Article Synopsis :
This survey looks into how big data and artificial intelligence (AI) are accelerating business transformation – and whether, in fact, they are
Investment is on the rise
Almost all of the leading businesses (91.6%) are increasing their investment in the space so they may become more agile. Slightly more (91.7%) say the investment is needed for them to become agile and competitive businesses, while almost four in every five (87.8%) say the need to invest is urgent. Three quarters (75%) of them fear disruption from data-driven digital competitors.
More than half (55%) of firms are investing in excess of $50 million, but many companies say they are not seeing the results they would expect from this outlay. Under two thirds (62.2%) are getting measurable results from their big data and AI investments, while fewer than half compete on data and analytics (47.6%), have created a data-driven organization (31.0%), or forged a data culture (28.3%).
Culture is the constant spanner in the works
These failings have significant implications for insurance businesses, and the largest obstacle remains the challenges presented by corporate culture.
Almost four-fifths of companies (77.1%) say that the adoption of big data and AI initiatives remain major challenges.
Organisational alignment, agility and resistance are all offered by executives as reasons for a lack of progress, but in 95% of cases, the reasons are cultural challenges – ie people and process – with technology only attributed to 5% of the problem.
Mixed reviews for the role of CDOs
While the role of the chief data officer role has evolved, it remains ill-defined. More than two-thirds of companies surveyed said their CDO was ill-equipped to address the challenges they face.
There is no consensus about who should be leading the transformation process, either, with 38.2% favouring an external agent, while 32.4% prefer a company insider. Almost half (48.1%) believe CDOs should have the primary responsibility for data, though almost one third (28.4%) do not see a single role that should be accountable. Almost a fifth (17.5%) do not even consider a CDO role as necessary or any more than an interim role.
No overnight success stories
Big data and AI must be seen as a long term play. Few companies – 31% identified themselves as such – are now data driven and the vast majority won’t become so overnight. And this number has fallen from 37.1% in 2017 and 32.4% in 2018.
The highlights suggest that the industry is heading in the wrong direction. But there is an awful lot more meat on the subjects of investment, results and leadership in the full executive summary.
It certainly makes for an interesting read.
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Digital Insurer's CommentsThis paper takes a timely look at how North American businesses are investing in their big data and AI capabilities. It makes for interesting, if worrying, reading.
There remain a number of structural problems that businesses have not yet successfully tackled, the largest – and most intractable – being an unsuitable corporate culture to allow projects to develop.
If the culture is killing their transformation programmes, then the increased spend will all be for nothing.
It is essential that businesses look to change their culture to one which will not only encourage, but nurture the changes that will transform the business. Or else, they will fail.
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