IFS commissioned research shows value
creation lags AI promise without the right planning and
application
LONDON, April 23,
2024 /PRNewswire/ -- New research from IFS, the
global cloud enterprise software company, has found that executive
and board leadership have 'bought the AI hype' but organizations
are unable to deliver operationally on expectations. The new global
study of 1,700 senior decision makers, Industrial AI: the new
frontier for productivity, innovation and competition, found
that the promise of AI is being held back by technology, processes
and skills. Half of respondents remain optimistic that with the
right AI strategy, value can be realized in the next two years, and
a quarter believe in the next year.
Expectations failing to meet reality
84% of executives anticipate massive organizational benefits
from AI, with the top three areas AI is expected to deliver value
in being high-impact: product & service innovation, improved
internal & external data availability, and cost reductions
& margin gains. The hype has become so high that 82% of senior
decision-makers acknowledge that there is significant pressure to
adopt AI quickly. However, this same group of respondents state
that they are concerned that a failure to plan, implement and
communicate properly means AI projects will stall in pilot
stage.
Many organizations have not prioritized elements of development,
nor have the infrastructure required to reap the rewards or the
skills to deliver on that promise. The study found that over a
third (34%) of businesses had not moved to the cloud. While this is
not essential to AI adoption, it is indicative of an unprepared
enterprise unlikely to be able to scale AI across their business.
According to IFS, a robust Industrial AI strategy requires a potent
combination of cloud, data, processes, and skills. 80% of
respondents agree that the lack of a strategic approach means they
have insufficient skills in-house to successfully adopt AI. This
sentiment is seen elsewhere in the research with 43% of respondents
rating the quality of AI resources in their business, in terms of
human skills, as passable and not where it needs to be.
Christian Pedersen, Chief
Product Officer, IFS, commented: "AI is poised to become
the most transformational enterprise tool ever seen, but our
research reveals that there are still fundamental misunderstandings
about how to harness its power within an industrial setting. It is
telling that AI is expected to significantly reduce costs and raise
margins, but a lack of robust strategy means most businesses are
under-skilled and under-prepared to achieve these ambitions. We
built IFS.ai specifically with these challenges in mind. AI value
simply will not be found in a single AI capability but instead by
delivering AI across all products and business processes. This
supports customers' decision cycles and provides the data and AI
services required to realize value faster."
Pedersen continued: "Achieving this at scale needs a
clear-eyed strategic focus, including the high-impact use cases
specific to their industry, having a cloud-based infrastructure in
place which has industrial AI embedded, and investing early in
developing the skills needed. Adopting this approach will turn the
tide of disillusionment, and deliver the benefits that boards and
the C suite are demanding."
Outlook optimistic but planning needed
The unfortunate reality of the skills gap means that in terms of
AI readiness, many businesses are falling behind. IFS found that
nearly half of respondents (48%) were most likely to say that they
are gathering proposals and were much less likely to have a clear
strategy and perceivable results (27%). A fifth of respondents are
in the research phase, with uncontrolled tests taking place and a
further 5% are lacking a coordinated approach and do not have
anything in motion yet. Despite initial challenges, there is still
optimism with respondents most likely to feel AI could make a
significant difference to their business in 1-2 years (47%), and a
further quarter (24%) believe it could be within a year.
In particular, respondents are most optimistic about the impact
of AI in smart production and/or service delivery on effectiveness
& business and operational management (22%) in the future. One
fifth see the biggest impact being on innovation with new products
and services (20%), growth & business model decision-making
(20%), empowering people and increasing talent retention (19%), and
customer experience and customer service (19%).
Action needed on data readiness
To reap these benefits, enterprises need to leverage the most
strategic asset they have – their data. The right data volume and
quality is critical for the success of AI applications. Respondents
recognize how important real-time data is to successful AI
projects, with over 4 in 5 (86%) stating this. Yet despite this
recognition, less than a quarter (23%) of respondents have
completed their data foundation with it supporting both data-driven
business decision making and real time response to changes,
suggesting that more work needs to be done to get data AI ready.
Moreover, under half (43%) of respondents have majority structured
data, with some unstructured.
Pedersen commented: "The lack of maturity at the data
foundation layer needs to be addressed as part of an overall AI
strategy, otherwise AI simply will never be the magic bullet that
can turbocharge the enterprise. Clearly enterprises need support on
data management and migration. While AI is seen as a shiny new tool
that will revolutionize business, like all technology, it is never
that simple. The power of Industrial AI is that it can touch all
facets of a business from product innovation and customer
experience to productivity and ESG. Its potential is massive if
executives and organizations can combine vision, strategy,
technology and skills. Now is the time to step back, take stock,
and build a true Industrial AI plan and turn the hype into
reality."
Methodology:
Censuswide surveyed 1,709 C-level/President/SVP/Directors
who work in Manufacturing, Telecommunications, A&D, Services,
Construction & Engineering or Energy & resources in
organizations with $50m+ annual revenue (Aged 18+) across the UK,
USA, Canada, Germany, France, UAE, Norway, Japan, Australia, Sweden, Denmark and Finland between 06.03.2024 - 27.03.2024.
IFS Press Contacts:
MEA& APJ: Adam Gillbe
Corporate Communications
Email: press@ifs.com
Phone: +44 7775 114 856
USA: Mairi Morgan
Corporate Communications
Email: press@ifs.com
Phone: +44 7918 607 299
This information was brought to you by Cision
http://news.cision.com
https://news.cision.com/ifs/r/management--bought-the-ai-hype--and-expect-value-but-research-shows-lack-of-organizational-readiness,c3965172
The following files are available for download:
https://mb.cision.com/Main/855/3965172/2749130.pdf
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SOURCE IFS