For their 2019 report, Winning with AI(1), MIT Sloan Management Review and Boston Consultancy Group undertook a survey of more than 2500 executives alongside 17 expert interviews, to reveal the tactics and behaviours of companies that are getting the most out of AI in 2019. One of their findings was that while 9 out of 10 respondents saw AI as an opportunity for their company, the perceived risk of AI is on the rise, with 45% of respondents reporting perceived risk from AI (compared to 37% in 2017).
Among the risks perceived by these respondents were the potential for existing competitors to use AI to increase their threat, and for new, AI-driven competitors to appear and disrupt the industry altogether (with Apple's move into the finance industry being a key example). The danger of being driven by fear of these risks is that AI strategy becomes just that - a separate strategy to the organisation's core strategy.
In contrast, one of the key behaviours of those respondents who were seeing impact from their AI initiatives was to develop AI strategy that was integrated with their overall business strategy. These companies that find success are working backwards from their strategic goals, asking what obstacles need to be overcome and prioritising those that will return value, and utilising AI as the toolset that can address those obstacles. This is a more effective behaviour than creating an AI solution in response to a threat, or viewing 'adopting AI' as a strategy in isolation. Working backwards from business strategy - as opposed to working forwards from AI - also enables a broader view of the opportunities of AI. This paves the way for scaling AI and integrating it at all levels of a company.
The authors highlighted two approaches that were common among companies that had reported impact from AI: integrating AI and digital initiatives, and applying AI to revenue generation.
98% of the respondents who had reported impact from AI said that AI was connected or tightly integrated with their digital strategy. Digital transformation is a priority for many organisations, and AI systems can support the process and provide valuable insight throughout.
Applying AI to reducing costs and improving efficiency is worthwhile in early stages, to gain momentum and foster enthusiasm for AI. However, shifting the focus of AI from cost-cutting to revenue generation can lead to longer-term return from AI, as evidenced by the 72% of respondents who had seen impact on revenue from AI expecting to see more impact on revenue in the future. Of the respondents who had seen impact on costs from AI, only 44% expected further impact on costs in the future.
Alongside these common approaches, AI provides countless opportunities to reach your business goals. Whichever aspect of your business strategy could be supported by AI, ensure that it is the strategy - not perceived threat - that drives your adoption of AI.
Read the full report, "Winning with AI" here.
(1) S. Ransbotham, S. Khodabandeh, R. Fehling, B. LaFountain, and D. Kiron (2019), "Winning with AI", MIT Sloan Management Review and Boston Consultancy Group, October 2019