Tata Consultancy Study: Enterprises and Artificial Intelligence
As the latest Tata Consultancy study shows, 84 percent of companies worldwide consider artificial intelligence (AI) to be essential for their competitiveness. 50 percent attribute significant transformational power to the technology. But how smart and agile are European companies today?
Tata Consultancy Services, a leading provider of global IT services, consulting and business solutions, recently published a study called "Getting Smarter by the Day: How AI is Elevating the Performance of Global Companies". The study surveyed 835 executives in companies with average annual revenues of $20 billion across a range of industries in 13 countries, including Switzerland, on the current and future impact of AI.
AI in IT departments
According to the executives surveyed, AI is impacting nearly every area of the business. Unsurprisingly, IT departments are the main users of AI today, with more than two-thirds (68 percent) of respondents using the technology to detect security vulnerabilities, solve user problems or automate routine processes. However, 70 percent of respondents expect AI to have the greatest impact outside the IT department by 2020.
AI in customer service
Almost one-third (32 percent) see the greatest impact of AI in 2020 in sales, marketing and customer service. One in five respondents (20 percent) see the greatest impact in areas of the business that do not have customer contact. These include strategic planning, corporate development, finance and human resources.
Customer service representatives can resolve issues faster and anticipate future purchases, financial services companies can quickly and securely reconcile mass transactions overnight, and human resources staff don't have to worry about the time-consuming onboarding process for new employees.
Automations
Survey participants estimate that the bottom line is that between four and seven percent of jobs will be eliminated by 2020, depending on the business sector. However, companies with the greatest financial benefits from AI expect to create three times as many new jobs by 2020 compared to companies with the least improvement in revenue or costs from AI.
Artificial intelligence is already being used to automate certain processes and increase efficiency, helping employees to be more productive and freeing up more time for strategic tasks. In addition, AI is creating new activities and services that were not possible before.
AI investments and revenues on the rise - especially in North America and Europe
The more AI becomes a mainstream technology, the higher the investments. Around seven percent of the companies surveyed have earmarked at least 250 million US dollars for AI in 2016, and two percent even want to spend one billion US dollars by 2020 - and benefit from a possible competitive advantage as early adopters. That's because the TCS Trends Study shows a clear correlation between investments and business benefits. Companies with the greatest revenue increases and cost reductions through AI have invested five times more in the technology than companies with the least improvements through AI.
Leading companies increased their revenues by an average of 16 percent in 2015 compared to the previous year through AI initiatives. Laggards, on the other hand, saw revenues increase by only five percent. North American companies invested the most in AI, with an average of $80 million. Companies in Europe invested an average of $73 million, Asia Pacific $55 million, and Latin America $51 million.
For more information and the full results of the study, "How AI is Elevating the Performance of Global Companies." are online on the TCS website available.
