Artificial intelligence (AI) is not yet giving a big bottom-line boost to most companies, according to a new study by the Boston Consulting Group and MIT Sloan Management Review.
The report, titled ‘Expanding AI’s Impact With Organisational Learning’, found that despite 75% of CTOs believing that AI will contribute to generating value for their organisations, only 6% of Middle Eastern businesses have seen significant financial benefits due to a lack of a holistic approach entailing integration and close interaction between humans and machines.
However, financial gains have started becoming apparent nonetheless. Hence, more and more companies are continuing to adopt AI. Of the regional companies surveyed, the study found that 47% had AI pilots underway or were using AI in full-scale deployments. Furthermore, 58% of these companies revealed they now have an AI strategy in place.
“Multiple technology foundational steps, AI-driven decision-making, and process improvements have enabled companies to generate value with AI,” said Elias Baltassis, Partner and Director and BCG Gamma Lead for the Middle East. “At the same time, several other companies are yet to see a significant return on their AI investments. Our new study reveals organisations that ultimately achieve the most value from AI are the ones implementing a holistic approach – ensuring increased interactions and mutual learning between humans and machines,” added Baltassis.
As per the report, five modes of human-AI interaction have been identified:
- The AI decides and implements a decision on its own.
- The AI makes a decision which a human implements.
- The AI makes a recommendation to a human, but the decision remains in the human’s control.
- An AI generates insights from data that help the human’s decision-making calculus.
- Humans make decisions that an AI system only evaluates after the fact.
The most successful companies were more likely to use multiple modes of interaction, with 20% of regional companies using all five modes and an additional 13% using three or four different modes. Those that used all five modes were six times more likely to see financial gains and amplify their success with AI than those that relied on just one kind of interaction. These findings are significant, especially considering the increased emphasis on implementing AI internally.
“Much like their counterparts in other markets around the globe, regional companies are under various competitive pressures to drive AI strategies within their organisations,” said Rami Mourtada, Partner & Associate Director of Digital Transformation at BCG. “94% of regional CTOs believe that AI will provide an advantage over their competition as opposed to 87% globally, 71% are concerned that they may lose that advantage should competitors begin using AI in their operations, and 77% of global counterparts share the same apprehension. Moreover, market demands are also driving organisations to implement AI, with 60% believing that customers will begin to ask for AI-driven offerings, and another 63% under the impression that partners will ask the same. As such, it is imperative that organisations drive their AI strategies effectively and efficiently.”
“One major takeaway from this report is that Middle Eastern companies need to calibrate their investments in technology, people, and learning processes,” added Mourtada. “Configuring a business to capitalise on AI capabilities requires substantial investment and companies most committed in this direction are far more likely to reap the rewards. Financial investments in technology and people are important, but it is also essential for companies to identify that investing social capital in learning is equally critical to creating significant value with AI.”