Daemon commissioned independent market research agency Vanson Bourne to conduct a study examining how businesses were navigating the digital transformation landscape. 150 senior business decision makers from the UK were surveyed, spanning a range of sectors, including financial services, retail, distribution & transport and energy, oil/gas & utilities.
In a new report titled ‘Is AI a craze or crucial: What are businesses really doing about AI?”, the results show that contrary to traditional technology investments that normally require extensive evidence on the return on investment (ROI) and procurement processes, AI investment has increased 48% since 2021, so businesses do not fall behind competitors. Continuing to emphasise Digital Transformation as a strategic imperative for all businesses, with AI as its latest key tenet, regardless of size or sector.
This all suggests that AI has upended typical approaches to technology investments. The appetite for AI and ML appears to be, at least partially, driven by decision makers’ fear of missing out (“FOMO”) to competitors by not adopting new technologies.
What sectors would benefit from AI?
Our research results show that 99% of organisations are looking to use AI or ML to seize new opportunities. Appetite is particularly strong in the retail, distribution and transport sector, where 97% of organisations report either ‘some’ or ‘significant’ adoption of AI, compared to 91% of organisations in financial services.
Almost all organisations (98%) have some vision for the use of AI, and many are already working on using AI to support analytics (60%), automation (51%) and personalisation(40%). Additionally, organisations are planning to implement AI to support with other business capabilities in less than six months including chatbots (32%), and real-time optimisation (40%). Forecasting and smart control systems are the least implemented use cases, although both are likely to be harnessed within the next 1-2 years.
Ian Ray, Head of Data, ML, AI, comments: “It’s clear organisations see the potential value of AI and are working quickly to implement this technology to yield an array of benefits. To maximise the business impact of their investments in digital, organisations need to ensure AI is a strategic enabler as part of their broader digital transformation approach.”
Addressing AI concerns
Despite 98% of organisations having some vision for the use of AI, 49% of senior decision makers have low confidence in implementing AI/ML. So, while there may be a vision, it’s apparent this doesn’t align with the technology and change management deemed possible right now.
Smaller organisations are broadly more confident in implementing AI, particularly in areas such as personalisation and intelligent document processing. However, this low confidence could be driven by the challenges that larger organisations face. Despite greater resource and capacity, they are likely to experience greater security threats than small organisations.
Concerns around data security and privacy has emerged as the top driver of low confidence among organisations, followed by difficulties of finding a trusted vendor to work with (31%), as well as legacy technology holding organisations back (29%) and a perceived low skill level within the business (24%).
However, the data shows that organisations are pressing ahead with implementation to reap the benefits of AI/ML in the next 12 months. This ranges from from increasing IT resource/reducing skills gaps (33%), evolving the customer experience (29%) and moving away from legacy systems (28%).
Enabling organisations to tap into AI’s potential
It’s clear that while organisations can see the potential of AI and ML, they currently do not fully understand what it can do for their organisation. In fact, 97% of organisations agree that when they undertake transformation programmes, they could have a better understanding of what it is they need to solve.
Over the past two years, more organisations (43%) have called for strategic support with the issues they are trying to resolve – up from 19% in 2021. Pressure from customers is cited as the most common trigger for hiring a digital transformation consultancy, increasing by 17% points over the past two years.
Ray continues: “Undertaking digital transformation efforts is no small task when businesses are being squeezed by turbulent economic pressure, smaller budgets, changing consumer needs, and the rapid evolution in the application of new technologies such as AI. In this context, organisations will not achieve their goals with a one-time “digital transformation”. There is a requirement for organisations to set out a strategic route to maximise business impact from their digital initiatives, but also be prepared to adjust that route and the associated digital investment priorities overtime considering business strategic direction, external trends and insights, and the customers’ perspective.”