While returns may take time, the importance of being an early mover in AI implementation cannot be overstated.
Our 5th annual U.S. CEO Outlook, based on a survey of 400 U.S. CEOs across all major industries and conversations with a dozen leading CEOs, offers deep insights into the major forces impacting today’s business landscape, and how CEOs are managing the challenges. “Agile or irrelevant: Redefining resilience,” our 2019 U.S. CEO Outlook report, indicates that the majority of CEOs surveyed believe the ability to be agile and build a resilient organization are critical to remaining relevant as the speed of change accelerates. Our blog series provides perspective and insight from a wide range of KPMG leaders on these findings.
In building a resilient organization, technology is a double whammy: it is a top driver of disruption and a top risk. No wonder then that technology is a big part of today’s CEOs’ agendas, with 89 percent feeling personally responsible for leading technology strategies in their organizations.
Artificial intelligence (AI) is one of the most promising emerging technologies, with an impact on the organization and on the decision making by the CEO personally. This year the CEOs’ thinking about AI has yielded some seemingly contradictory findings—CEOs do not seem to believe that their companies have made that much progress in terms of AI implementation since last year, and they do not expect AI projects to yield results as fast as they did in 2018. At the same time, however, they are now more likely to use AI in their decision making.
These results illustrate the increased complexity and scope of AI implementations, and not that progress is stalling. The majority of companies are somewhere in the middle of their AI implementation journey. As they complete initial use cases, they are identifying additional areas that AI can impact. They are not moving slower but expanding the uses of AI.
And while the returns may take time, the value in terms of being able to streamline or automate your business, or derive insights that you didn’t have before or create entirely new business models means that AI is worth the wait.
William Amelio, CEO of Avnet, recognized the need to transform the company’s business model from a technology distributor to a technology solutions provider to support projects leveraging Internet of Things and AI. “Today,” he says, “we are able to guide our customers from idea through prototyping to finished product faster with less cost and complexity.”
In effect, what is being revealed during the implementation is that becoming truly AI-enabled is a multi-step process, which involves technology, data, rethinking business processes and workforce elements, as well as all the risk and compliance issues. AI is not something you buy and install.
Companies are creating and utilizing data-driven insights in key areas, starting with the experimentation and the prototyping before proceeding to a repeatable value stage. This third stage is about integrating AI into operations, much like a technology application, with AI running within a system. It is only at this stage that companies can start to think holistically about enterprise transformation.
While it is understandable that as AI implementations grow in scope their deadlines and returns are getting extended, the importance of being an early mover cannot be overstated. Early movers who implement AI proactively are going to be in a much better position to expand their business, and thereby create jobs.
Ultimately, technology resilience needs to be viewed in a broad, societal context. As Satya Nadella, CEO, Microsoft reminds us in the 2019 Microsoft Annual Report, “We are living at a crucial time in history where the impact of technology on every part of our daily life and work and every aspect of our society and economy is more acute than ever before. What the world needs is technology that benefits people and society more broadly and is trusted.”
For further insights and data from leading U.S. CEOs and KPMG leaders, download the entire “Agile or irrelevant: Redefining resilience” U.S. CEO Outlook report here.