More AI investment – but with what return?


More AI investment – but with what return?

Experts predict that more companies will be investing in AI in the post-pandemic economy. The burgeoning field promises to make businesses more efficient in the future, and many hope it can make up for efficiency lost due to downsizing and remote working.

But one study showed that, across over a thousand organisations, most AI projects aren’t earning their keep: on average, return on investment was only 1.3%.

Why? AI projects take time and expertise to implement, particularly at large scale, and most aren’t established enough to deliver the promised benefits at scale. At their full potential, they can foster the kind of flexibility and quick decision-making needed in the post-pandemic economy, but achieving that potential takes specific skills and processes.

On top of that, AI tools have a learning curve. They have to learn how to handle the specific inputs a given company feeds them, and the humans in the equation have to learn how to effectively use them. Most companies are still very new to these technologies. Data shows that ROI tends to rise once AI is adopted throughout an organisation, but in many cases, that takes over a year, and it’s several months more before profits grow significantly.

Another factor is where and how AI is implemented. Businesses that use AI to assist in data-forward, big-picture processes--such as strategic planning and supply chain management--see much higher ROI, and many businesses that started out using AI tech for automation of internal and customer interfaces end up repurposing the tools.

Finally, it’s essential for the data sets that AI will be using to be prepared properly to avoid snags in future operations. Today’s machine learning algorithms can only learn in specific ways, and again, human expertise is essential to make them function smoothly.

AI remains likely to be a major driver of innovation in the business world of tomorrow. But to get a jump on the trend, organisations will have to implement it effectively and strategically. Make sure your company’s AI investments live up to the possibilities.

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