4 minute read 6 Mar 2020
Two engineers working at console together article

How accelerating AI can drive growth

By

Jim Little

EY Global Microsoft Alliance Lead and EY Americas Technology Strategy Lead

Technology enthusiast. Former CIO. Passionate about helping companies re-imagine their business, value propositions, customer and employee experiences using technology.

Contributors
4 minute read 6 Mar 2020

Organizations that make AI a priority investment are already reaping the benefits.

AI is a hot topic for businesses looking to become more customer-centric and efficient. Companies are looking to the technology to power a range of solutions, such as voice assistants, natural-language processing, forecasting tools and e-commerce advertising. Leaders employing what we call the technology@speed approach are using new tools such as AI to develop new business models, and are deploying tech much faster to keep up with changing customer expectations.

Gartner says that, in 2021, AI augmentation will create $2.9 trillion of business value, and 6.2 billion hours of worker productivity globally.¹ However, while the hype around AI has been massive, the benefits have not been realized across all companies.

A report commissioned by EY, Six habits of transformation leaders, shows that of 500 corporates surveyed, fewer than half (47%) say AI accounted for the largest share of their investment over the past two years. This puts AI in fourth place, behind cloud (60%), data and advanced analytics (52%), and the Internet of Things (IoT) (50%).

Organizations making AI a priority investment

47%

of 500 corporates surveyed say AI accounted for the largest share of their investment over the past two years.

So, who is spending on AI? The transformation leaders. Some 54% say AI accounted for the largest share of investment in the past two years, compared with just 34% of laggards, who are still investing mainly in cloud and data-analytics technology – suggesting they are still getting to grips with the basics around transformation (figure 1). And while leaders still spend more on cloud efforts, they appear to be using it to underpin developments driven by more advanced technology. For instance, IoT technology is also high on the agenda for leaders and, to some extent, this technology goes hand in hand with AI: IoT devices generate huge volumes of data, while AI helps companies give meaning to the data to create real customer value.

Figure 1: Leaders spend more on AI than laggards

Levels of investment provide a good indication of a company’s maturity in a specific technology, but it only tells part of the story. It’s also essential to look at the impact technology is having on the business.

Our research shows that leaders not only invest more heavily in AI than laggards, but they also gain more benefit as a result. Among companies where AI accounted for the largest share of investment in the past two years, 88% of leaders say AI helps them innovate, compared with just 56% of laggards (figure 2), although it must be noted that only a small number of laggards have so far invested in AI.

Figure 2: Leaders get more value out of AI than laggards 

The data suggests that laggards are failing to capitalize on the value offered by AI. The solution, according to EY’s Global Data and Analytics Leader for Consulting Services, Beatriz Sanz Saiz, is first prioritizing where the technology is deployed. “The future is about embedding AI in core processes,” she says. “That way companies get smarter by the second. Think about what your problem is. Is it in the front office, with customer experience? Is it a problem with operations, or with pricing? I think that’s the first question that a business needs to address, because not everything has the same priority. Then align AI to the process and business need.”

  • AI in action: The energy company

    Sembcorp Industries, a Singapore-headquartered multinational integrated energy player, uses AI and machine learning to power a number of solutions that drive positive business outcomes.

    “As Singapore’s largest home-grown international renewable energy player, we’ve built several machine learning-based applications that help us improve wind generation through better forecasting, turbine alignment and predictive maintenance,” says Sembcorp’s Chief Digital Officer Matthew Friedman.

    “We’ve also built several AI and machine learning applications to improve power-plant performance, to more accurately predict energy and commodity prices, and we even use video analytics for health and safety. We’ve also been actively applying machine learning to optimize our industrial wastewater processing plants.”

  • AI in action: The insurer

    Spanish insurer MAPFRE has prioritized the development of AI-driven solutions in order to better serve its customers.

    “At MAPFRE we are very committed to AI,” says the company’s Chief Digital Business Officer, Mónica García Cristóbal. “Today, each customer wants to be treated personally. The advances in AI and big data allow us to better understand our customers, interact with them in a more efficient and proactive way, anticipate their needs, and increase their perceived value.

    “To lead the digital insurance market, it is essential to take advantage of all the technological advances that allow us to increase our digital business, whether through intelligent automation, artificial intelligence, or connected devices. To achieve that, MAPFRE is making great efforts in innovation through MAPFRE Open Innovation (MOi). We work with start-ups that allow us to build new business models that can be incorporated in the medium term into our strategic business initiatives.”

Actions for the boardroom

Becoming a transformation leader requires companies to not just experiment with AI, but also deploy it into core value-creation areas. It’s crucial that this process is carefully thought through and carried out quickly and efficiently in order to keep up with changing customer and employee expectations. Critical actions for the boardroom include:

  • Assess current processes, products and services that can be improved through AI
  • Build completely new use cases from the ground up
  • Develop a robust value-measurement process, so companies can better monitor and assess the benefits they are receiving from the solution

Finally, it is essential companies remember that AI, or any other technology, should enable and empower change and innovation, but not be the focal point of transformation efforts.

Summary

While the hype around AI has been massive, it is not yet playing out in reality across all companies. However, within a group of digital transformation leaders surveyed by EY, significant AI investment and deployment was found to be one of six habits that set these leaders apart. And critically, those investments are having a greater effect on innovation, sales and market share than they are for laggards.

About this article

By

Jim Little

EY Global Microsoft Alliance Lead and EY Americas Technology Strategy Lead

Technology enthusiast. Former CIO. Passionate about helping companies re-imagine their business, value propositions, customer and employee experiences using technology.

Contributors