Effective AI Strategy

Embracing AI: 3 Key Strategies To Get Ahead

Apr 06, 2024

 

Read time: 5 minutes


 

In boardrooms across the globe, AI is topping agendas, but a tale of two approaches is unfolding. 

There’s an unmistakable split: On one side are businesses moving forward, working hard and figuring out how they can integrate AI into the core of their operations, and on the other are those proceeding with caution, watching from the sidelines. 

The decisions made today might be fundamental in shaping a company's future.

Consider the churn of the S&P 500: a significant turnover every few years due to innovation, acquisition, and market shifts. With the advent of AI, predictions are that this rate of change is set to accelerate with some saying half of companies will be replaced in the next decade. 

 

So, what's causing the hesitation? 

And, more importantly what do you need to know to ensure you’re not left behind? We break down the three key steps to stay ahead down below.


A new attitude towards spending on AI tempered by hesitation

“We move from talking about AI to applying AI at scale,” - Microsoft CEO Satya Nadella, in February 2024.

Satya Nadella’s comments sum up big tech’s sentiment around AI’s role in business today. This makes sense as they’ve got a vested interest in seeing this succeed. 

However, the big question is not just about the sentiment but what are businesses actually doing?

 

AI Tops Priorities for 2024

A recent survey by BCG of 1,400 C-Suite Execs revealed a dramatic shift in attitudes towards AI. 

90% of executives now consider Artificial Intelligence (AI) and Generative AI to be a top-three tech priority for 2024. 

And a whopping 85% of leaders say they are planning to increase their AI spending this year.

Which read at face value seems to paint a very rosy picture of AI and adoption. But that might not be quite the case.

 

The Reality of AI Adoption is a Little Different

The other side of the coin, as highlighted in the report is that there are many lagging and watching from the sidelines. 

  • There’s been very little progress on AI training within companies, a key requirement to be able to use the tools safely and efficiently.
  • There’s confusion from leaders around what they can, and can’t, use AI for - showing a lack of alignment and policy.
  • Two-thirds of leaders are ambivalent or dissatisfied with their companies' progress.

 

A Worrying Lack of Confidence in Executive Teams

With 59% of leaders having limited or NO confidence in their executive teams' proficiency in GenAI. This is clearly one of the key reasons causing hesitation. There are valid risks of using AI in the wrong place, or without proper understanding that could cause severe impact to a business. As executive teams don’t have enough understanding of the tech, progress has the brakes slammed on.

 

From Hesitation to Action: The AI Investment Journey

While there's hesitation among executives regarding AI, the transformative potential of AI in business cannot be overstressed. Moving from a cautious observer to action involves understanding, alignment and planning. 

 

Maximising Returns: Unpacking the Real ROI of AI 

While “AI” sounds great in earning calls and PR campaigns, its true utility lies in its potential ROI. 

Microsoft commissioned a global study which revealed that for every $1 companies invest in AI, they are realising an average of $3.5 in return, and 5% of organisations worldwide are realising an average of $8 in return. These gains come in the form of improving output, saving costs of operations or more.

A great example is Microsoft-owned Nuance and its automated clinical documentation tool called DAX Copilot. DAX Copilot uses generative AI to automatically create secure clinical summaries in seconds during patient visits. Doctors report saving 40 minutes daily and a significantly improved documentation experience thanks to the software.

Nuance’s success is indicative of AI’s track record of positive ROI in the fields of Healthcare Diagnostics, and other industries like security, document processing, manufacturing, inventory management, and agricultural monitoring. 

We have worked across many AI projects and seen the real-world ROI to be greater than the benchmarks stated here and in some cases delivering triple-digit percentage returns in the first year.

If AI is to increase corporate profits by 4.4 trillion a year, as predicted by McKinsey, we can expect many more ROI-positive outcomes in numerous industries.

Private Sector AI Expenditure

Earning calls this year have become an AI symphony, with every company playing the same ambitious investment tune. While this might be predictable, no one is surprised by the attitude of FAANG companies in particular.

Nvidia's $1 trillion milestone wasn't a fluke. Their Q2 sales forecast of $11 billion hinges on booming demand for AI-powering graphics processors. From Google and Microsoft to OpenAI, the investment direction is clear: AI is the future.

Gartner's survey confirms it: 90% of CFOs plan to ramp up AI spending in 2024, with a focus on Generative AI and automation. Companies like Duolingo have turned to automation for repetitive tasks like updating vocabularies and live translation. Creative work hasn’t been spared, as MSN laid off writers to lean on AI for their content creation needs.

VCs, however, are taking a more measured approach. The pace of AI investment has slowed, with established players like OpenAI and DeepMind with clear revenue models attracting more interest than risky startups. But don't be fooled – AI companies still captured a remarkable 20% of all VC funding in February 2024.

Public Sector AI expenditure

Governments worldwide are recognising the potential of AI for economic growth and social progress. 

The US, the world’s leader in AI, recently passed a $3 billion budget to "responsibly develop, test, procure, and integrate transformative AI applications". The Budget allocates a mandatory $300 million to boost agency AI spending, tackling risks and promoting public benefits.

Elsewhere, the UAE’s Artificial Intelligence and Advanced Technology Council recently unveiled MGX, an AI investment firm that plans to amass $100 billion in assets within the next few years. Similarly, Saudi Arabia reportedly plans to create a fund of about $40 billion to invest in AI, in partnership with Andreessen Horowitz.

Sam Altman meets Sheikh Maktoum in Dubai

 

The 3 Steps To AI Success

As AI becomes increasingly integral to business operations, companies that are successfully figuring out AI's complexities and where it delivers value within their business are getting some key things right. 

Now, let's unpack how your company can transition from being on the sidelines to getting into the game with three key steps:

    1. An Aligned AI Vision: If you went back to the beginning of the internet and knew what you know now, you wouldn’t have set out with the goal of building a website, you would have set out with a goal of understanding digital and how this could be incorporated into the right areas of your business over time. It’s the same with AI. From the top down, creating a vision that flows down into the company is crucial. This then means continuous training and upskilling of teams is crucial and not a one-time endeavour. 
      • We’ve trained over a hundred global brands including the likes of Visa, TFL, BT, Manchester United and many others. Want to find out more about training your teams, get in touch.    
    2. A Company AI Policy: A clear AI policy can serve as a roadmap, aligning various teams and clarifying the company's AI vision. It provides clarity and alongside training means departments can then create their own versions based on the tools and approaches that are most applicable to them. 
      • We have a comprehensive AI Policy framework if you need help to get going - you can download it here.    
    3. Identify High-Impact Areas: Companies forging ahead are making the right decisions on where to start. This is generally the highest value, lowest complexity area. The benefit of starting with manageable, high-impact AI projects is that you can also upskill teams in the process and build momentum quickly. 
      • If you need help we have a fast-start strategy sprint that gets you there in under 6 weeks. Download the strategy canvas here to help you get started or get in touch to find out more.

 

Conclusion

As the AI landscape evolves, so too must your strategy and approach. The insights and data presented here are not just statistics; they're a loud call to action. 

This year, the potential of AI to revolutionise industries and redefine success is more palpable than ever. Yet, it's the companies that move beyond mere interest in AI to a thoughtful, strategic application that will lead the charge into a future full of possibility.

You have the opportunity to be at the forefront of this change. There aren’t many times in a career where this happens.

 

 

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