Artificial intelligence (AI) and big data aren’t just something quants and scientists can love. CEOs, CFOs, and everyone else is also taking a shine to these technology developments as well. They see it as their best hedge against those pesty disruptive competitors that keep shaking up their markets.
However, most executives – and their organizations – aren’t ready or capable of taking full advantage of AI and big data yet. This is a shame because the “big data” side of the equation has been around for more than a decade at this point. The technology exists and is affordable, but many organizations have been slow to adopt and adapt their corporate cultures to embrace data-driven decision-making. In fact, the number of organizations that are data-driven has been declining in recent years.
The embrace of, and lag in data-driven, AI-driven decision-making is highlighted in a recent survey from NewVantage Partners, which took a close look at the emerging business side of AI in 65 large corporations, primarily financial services. Companies “have come to increasingly recognize that they must become more adept at leveraging their data assets if they are to compete successfully against highly-agile data-driven competitors,” the survey’s authors state.
Overall, there has been a steady increase in investments in AI and machine learning, the survey, which has been conducted annually from 2017 through 2019, shows. Currently, 96 percent report investing in AI, up from 69 percent just two years ago. Executives also identified AI and machine learning as the most disruptive of emerging
technologies when looking out across the coming decade – 80 percent of executives named it the most prominent disrupter.
Fear of disruption is what’s nudging executives to embrace AI. Seventy-five percent cite fear of disruption from data-driven digital competitors, and 92 percent are saying investment is required to transform into agile and competitive businesses.
The challenge is most companies are still not data-driven, and likely won’t be anytime soon, the survey finds. Worse yet, the percentage of data-driven companies is declining. Only 31 percent of companies say they are data-driven. This number has declined from 37 percent in 2017 and 32 percent in 2018.
That’s because cultural challenges remain the biggest obstacle to business adoption, the NewVantage authors state. Seventy-seven percent of companies report that business adoption of big data and AI initiatives remains a major
challenge. Executives cite multiple factors (organizational alignment, agility, resistance), with 95 percent stemming from cultural challenges (people and process), and only five percent relating to technology.
“One could argue that the glass remains half full – that progress has been slow, and that many companies still lack the commitment to data-driven organizational processes and cultures,” Thomas Davenport and Randy Bean state in the foreword of the report. “It is particularly striking that 77 percent of respondents say that business adoption of big data and AI initiatives continues to represent a challenge for their organizations. This issue, and the low percentage of companies that have achieved data-driven organizations and cultures, suggests the need for a new focus.”
At the same time, “the great majority of spending on big data and AI goes for technology and its development,” Davenport and Bean state. “We hear little about initiatives devoted to changing human attitudes and behaviors around data. Unless the focus shifts to these types of activities, we are likely to see the same problem areas in the future that we’ve observed year after year in this survey.”
originally posted on Forbes.com by Joe McKendrick
