AI adoption advances, but foundational barriers remain

 

Here is an excerpt from an article about a major research study, featured in the McKinsey Quarterly, published by McKinsey & Company. To read the complete article, check out others, learn more about the firm, and sign up for email alerts, please click here.

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Survey respondents report the rapid adoption of AI and expect only a minimal effect on head count. Yet few companies have in place the foundational building blocks that enable AI to generate value at scale.
The adoption of artificial intelligence (AI) is rapidly taking hold across global business, according to a new McKinsey Global Survey on the topic. AI, typically defined as the ability of a machine to perform cognitive functions associated with human minds (such as perceiving, reasoning, learning, and problem solving), includes a range of capabilities that enable AI to solve business problems. The survey asked about nine in particular,  and nearly half of respondents say their organizations have embedded at least one into their standard business processes, while another 30 percent report piloting the use of AI. Yet overall, the business world is just beginning to harness these technologies and their benefits. Most respondents whose companies have deployed AI in a specific function report achieving moderate or significant value from that use, but only 21 percent of respondents report embedding AI into multiple business units or functions. Indeed, many organizations still lack the foundational practices to create value from AI at scale — for example, mapping where their AI opportunities lie and having clear strategies for sourcing the data that AI requires.
One critical factor of using AI effectively, the results confirm, is an organization’s progress on transforming the core parts of its business through digitization. At the most digitized firms,  respondents report higher rates of AI usage in more business functions than their peers, along with greater investment in AI and greater overall value from using AI. Another foundational challenge with AI is finding skilled people to implement it effectively. Many respondents say their organizations are addressing the issue by taking a diversified approach to sourcing talent. On the whole, despite reasonable concerns about AI being used to automate existing work, respondents tend to believe that AI will have only a minor effect on overall company head count in the coming years.

How adoption of AI is progressing

The results suggest that most organizations have already begun to adopt AI in their businesses. Forty-seven percent of respondents say their companies have embedded at least one AI capability in their business processes—compared with 20 percent of respondents in a 2017 study who said their companies were using AI in a core part of their business or at scale   —and another 30 percent say they are piloting AI. Still, there remains a lot more potential to use AI across the enterprise; as our previous research has shown, AI opportunities exist in every sector and business function. Just 21 percent of respondents say their organizations have embedded AI in several parts of the business, and so far, investments in AI are a relatively small fraction of companies’ overall spending on digital technologies. A majority of respondents (58 percent) say less than one-tenth of their companies’ digital budgets goes toward AI—though respondents overwhelmingly expect AI investments will increase in the coming years (71 percent say so).

Which AI capabilities have been deployed

Of the nine capabilities we asked about, robotic process automation, computer vision, and machine learning are most commonly deployed. For each of these, at least 20 percent of respondents say their companies have already embedded these technologies into their business processes. Physical robotics and autonomous vehicles are the least commonly deployed, largely because they are relevant only to companies in industries where there’s a clear application; in those sectors, respondents report the outsize use of the capabilities. For example, half of respondents in automotive and assembly (compared with 16 percent of the total average) say physical robotics are embedded in at least one function or business unit.

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Here is a direct link to the complete article.

The contributors to the development and analysis of this survey include Michael Chui, a partner of the McKinsey Global Institute who is based in McKinsey’s San Francisco office, and Sankalp Malhotra, an alumnus of the New York office.

 

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