Excitement about AI is at an all-time high. ChatGPT, a conversational AI tool, can write poetry, prepare speeches and perform an extraordinary array of research tasks at lightning speed, from coding to copywriting. From a corporate perspective, executives have bought into AI, with projections of increased spending as firms across sectors seek to harness capabilities at which AI excels, such as automation, prediction and modeling. Forrester’s Global AI Software Forecast, 2022 predicts off-the-shelf and custom AI software spend will double from $33 billion in 2021 to $64 billion in 2025 and will grow 50% faster than the overall software market, with an annual growth rate of 18%.
Yet many companies are still waiting for the true breakthroughs for enterprises and have yet to see the expected value. In 2022, only 22% of organizations in one IDC survey reported that AI is implemented on a large scale as part of the enterprise. AI’s promise to change business and transform how markets evolve has yet to happen at scale.
A key challenge is that AI capability is often developed through bottom-up initiatives, with Centers of Excellence (CoEs) building portfolios of projects focused on proving AI can surpass existing processes. These are often led by technical teams but disconnected from the wider business. The problem is structural, as the people spearheading AI projects tend to only control part of the value stream; the cross-functional, cross-silo way of extracting and creating value in the business. To truly capture value, AI needs to initiate a wider business transformation, requiring a new approach.