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Senior execs slow on going with AI-related enterprise changes: TCS study
At least 54% of senior executives who have responded believe that their company is a long way from fully leveraging Al, with the primary barrier being the quality and availability of enterprise data.
Lack of tracking metrics and inadequate IT infrastructure propel only a select few senior executives ranked vice-president (VP) and above to consider discussing generative artificial intelligence (GenAI) and make enterprise-wise plans for it, according to a study conducted by Tata Consultancy Services Ltd.
India’s biggest IT Services firm conducted a study to gauge the impact of AI on business based on inputs from 1,272 executives ranging from VPs to business heads and chief executives officers (CEO) in 24 countries across 12 industries.
According to the TCS AI for Business Study titled "From potential to performance by design," only 17%, or about 216 senior executives are considering discussing generative AI and making enterprise-wide changes on them. This comes on the back of more than half the respondents stating that GenAI’s impact on their business model will be greater than that of previous disruptive technologies like the internet and smartphones.
At least 54% of senior executives who have responded believe that their company is a long way from fully leveraging Al, with the primary barrier being the quality and availability of enterprise data.
Even attempts to migrate to an impactful AI environment are little. Cloud, considered a foundational pillar for AI has not seen much traction from the top management of those companies that have responded either. Only 29% of the companies, or about 369 of them in absolute numbers that were part of the study, are cleaning up their data and migrating to the cloud.
The response by industry leaders follows an optimistic cloud prospect by K. Krithivasan, chief executive of Mumbai-based TCS. “Today, clients are seeing cloud as a strategy for business transformation and growth. The shift to cloud-native products and platforms is being fast-tracked, to achieve increased collaboration, security, scalability and efficiency,” said Krithivasan in a letter addressed to stakeholders in the annual report for the financial year ended March 2024.
Legacy issue
On challenges companies found while integrating AI into their businesses included inadequate IT infrastructure as many of the companies that took part in the TCS study found that their legacy hardware, software and data ecosystems were not capable of handling complex AI algorithms.
"The IT infrastructure and applications that some large enterprises have are largely legacy-based. The focus for IT companies is on how to make these clients AI-ready. AI will only help if there is robust data, processes and applications are up to date. That is where the service providers will have a lot of work to do. Leading service providers are at an edge here as they have industry-specific focus," said Mrinal Rai, principal analyst for Stamford-based IT advisory firm Information Services Group Inc.
The study also revealed that security, privacy and the ethical uses of AI were the primary concerns of companies when it came to internal GenAI challenges. Every two out of five respondents preferred global AI standards regulating outcomes.
Companies were also of the view that they were unable to track the progress of AI deployment in their businesses due to a lack of ill-defined performance metrics. Only about one in five respondents felt they had a “good enough” metric for AI deployment. This inability to track AI progress and assess its effectiveness resulted in companies being unsure on the kind of AI technologies to adapt.
Focus on human creativity
Two-thirds of executives that took part in the study believe that human creativity or strategic thinking will remain their company's competitive advantage, indicating that AI was far from making a substantial business impact.
“Right now, most organizations use AI to assist humans. As it matures, we will increasingly see AI used to augment human activities and ultimately, transform businesses by elevating human thinking with the ability to ideate based on machine output,” said Krithivasan as part of the study.
However, almost half the respondents admitted to the AI threat on human jobs. At least 47% senior executives believe that AI will eliminate more jobs than create them.
On AI translating into revenue, most of the respondents believed that companies must look to build in AI strategies that can drive revenues, save costs and improve customer experiences rather than mainly focus on shoring up revenues.
"Out of 18 possible business objectives driving current AI investments, expanding revenue opportunities ranked 17th. And without sufficient KPIs (key performance indicators), it is challenging to be AI to revenue,” read a finding from the TCS study.
According to the study, the 'banking, financial services and insurance' vertical was the most optimistic about AI's potential and oversaw the highest completion rates for AI projects. The sector also expects AI to increase or hold steady the number of jobs.
The study also shows that the consumer packaged goods sector, that has a high reliance on quality and little room for margin, is still in the early phase of AI adoption and exploration.
In the financial year ended March 2024, TCS became the first Indian IT company to merge its cloud and AI business, signalling that it would have one team to deliver AI solutions across verticals and geographies.
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Business NewsCompaniesSenior execs slow on going with AI-related enterprise changes: TCS study
First Published:15 May 2024, 02:13 PM IST
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