AI Is Now Mature Enough to Drive Revenue GrowthAI Is Now Mature Enough to Drive Revenue Growth
Some companies have made a breakthrough in using artificial intelligence to spur innovation and growth, not just for cost savings. Their advanced AI maturity has five success factors.
August 22, 2022
Many technology leaders associate artificial intelligence primarily with making processes more efficient. New research from Accenture shows that those who do so severely underestimate the technology's role in generating business value. Having analyzed the performance of 1,200 companies across 16 industries and 15 countries, we found that a small group of organizations (12%) outperforms their peers on AI and, as a result, enjoys 50% greater revenue growth.
These AI achievers have reached a much higher level of AI maturity than others. They master a set of AI capabilities in the right combination, including the technology (data, AI, and cloud), organizational strategy, responsible AI, C-suite sponsorship, talent, and culture. Essentially, AI achievers have moved beyond “pilot-it-is” -- a common occurrence where the perfection of a product or tool becomes detrimental to scaling technology – into integrating AI across their businesses.
For example, to harness AI for their growth initiatives, a major retail pharmacy built about 100 high-value AI products that create detailed customer profiles and help the company better optimize inventory and prices. The company has been committed to its data- and AI-led transformation since 2020 with no intention to slow down anytime soon.
On the other end of the spectrum are AI experimenters. This group accounts for the majority (63%) of companies. It includes industries heavy with legacy technology, such as banks, which will likely take only small steps toward AI maturity. For instance, we expect only 11% of the health care and insurance industries and 12% of the financial sector to reach achiever status by 2024, compared to 50% of the technology sector in the same time frame.
Experimenters wanting to advance their AI maturity should take a page from the achievers' book, which contains five success factors:
1. Deliberately create a culture of innovation: Championing AI starts with leaders that empower their teams to innovate. Consequently, four in five achievers have CEO and senior sponsorship, compared to 56% of experimenters. Emboldened by leadership, a global digital platform is disrupting construction by harnessing AI and generative design to create autonomous buildings that fit together like pieces of a Lego set.
2. Invest heavily in talent and skills training: Hiring professionals with data and AI skills remains challenging, which is why incorporating AI into the workplace requires investing in reskilling and training to produce better AI literacy across teams. “Gamified” training has proved successful in achieving these goals. A major US. utility firm emphasized upskilling to transition their maintenance employees into quantitative engineers. One such employee then used his training to write predictive software that saved the company $1 million on equipment maintenance.
3. Create an AI core that integrates AI across all functions: Companies need infrastructure in place to transform ideas into products. Creating an AI core -- an operational data and AI platform that taps into companies’ talent, technology, and data ecosystem -- helps balance experimentation with execution. A European energy company developed a digital factory that trained its field engineers to work with and improve machine learning models. The investment shortened the build time for AI-powered apps from 18 months to five months, boosting the company's annual bottom line by $1.5 billion within the next three years.
4. Design responsibly, from the start: With more technology comes more responsibility. Designing, developing, and deploying AI with good intentions is a must. Companies that successfully apply responsible AI can empower and build trust with employees, businesses, and customers. A central bank partnered with the financial industry to produce the first practical methodology and toolkit with detailed guidance on using AI to leverage the fair, ethical, accountable, and transparent (FEAT) principles.
5. Remember there is no finish line: To avoid being left behind, most companies need to increase their spending on AI aggressively. Achievers get more out of AI simply because they invest more in it. We found that in 2018, achievers devoted 14% of their total technology budgets to AI, while in 2021, they devoted 28%. In 2024, they expect to devote 34%. Achievers also understand that their AI investment journey does not have a finish line. They frequently note, there is no “peak AI.”
Investments in AI are rising across the patch. Nearly half (49%) of all analyzed companies will invest more than 30% of their technology budgets in AI by 2024, up from 19% in 2021. That makes it every technology leader's responsibility to ensure these funds will advance their organization's AI maturity. Technology is transforming every part of a business, sometimes leading to total enterprise reinvention. AI will play a key role, and technology leaders can no longer limit it to making a company more efficient. They must harness AI as a lever for growth and innovation.
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