AI strategy not technology crucial for business impact
Most organizations would find it hard to operate without the technology they have today, and more are planning to invest larger sums to keep up in the digital marathon.
This year alone, worldwide spending on digital transformation is predicted by International Data Corporation (IDC) to reach US$1.18 trillion, and the figure doubles to US$2.3 trillion by 2023.
The significant investment represents a drive for companies, from startups to major government departments and national organizations, to integrate technology to streamline organizational workflow.
Although the motivation to adopt digital transformation is prevalent in the majority of organizations, a lack of business impact from artificial intelligence (AI) is driving morale down in organizations.
Not feeling the AI impact
A survey by MIT Sloan Management Review and Boston Consulting Group, which consulted more than 2,500 executives, showed that 70 percent of organizations are experiencing minimal or no business impact from AI. Even among frontrunners, just 60 percent of organizations reported some tangible business impact.
Success rates are not on par the sizeable global investments. While some companies have figured out the winning combination of AI and business, many just aren’t gaining sufficient returns from their efforts.
MIT Professor of Information Systems, Sam Ransbotham, and his team, authors of the survey, explained; “companies that focus solely on the production of AI (data, technology, tools) are less likely to derive value than those companies that actively align business owners, process owners, and AI owners.”
The key is for organizational leaders to balance ownership of the direction in AI implementation, while also benefitting from AI initiatives from the receiving end.
AI strategy the first step to success
Werner Boeing, CIO of Roche Diagnostics, stated in the survey that “AI is not, in itself, a separate agenda. It is a subset of the tooling and the capabilities and methods we’re using” to achieve company goals.
By tying organizational goals with AI tools, organizations can generate AI strategies that steer business models in the right direction, such as gaining revenue and receiving higher returns in digital investment.
In short, deploying AI tools will not benefit the business, unless they are woven in as active components of the larger business strategy.
Finding the right talent
A shortage of AI expertise in an organization can inhibit the execution of AI strategies. Although organizations are vigorously hiring external talent and some choose to upskill internal staff, strong arguments can be found to discredit the advantages of both approaches.
Should organizations invest in fresh tech talent or go in-house?
The answer is unclear and there isn’t an absolute solution to this problem. The MIT survey showed companies that take the initiative to train, nurture and cultivate AI talent see value in their digital investment as compared to organizations that solely rely on outsourced skills or staff.
However, when it comes to hiring externally, consistency is key; 65 percent of organizations that invested consistently in tech talent experienced business impact.
Orchestrating a system of people, process and technology
A close-knit relationship between corporate goals and AI strategy managed by a talented team seems to be the winning combination for organizations leading the AI race.
At the same time, deploying AI strategically can also lead to business functions becoming more interlinked.
“Successful AI applications have the potential to integrate the organization in unprecedented ways,” said Ransbotham. A respondent from the financial services sector, for example, said the effect of gaining deeper insights on the client’s needs through an integrated data model allowed managers and employees to make decisions from a holistic view.
As a result, the organization is working as a coherent unit, and that’s the lesson for businesses deploying AI at large. Organizations will be closer to achieving digital goals and experiencing AI impact on business when integration dispersed across the company and departments and contributes tangibly towards short and long-term business goals.
30 March 2023