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Businesses should ‘follow the money’ when adopting AI

The MGI report on AI discussed the difference in AI investment and adoption, with investment in AI technologies experiencing a threefold external investment growth since 2013. Compared to that figure, 41 per cent of firms told MGI that they are uncertain about the benefits, and within that 20 per cent of adopters, 10 per cent are adopters of three or more AI-backed technologies.

A new report from Harvard Business Review on the two major business potentials of AI said that while this may be the trend on average, “senior executives know that AI isn’t just hype.”

HBR attributes some of the hesitancy to adoption to business leaders not being sure where they should be applying AI, and after McKinsey researchers Michael Chui, Nicolaus Henke and Mehdi Miremadi took a closer look at 400 AI use cases from 19 different industries, and nine business functions, they found that the question of where to put AI to work in a business is a matter of playing “follow the money.”

“The business areas that traditionally provide the most value to companies tend to be the areas where AI can have the biggest impact,” the report explains.

The two areas that HBR found to the implementation of AI to have the biggest impact are: supply-chain management/manufacturing and marketing and sales.

Chui, Henke and Miremad also found that another way for businesses to find an area to introduce AI is “to simply look at the functions that are already taking advantage of traditional analytics techniques.” Meaning that business leaders should look to apply AI to parts of the company where neural network techniques could provide a higher performance, or “generate additional insights and applications.”

According to the MGI report, companies that have a low AI adoption rate are in the education, health care, and travel/ tourism sectors.

In a previous Digital Journal article on how hospitality brands can undergo digital transformation, it was stressed that “hospitality brands can use new technologies to make their businesses hyper guest-focused.” Utilizing AI for marketing and sales purposes is just one way of making that happen.

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