The UK is leading the way in Europe when it comes to the adoption of AI, with a fifth (18%) of companies based here already at the most advanced stage of AI maturity, the highest proportion in Europe, ahead of Germany (16%) and France (12%).
Three-quarters (73%) of UK business leaders see AI playing a crucial role in their future, more than the average of two-thirds (67%) among European organisations and again the highest in Europe. These are among the key findings of a study by Cognizant into return on investment in AI technology.
The COVID-19 pandemic has reemphasised the power of AI as companies now use it to predict trends in real time, personalise customer experiences, and even explore coronavirus treatments and vaccines. But the crisis has also exposed the limits of how AI is traditionally used in business. Models needed to be retrained to continue working during a period of dramatic change.
As the pandemic propels businesses into a digital-first world, AI will become a key driver of corporate growth and competitiveness, with the growth in European companies’ annual spend on the technology set to double in the next three years – from 4.44% last year to 8.83% by 2024. And as digital leaders know, AI is not a silver bullet or a one-size-fits-all solution. AI solutions can fail to deliver if the wrong business case is selected, the right data is not identified, the data is prepared incorrectly, or the model is not built for scale. That is why AI results vary so much today.
To help executives drive ROI from AI, ESI ThoughtLab, together with a group of AI leaders, including Cognizant, conducted a worldwide benchmarking study among 1,200 organisations across industries. The benchmark revealed that almost two-thirds of senior executives see AI as highly important to the future of their businesses, rising to three-quarters (73%) in the UK. Recognition of AI’s future importance is nearly unanimous, noted by 98% of AI leaders and 85% of the world’s largest organisations (with revenue over $20 billion).
Below are some additional noteworthy results:
Adoption and advancement of AI will significantly increase
Executives understand the value that AI will bring to a post-pandemic world of personalised digital experiences, flexible working, agile supply chains, and rapid decision-making at a time when finding cost efficiencies will be paramount. Companies have ambitious plans to move up the AI maturity curve. Presently, just 15% of global firms and only 12% of European firms are at the highest stage of AI maturity, though the UK far outperforms its counterparts, with 18% of its companies classed as ‘AI Leaders’ – more than any other European country.
Fourfold increase in early-stage industries
In industries that are in earlier stages of their AI journey—such as insurance, wealth and asset management, and media and entertainment—the increase will be fourfold. The number of firms proficient in the use of various AI technologies will also jump over the next three years: for RPA, the share will climb from 29% today to 68% by 2023; machine learning, from 19% to 45%; chatbots, from 25% to 59%; and deep learning, from 11% to 20%. By embracing AI, firms are already improving productivity and profitability, employee engagement, customer satisfaction, planning, and decision-making. As firms become leaders in AI, they find that they can achieve even more strategic benefits, such as accelerating time-to-market, fostering global expansion, enhancing innovation, building market share, and creating new business models.
New challenges such as data quality and data governance appear
As companies scale AI across their organisations, other hurdles become more daunting, including managing risks and ethics, and embedding AI into day-to-day business processes. The biggest challenges involve data quality (38% of companies), governance (36%), security (36%), integration (36%), and identifying trusted data (3%). Businesses spend about 35% of their AI budgets on data management.
Companies globally are continuing to struggle to maximise the financial benefits of AI, with two-fifths (40%) of AI projects losing money or just breaking even. Even among those that succeed, the average ROI is currently just 1.3%, and while AI can offer significant ROI, results do not come overnight. The study found that there are often overly optimistic expectations of fast rewards when it in fact takes time to identify the appropriate business case, acquire and prepare the right data, and then build, test, refine, and deploy working models. Payback periods of six months are the exception, not the rule. The average payback period for AI investments is around 17 months.
“After COVID, firms are not going back to the old, unproductive ways of working,” says Bret Greenstein, SVP, Global Head of AI and Analytics, Cognizant. “Now that they are forecasting daily, they will not return to monthly. Executives realise that real-time access to data and the use of AI and ML for forecasting and planning makes you that much more efficient and resilient. Once the bar has been raised on efficiency, companies will keep going with fewer people to preserve margins and stay competitive.”