial intelligence strategies are being created, but they are still very narrow, not reaching their full potential. Despite this, these efforts are still fruitful.
Of those businesses that have attempted to use AI-supported activities to power their digital transformation, 98% generated revenue increases of over 15%. Artificial intelligence challenges traditional thinking, invites new innovation, and redefines competitive advantage. It improves scalability and security while helping to make faster and more informed decisions. In short, AI can unlock the level of success businesses seek.
According to a McKinsey survey of over 2,000 participants across 10 industries, 47% of companies had at least one AI capability in their processes, up from 20% two years ago. Adoption of AI is increasing fast, but only investing in one AI capability is just dipping an organization’s toes in the water. Full adoption of AI (and the results businesses truly crave) requires more. Businesses seeking transformation need a clear AI strategy alongside deliberate execution, but two things often hold that back.
If implementing AI is a key initiative in achieving transformation, then it stands to reason a large percentage of resources will go into AI. However, this is not the practice when it comes to budgets. McKinsey’s report shows that 58% of those using AI dedicate less than 10% of their IT budgets to AI. Tech pros skilled in Artificial intelligence are some of the most in-demand in the entire industry, and hiring even one full-time expert could bust that budget. At the same time, a business cannot transform with only a 10% effort.
Luckily, businesses are beginning to realize this as 71% of organizations expect their AI investments to increase significantly. However, they will need to do so carefully. According to Rix Ryskamp, CEO of a machine learning tools vendor, “Companies need to be aware that artificial intelligence and machine learning can quickly become a black hole for money, and CIOs need to help them understand that before embarking on implementation.” Proper AI execution takes more than throwing money around. It requires a strategic approach by individuals who understand the technology. Otherwise, it’s equivalent to renovating a house that ends up costing twice the price by the time it’s complete.
Naturally, there are many initiatives fighting for any IT budget, and they often go hand in hand. For example, it’s hard to go “all in” on AI but completely ignore a data strategy. After all, AI is powered by reliable, structured, and organized data. It’s similar with the cloud. Major companies like Capital One are finding great success applying AI through the cloud, but that obviously requires a strong investment in the cloud. If companies are planning to spend more on AI, they can’t do so at the expense of their other important tech initiatives. That begs the question: how can anyone get the most impact out of their AI budget?
What else holds back a company’s AI strategy? What is the key to AI success?
AI talent is the answer to both of these questions. The McKinsey study found that the biggest barrier for organizations seeking to adopt Artificial Intelligence practices was a lack of appropriate skills, followed closely by lack of a clear AI strategy. Naturally, it’s hard to have one of these without the other. When only 27% of companies say they have access to the talent necessary to support AI work, what can the other 73% do to get the expertise they need?
Some are investing in learning, hoping to train their current teams to lead the AI charge. Unfortunately, that takes a great deal of time as capitalizing on AI initiatives requires skills to be developed practically overnight. Furthermore, who will train those employees? Learning about AI from an academic standpoint is far different from using it practically.
That’s why many companies find AI success by seeking outside guidance. While some will turn to a staffing firm to secure an AI leader, more still are turning to consulting. Bringing in “hired guns” can usher in a new era. AI consultants can create an AI strategy and implement it, all while training existing employees to maintain and add to what they’ve built. Rather than encouraging dependency on outside help, this type of consulting eventually makes organizations self-sufficient with all things AI.
The old adage about working smarter, not harder, defines any viable artificial intelligence strategy. With AI set to increase global GDP by 14% within 10 years, there’s no question that this technology is changing the world. Businesses everywhere are doing whatever it takes to make AI work for them. Are you prepared to do the same?