Reshaping Business With Artificial Intelligence

Closing the Gap Between Ambition and Action

by: Sam Ransbotham, David Kiron, Philipp Gerbert, and Martin Reeves
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Expectations for artificial intelligence (AI) are sky-high, but what are businesses actually doing now? The goal of this report is to present a realistic baseline that allows companies to compare their AI ambitions and efforts. Building on data rather than conjecture, the research is based on a global survey of more than 3,000 executives, managers, and analysts across industries and in-depth interviews with more than 30 technology experts and executives. (See “About the Research.”)

The gap between ambition and execution is large at most companies. Three-quarters of executives believe AI will enable their companies to move into new businesses. Almost 85% believe AI will allow their companies to obtain or sustain a competitive advantage. But only about one in five companies has incorporated AI in some offerings or processes. Only one in 20 companies has extensively incorporated AI in offerings or processes. Less than 39% of all companies have an AI strategy in place. The largest companies — those with at least 100,000 employees — are the most likely to have an AI strategy, but only half have one.

Our research reveals large gaps between today’s leaders — companies that already understand and have adopted AI — and laggards. One sizeable difference is their approach to data. AI algorithms are not natively “intelligent.” They learn inductively by analyzing data. While most leaders are investing in AI talent and have built robust information infrastructures, other companies lack analytics expertise and easy access to their data. Our research surfaced several misunderstandings about the resources needed to train AI. The leaders not only have a much deeper appreciation about what’s required to produce AI than laggards, they are also more likely to have senior leadership support and have developed a business case for AI initiatives.

AI has implications for management and organizational practices. While there are already multiple models for organizing for AI, organizational flexibility is a centerpiece of all of them. For large companies, the culture change required to implement AI will be daunting, according to several executives with whom we spoke.

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References

1. At the time of his interview, Vishal Sikka was serving as CEO and managing director of Infosys. He has since resigned from that position to become executive vice chairman prior to the publication of this report.

2. We built a composite index of organizational understanding of AI based on the responses to nine survey questions related to AI understanding. This index, combined with the level of organizational adoption of AI, determined classification into the four clusters of organizations.

3. S. Ransbotham and D. Kiron, “Analytics as a Source of Business Innovation,” Feb. 28, 2017, www.sloanreview.mit.edu.

4. Y. Wang, “China Is Quickly Embracing Facial Recognition Tech, for Better and Worse,” July 11, 2017, www.forbes.com.

5. J. Ito and D. Kirkpatrick, “Davos — An Insight, an Idea with Joi Ito,” World Economic Forum interview, Jan. 20, 2017, www.youtube.com.

6. R. Ramirez, S. Churchhouse, A. Palermo, and J. Hoffman, “Using Scenario Planning to Reshape Strategy,” MIT Sloan Management Review 58 no. 4 (summer 2017): 31-37.

7. We did not ask respondents to look beyond five years, a horizon that is reasonably foreseeable. For some thoughts on what is possible in a 10- or 20-year time frame, see the Appendix.

8. World Economic Forum, “The Future of Jobs: Employment, Skills, and Workforce Strategy for the Fourth Industrial Revolution” (January 2016), 13.

9. Ibid., 8.

Reprint #:

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Comments (4)
jing su
I completely agree with the section on "Expectations for Change Across Industries and Within Organizations". People definitely have to be aware if they are in an industry that is at high risk of being replaced by AI. I read this article on jobacer.com that listed out similar industries that could be easily replaced. It also gave helpful tips on how to find a long-term stable career with the exponential growth of technology in the 21st century.
Jeniffer de Souza
Muito esclarecedor, serve como importante alerta!

É notável que a maioria das empresas e empresários não estão cientes ou preocupados com a questão de inteligência artificial dominando os negócios daqui alguns anos.

Bom, ao meu ver isso é preocupante, pois tudo indica que isso dominará o mercado e as ações do mundo; é algo planejado a muito tempo por grandes líderes mundiais, então, só resta aguardar a revolução.
Jonathan Obise
The future looks interesting for companies and organizations that are open to new ways of thinking and doing business.

I do also believe AI would massively help improve business process across various industries in the near future.
Josafat Valle
This article was completely enriching and powerful, the game is changing and we need to be prepared for it.