Driving intelligent change: 8 crucial ways in which enterprises can grow with AI
Artificial Intelligence (AI) is set to transform business in ways not seen since the Industrial Revolution, reinventing how businesses run, compete and thrive.
AI is essentially a collection of advanced technologies that allows machines to sense, comprehend, act, and learn. It has the potential to boost rates of profitability by an average of 38 percentage points and could lead to $14 trillion in additional gross value added (GVA) across 16 industries in 12 economies by 2035, according to report by Accenture entitled ‘How AI Boosts Industry Profits and Innovation’.
“The steady decline in business profitability across multiple industries threatens to erode future investment, innovation and shareholder value. Fortunately, a new factor of production—artificial intelligence (AI)—is emerging that can help kick-start profitability,” the report says.
The research shows that Information and Communication, Manufacturing, and Financial Services are the three sectors that will see the highest annual GVA growth rates in an AI scenario, with 4.8%, 4.4% and 4.3% respectively by 2035. AI will help unlock trapped value and will markedly increase the share of profit in industries, the report contends.
The rider is that this will only happen if organizations adopt a people-first mindset and take bold and responsible steps to apply AI technologies to their business. With that in mind, here are eight cross-industry strategies that enterprises can adopt to help seize the AI opportunity.
■ AI strategy and leadership: In too many firms and industries, the impetus and interest for AI comes from the bottom or from the middle of the organization—from digital enthusiasts that have seen these technologies and are personally excited by their promise. But attaining the value from AI will demand recognition and action from the very top of the company.
Going forward, an AI Roadmap will be essential for enterprises. It should be a plan to grow the business, incorporating AI as a critical enabler. As such, it is incumbent on leaders and strategic planners from across the business to have a sufficient grasp of AI to effectively transform existing business plans, to define key decision points and to guide appropriate investment decisions.
■ Reinvent HR into HAIR: Since AI is a form of virtual labour, it will interact with the workforce, contributing and adding value in the same way a human co-worker would. Hence, the role of the Chief HR Officer will not only be about managing human employees, but also supervising AI workers—Human AI Resources. As a result, the CHRO will play a much bigger role in business strategy and innovation, as well as accumulate a greater technical understanding of AI technologies and how these will shape the future of work.
■ Learn with machines: To fully exploit the potential of AI, human and machine intelligence must be tightly interwoven. There will be a need for new skills in the workforce that leapfrog technical expertise, with a new emphasis on human abilities—judgment, communication, creative thinking—that complement technologies. AI will transform not only what people learn, but also how they learn. Traditionally, career paths followed a linear progression from entry level to experienced senior. But, with AI taking over mundane and low-value-added tasks, a skills gap will open up between young professionals and older workers, favoring those workers with experience. To adapt their businesses to the changing nature of learning and employee training, business leaders can focus on the needs of their workforces, particularly in the area of agile skills development.
■ Appoint a chief data supply chain officer: The performance of AI will directly depend on the quality and amount of data that are available. Accenture research shows that the majority of executives are unsure about the business outcomes they derive from their data analytics programs, which can mean that enterprise data remains vastly underutilized. While many large companies already have added a chief data officer (CDO) to the C-suite—Gartner estimates that 90% of large organizations will have a CDO by 2019— a key focus for these executives is on data security, regulations and governance rather than being stewards of treating data as a supply chain.
■ Create an open AI culture: Corporate culture must adapt to the presence of its new AI employees. Humans and machines will be collaborating, teaching and learning from one another. This demands trust, openness and transparency, just as any co-working relationship.
■ Step beyond automation: Automation has been a critical staple of business strategy in the past. Yet, with recent strides in AI, companies need to take a step beyond to harness the intelligence of dynamic, self-learning and self-governing machines. Accenture research reveals that the potential benefits of AI can be considerably greater than the past impact of automation. Embracing AI can be a powerful source of competitive advantage.
■ Take the crowd into the cloud: The next step in innovation will be to combine the crowd-sourced data in the cloud with AI capabilities to create new and disruptive business opportunities. To this end, cloud-based machine learning platforms such as Google Cloud Platform and Amazon Web Services are already in use.
■ Measure your return on algorithms: Traditional measures for tracking capital investments will become outdated in an AI era. CFOs will need a new toolbox of financial metrics to properly assess the “Return on AI.” The bulk of both benefits and costs will appear in future time periods, making it challenging to estimate future value with confidence. This complexity risks deterring AI investment decisions, underlining the urgent need for new thinking and new terminology for capital expenditure and valuation models. Perhaps AI itself will be employed to calculate more accurate predictions across time horizons.