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Only a small group of companies is harnessing the potential of AI

A new study from Boston Consulting Group and MIT Sloan Management Review reveals managers’ growing concerns about the risks of AI. Additionally, it highlights the five organizational behaviors that companies taking advantage of AI’s value have in common.

After many decades of progress, artificial intelligence is ready to become an important resource for many businesses, but according to the new study from MIT Sloan Management Review (MIT SMR), BCG GAMMA and BCG Henderson Institute from Boston Consulting Group, companies are still not yet aware of its potential. The study reveals that although managers consider AI to have the potential to be an important business opportunity, many are increasingly more worried about the strategic risks associated with AI.

Titiled Winning With AI: Pioneers Combine Strategy, Organizational Behavior, and Technology, the study is based off of a survey of more than 2,500 managers and 17 interviews with leaders and experts. The data reveals that:

  • Nine out of ten managers agree that AI presents a business opportunity for their companies.
  • Currently, seven out of ten companies refer to a minimal or zero impact of AI. 90% have made at least one investment related to artificial intelligence, but less than 40% claim to have earned income thanks to AI in the last three years.
  • In 2019, 45% perceive some sort of risk associated with AI, an increase from 37% in 2017.

“The report confirms that artificial intelligence is a relevant topic for leaders of all industries. However, despite the fact that some companies have already made significant progress, most still have difficulty generating value with artificial intelligence,» says Sam Ransbotham, one of the authors of the report. «How can corporate leaders seize opportunities, manage the risks and minimize the difficulties associated with AI? There are increasingly relevant unknowns that companies need to respond to move forward creating value associated with AI. ”

The study shows that businesses today that are managing to create value through their AI initiatives with these five common behaviors:

  1. They integrate their AI initiatives into their business strategy. 88% of respondents who found value in AI in their business strategies integrated their AI initiatives with their digital strategy.
  2. They unify their AI initiatives with their transformation strategies. To generate business value through AI, managers must be able to obtain data from different departments and initiatives and integrate them into work groups by establishing cross-functional collaboration.
  3. They take bigger risks, prioritizing revenue growth over cost reduction. Respondents who only highlighted cost reduction as a result of AI initiatives are less optimistic about the possibility of achieving greater savings with AI than those who have seen revenue growth. Only 44% of those who have managed to reduce costs expect the same results in the next five years, while 72% of those who have increased revenues expect that success to continue in the same period.
  4. They align the development of AI with its use. Beyond the tools, systems or processes to implement artificial intelligence, these companies ensure that employees use solutions that use AI, can measure results and are aware of the value generated.
  5. They avoid the «technology trap.» Companies that perceive that they increase value thanks to AI initiatives recognize that it is not only a technological opportunity, but also a strategic initiative that requires investments related to the recruitment and retention of talent, new ways of working and change management. Companies with AI initiatives supervised by the CIO, whose team usually manages technology initiatives, are almost 50% less likely to see the value that AI can bring.

«As business leaders develop a strategy with AI, talent is a complex problem without an easy answer. The capabilities that required of future workers will differ from current ones, not just for the relatively small number of workers who develop solutions related to artificial intelligence, but even more important for a much larger number of workers who will use artificial intelligence solutions directly or indirectly, «says report co-author Sam Ransbotham.

The results of the report regarding talent development reveal that 65% of respondents obtain business-related value in the use of AI when they use a varried approach: they build internal teams and rely less on external suppliers; selectively import talent with AI experience for technical leadership roles; and train their current employees in skills related to the understanding and management of artificial intelligence (upskilling).

In Spain, Llorenç Mitjavila, head partner of BCG Gamma in Iberia, believes that there is a virtuous circle in the development of AI. “Access to talent, the consolidation of Spain as a technological and innovation hub, and eminently positive media coverage, contribute to a general enthusiasm for Artificial Intelligence. Many of the big Spanish companies are investing in AI solutions, and we have a vibrant ecosystem of start-ups based on these technologies that are attracting very significant investments. ”

«AI is an important strategic opportunity, which entails strategic risks if companies do not act carefully. There is already a gap between winners and losers, and this gap will increase in the coming years. To obtain value, technology and algorithms are not enough, companies must integrate AI into their corporate strategies and processes, which is often much more difficult than the technology itself and to succeed in doing so requires new ways of working that differ from the approach required to obtain value from technological initiatives «concludes Shervin Khodabandeh, another one of the authors of the report.


Winning With AI: Pioneers Combine Strategy, Organizational Behavior, and Technology: Link



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