AI has been leading the charge on customer experience, but the technology is growing in a way that will force more companies to get on board with it to drive revenue growth.
Following the lead of tech innovators, more companies have been focusing on the customer to deliver a better experience, service or cheaper goods. In no small part that has been driven by technology empowering an improvement in processes at the company level to deliver better service or cost savings that underwrite cheaper prices. And of course at the customer interface point companies have embraced algorithms and AI to deliver a more personalised service.
According to a recent study by the Boston Consulting Group, AI is moving to a new phase.
After conducting a survey of 3,076 business executives the firm classified companies “into four groups based on respondents’ responses to questions about their levels of AI adoption and AI understanding.
- Pioneers are enterprises that have an extensive understanding of AI tools and concepts and significant levels of AI adoption;
- Investigators understand AI but have limited adoption;
- Experimenters have adopted AI but with limited understanding of it, and;
- Passives have limited adoption and understanding of AI.
What’s important about this research is that it is becoming apparent that the “Pioneers”, as BCG calls them, are then benefiting from a positive feedback loop in terms of the use of AI in their businesses, cost savings and increasingly increases in revenue.
The study showed is that while Pioneers represent only 20% of the companies, 88% of that 20% are investing more in AI. That’s because many companies have found that while it “it is easy to apply AI and get quick results [what] is not so easy is building a system of AI applications along with associated data pipelines that interact and are reliable”.
But 90% of Pioneers are doing this. They are investing more and have a strategy to change the nature and use of their AI capabilities such that AI is morphing to a prioritisation of “revenue-generating applications over cost-saving ones”.
From efficiency gains to income generation. The arms race for revenue growth has begun.
Indeed BCG says that while other tiers in the AI adoption process – Investigators, Experimenters, and Passives – are still focused on cutting costs, “72% of Pioneers say AI will deliver mainly revenue increases in the next five years”.
What’s critical here for any company trying or wanting to compete with these businesses further along the AI implementation and understanding journey is that “the majority of all organizations (58%) foresee modifications of their business models due to AI within five years. This is true across all levels of AI maturity and across a variety of industries”.
So why wait?
Naturally there are questions of understanding AI, having the capability and staff levels to implement AI on an organisation wide basis, and of course data quality issues — all of which are an impediment to companies trailing the Pioneers in AI adoption and usage.
Companies need to understand that the “myth” that AI will be widely available and level the playing field is just that. The study suggests AI Pioneers are pulling away from the competition.
As a result BCG says:
Will the pursuit of artificial intelligence prove to be another situation where leading enterprises, having established a healthy head start, increase the gap between themselves and their less mature peers? At the moment, this is an open question. With rapidly evolving and unfamiliar technology, “fast-following” might work, whereby followers let others forge ahead with experiments and learn from their successes and failures. But those hoping to fast-follow others’ pioneering work without taking risks themselves should beware: Pioneers, by deepening their commitments to AI, are establishing positions in both customer and labor markets that may make it hard for others to draft off of their hard work. The many advantages reported by Pioneers suggest that early AI movers may be especially hard to catch.
AI is becoming operational table stakes and it’s morphing from cost and efficiency savings into revenue and thus income generating activities.
What you need to know is that this study suggests the sooner your business moves into and through the AI journey the better off it will be over the medium and long term.
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