According to research from IFS, the global cloud enterprise software company, 84 per cent of executives anticipate massive organisational benefits to stem from artificial intelligence (AI). However, despite optimism, the research revealed nearly half (48 per cent) of respondents aren’t ready to integrate the technology and are still reviewing proposals.
The research titled Industrial AI: the new frontier for productivity, innovation and competition shows that many organisations are buying into the AI hype. In fact, it revealed that 82 per cent of senior decision-makers acknowledge that there is significant pressure to adopt AI quickly as it can impact product and service innovation; improved internal and external data availability; and cost reductions and margin gains.
Due to these growing pressures though, the same decision-makers are concerned that AI integration plans will stall at the pilot stage if the correct amount of research and preparation isn’t done.
New tech needs new infrastructure
For the latest technologies to be most effective, it is often recommended that organisations ensure they are using the latest core infrastructure to allow the tech to run smoothly. However, the research found that 34 per cent of businesses have not moved to the cloud. While cloud infrastructure isn’t essential for AI to run, it is indicative of a firm’s attitude towards change as without the cloud, it will struggle to scale effectively and efficiently.
According to IFS, a robust industrial AI strategy requires a potent combination of cloud, data, processes, and skills. Eighty per cent of respondents agree that the lack of a strategic approach means they have insufficient skills in-house to successfully adopt AI. This sentiment is seen elsewhere in the research with 43 per cent of respondents rating the quality of AI resources in their business, in terms of human skills, as passable and not where it needs to be.
The unfortunate reality of the skills gap means that in terms of AI readiness, many businesses are falling behind.
IFS found that nearly half of respondents (48 per cent) were most likely to say that they are gathering proposals and were much less likely to have a clear strategy and perceivable results (27 per cent).
A fifth of respondents are in the research phase, with uncontrolled tests taking place and a further five per cent are lacking a coordinated approach and do not have anything in motion yet.
Attaining the benefits of AI
Christian Pedersen, chief product officer, IFS, commented on the research saying: “AI is poised to become the most transformational enterprise tool ever seen, but our research reveals that there are still fundamental misunderstandings about how to harness its power within an industrial setting.
“It is telling that AI is expected to significantly reduce costs and raise margins, but a lack of robust strategy means most businesses are under-skilled and under-prepared to achieve these ambitions. We built IFS.ai specifically with these challenges in mind. AI value simply will not be found in a single AI capability but instead by delivering AI across all products and business processes. This supports customers’ decision cycles and provides the data and AI services required to realise value faster.”
Pedersen continued: “Achieving this at scale needs a clear-eyed strategic focus, including the high-impact use cases specific to their industry, having a cloud-based infrastructure in place which has industrial AI embedded, and investing early in developing the skills needed. Adopting this approach will turn the tide of disillusionment, and deliver the benefits that boards and the C suite are demanding.”
Despite initial challenges, there is still optimism with respondents most likely to feel AI could make a significant difference to their business in 1-2 years (47 per cent), and a further quarter (24 per cent) believe it could be within a year.
In particular, respondents are most optimistic about the impact of the tech in:
- smart production and/or service delivery on effectiveness and business and operational management (22 per cent) in the future
- innovation with new products and services (20 per cent)
- growth and business model decision-making (20 per cent)
- empowering people and increasing talent retention (19 per cent)
- customer experience and customer service (19 per cent)
Action needed on data readiness
To reap these benefits, enterprises need to leverage the most strategic asset they have – their data. The right data volume and quality is critical for the success of AI applications. Respondents recognise how important real-time data is to successful AI projects, with over four in five (86 per cent) stating this.
Yet despite this recognition, less than a quarter (23 per cent) of respondents have completed their data foundation with it supporting both data-driven business decision-making and real-time response to changes, suggesting that more work needs to be done to get data AI ready. Moreover, under half (43 per cent) of respondents have majority structured data, with some unstructured.
Pedersen added: “The lack of maturity at the data foundation layer needs to be addressed as part of an overall AI strategy, otherwise the tech simply will never be the magic bullet that can turbocharge the enterprise. Clearly enterprises need support on data management and migration. While AI is seen as a shiny new tool that will revolutionise business, like all technology, it is never that simple.
“The power of industrial AI is that it can touch all facets of a business from product innovation and customer experience to productivity and ESG. Its potential is massive if executives and organisations can combine vision, strategy, technology and skills. Now is the time to step back, take stock, and build a true Industrial AI plan and turn the hype into reality.”
Francis Bignell
