AI seen as essential and transformative for business
The use of artificial intelligence (AI) technologies in business is growing in acceptance and investment, according to a new survey from Tata Consultancy Services.
A global trend survey report entitled “Getting Smarter by the Day: How AI is Elevating the Performance of Global Companies,” has found the vast majority (84%) of companies view the use of AI as “essential” to competitiveness, with half describing it as “transformative.”
The study was conducted among 835 executives, across 13 industry sectors globally, and found the most popular current use of AI is in IT departments where more than two thirds of companies (67%) employ the technologies to detect security intrusions, user issues and deliver automation.
The report says that almost a third (32%) of companies believe AI’s greatest impact, by 2020, will be in sales, marketing or customer service, while one in five (20%) see AI’s impact being greatest in non-customer facing corporate functions, including finance, strategic planning, corporate development, and HR.
While there was a broad representation of companies amongst respondents, including automotive, banking and financial services, energy, healthcare, life sciences, industrial manufacturing, and retail sectors, the survey found that certain impacts areas would be of benefit across all sectors, such as in guiding customer service representatives to more quickly resolve customer problems, anticipate future purchases and quickly and securely reconciling mass overnight transactions for financial institutions. HR was also a key area, where AI could potentially free up those professionals by managing more time consuming actions, such as on-boarding processes for new hires.
“As companies begin to gain a better understanding of AI’s application for business, they will realise the significant impact of this transformative force. This is reflected in our Global Trend Study, which shows that forward-thinking companies are beginning to make major AI investments,” said K Ananth Krishnan, chief technology officer, TCS. “Given the increasing digital disruption across every industry and the public sector, AI should become a key and integrated component of an organization’s strategy.”
As AI becomes a mainstream technology, financial investments in AI are set to rise, says the report, with 7% of companies each earmarking at least $250 million (€233 million) toward AI in 2016 and 2% already planning to invest more than $1 billion (€932 million) by 2020.
The report asserts there is a clear correlation between investments in AI and business impact. The companies that realised the greatest AI-related revenue improvements and cost reductions spent five times more on the technology than the companies with the lowest AI-related revenue and cost improvements, according to the report. In turn, leaders generated average revenue increases of 16% from AI initiatives in 2015 versus 2014, whereas those lagging in adoption saw a mere 5% revenue growth. At a regional level, North American companies were the leading investors in AI in 2015, with an average per-company spend of $80 million (€74.5 million), followed by Europe with $73 million (€68 million), Asia-Pacific with $55 million (€51.3 million) and Latin America with $51 million (€47.6 million).
In the future, respondents indicated that the factors most important to AI gaining widespread acceptance and driving business benefits, in addition to information security, were developing cognitive systems that continually learn, having the ability to make reliable and safe decisions based on masses of data, and gaining the confidence of managers to trust what AI is advising them to do.