Most companies lack the infrastructure for artificial intelligence

There is a direct correlation between digital readiness and AI readiness. However, few companies are well ahead in either area, McKinsey study asserts.
Written by Joe McKendrick, Contributing Writer

If your company has been proactive about its digital investments and strategy in recent years, you have a much better chance of succeeding with artificial intelligence as well.

Photo: NASA Office of the CIO

That's the word from McKinsey analysts Jacques Bughin and Nicolas van Zeebroeck, who recently surveyed executives on their AI challenges. Their conclusion: it takes technology to make technology, especially when it comes to something as sophisticated as AI. "It appears that AI adopters can't flourish without a solid base of core and advanced digital technologies," they observe. "Companies that can assemble this bundle of capabilities are starting to pull away from the pack and will probably be AI's ultimate winners."

What technologies make the entree into AI easier? These are the new-wave technologies that have been in the spotlight in recent years: cloud computing, mobile, web, big data and advanced analytics. "Companies with a strong base in these core areas were statistically more likely to have adopted each of the AI tools--about 30 percent more likely," Bughin and Zeebroeck write.

The overall lack of a "digital substructure may be slowing the diffusion of AI," they observe, estimating that one in three companies were ahead of the pack in terms of adoption of digital technologies. Because many companies are still behind with cloud and advanced analtyics, they are not good candidates for a successful AI effort -- the McKinsey team estamates that AI may be out of reach for at least one-fifth of the companies they looked at.

Still, Bughin and Zeebroeck caution that these are still the early days of AI, as well as the underlying digital itself. They estimate that about 35 percent of companies are either implementing or piloting AI. Still the impact on markets is already being felt. The disruptive and more efficient business models within this segment may already be "depressing industry margins." At the same time, these early AI adopters are already moving onto the second wave of AI, which will likely keep them ahead of their competitors for some time to come.

Their advice to get in the AI game? Start thinking digitally. "Companies with a less favorable digital foundation will need to line up new talent and rev up their digital-transformation efforts."

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