There has not been an increase in the adoption of artificial intelligence but some companies are capturing value from the frontier technology at the enterprise level and many are generating revenue and reducing costs at least at the function level, says McKinsey & Company.
According to the results of this year’s McKinsey Global Survey on AI, half of the respondents said their organizations have adopted the technology in at least one function.
The online survey was in the field from June 9 to June 19 and collected responses from 2,395 participants who represented the full range of regions, industries, company sizes, functional specialties, and tenures, the global consulting firm explained.
“While AI adoption was about equal across regions last year, this year’s respondents working for companies with headquarters in Latin American countries and other developing countries are much less likely than those elsewhere to report that their companies have embedded AI into a process or product in at least one function or business unit,” it added.
By industry, respondents in the high-tech and telecom sectors are the most likely to report AI adoption, the report said. The automotive and assembly sector, which shared the lead last year, are falling just behind them.
The survey shows that service operations, product or service development, and marketing and sales took the top spots in terms of the business functions in which organizations adopt AI.
“Within these functions, the largest shares of respondents report revenue increases for inventory and parts optimization, pricing and promotion, customer-service analytics, and sales and demand forecasting,” McKinsey noted, adding that over two-thirds of respondents who report adopting each of those use cases say its adoption increased revenue.
Optimization of talent management, contact-center automation, and warehouse automation are the use cases that most commonly led to cost decreases, the survey revealed. “Over half of respondents who report adopting each of those say the use of AI in those areas reduced costs.”
Some companies using AI, according to McKinsey, are seeing that value accrue to the enterprise level. “A small contingent of respondents coming from a variety of industries attribute 20 percent or more of their organizations’ earnings before interest and taxes (EBIT) to AI. These companies plan to invest even more in AI in response to the COVID-19 pandemic and its acceleration of all things digital.”
The consulting firm says this could create a wider divide between AI leaders and the majority of companies who are still struggling to invest in the technology.
The companies seeing the most value from their use of AI engage in several practices and report several strengths that set them apart from other respondents, including better overall performance, better overall leadership, and resource commitment to AI.
“The survey findings suggest that a minority of companies recognize many of the risks of AI use, and fewer are working to reduce the risks—as was true in 2019,” McKinsey wrote, adding that cybersecurity remains the only risk considered relevant by a majority of respondents.