Will artificial intelligence be essential to competitiveness?
Artificial intelligence will have a dramatic impact on business by 2020, according to study released this week by IT services, consulting and business solutions provider Tata Consultancy Services (TCS).
The firm's study, "Getting Smarter by the Day: How AI is Elevating the Performance of Global Companies," shows that 84 percent of the 835 executives TCS surveyed from North America, Europe, Asia-Pacific and Latin America said their companies see the use of AI as "essential" to competitiveness.
Half of the respondents see the technology as being "transformative" and say it will be important or highly important to remaining competitive in 2020.
The report shows that the use of AI is spreading across almost all areas of companies. The biggest adopters of the technology today are IT departments, with about two-thirds of the survey respondents using AI to detect security intrusions, user issues and deliver automation.
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By 2020, however, nearly one third (32 percent) of companies think AI's greatest impact will be in sales, marketing or customer service, while one in five (20 percent) see AI's impact being biggest in non-customer facing corporate functions such as finance, strategic planning, corporate development, and human resources.
The companies surveyed are from a range of industries, including automotive, banking and financial services, energy, healthcare, life sciences, industrial manufacturing, and retail.
Examples of how AI is being used by companies include guiding customer service representatives to more quickly resolve customer problems and anticipate future purchases; quickly and securely reconciling mass overnight transactions for financial institutions; and saving human resources professionals time by enhancing the on-boarding processes for new hires.
As for the debate regarding AI's impact on jobs, business executives surveyed estimated net reductions in each function by 2020 of between 4- and 7 percent. But companies with the biggest revenue and cost improvements from AI see the need for at least three times as many new jobs in each function by 2020--because of AI--as compared with companies with the smallest AI-related revenue and cost improvements.
AI is already being used to automate certain processes and create efficiencies; help employees to be more productive and devote more time to more strategic business needs; and create new work and services that were not possible in the past, according to the study.
"As companies begin to gain a better understanding of AI's application for business, they will realize the significant impact of this transformative force," said K. Ananth Krishnan, CTO of TCS. "This is reflected in our [study], which shows that forward-thinking companies are beginning to make major AI investments. Given the increasing digital disruption across every industry and the public sector, AI should become a key and integrated component of an organization's strategy."
As AI becomes a mainstream technology, investments in the technology are expected to rise, TCS said. The study showed a clear correlation between investments in AI and business impact. The companies that have realized the greatest AI-related revenue improvements and cost reductions spent five times more on the technology than the companies with the lowest AI-related revenue and cost improvements.