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Reshaping Business With Artificial Intelligence

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Article Synopsis :

Expectations for artificial intelligence (AI) are sky-high, but what are businesses actually doing now?

 The Digital Insurer reviews MIT Sloan’s Report on Reshaping Business With Artificial Intelligence

While 85% of companies believe AI will help them create competitive advantage, only 39% have an AI strategy in place 

“Reshaping Business With Artificial Intelligence” from MIT Sloan Management Review and BCG presents a baseline comparing corporate AI ambitions and efforts. Findings are based on a survey of more than 3,000 business executives, managers, and analysts from organizations around the world. Key findings include:

  • The gap between ambition and execution is large at most companies
  • Three-quarters of executives believe AI will enable their companies to move into new businesses and almost 85% believe AI will allow their companies to obtain or sustain a competitive advantage. But only about one in five companies has incorporated AI in a specific offering or process, and only one in twenty companies has incorporated AI extensively across offerings and/or processes
  • Less than 39% of all companies have an AI strategy in place
  • The largest companies — those with at least 100,000 employees — are the most likely to have an AI strategy, but only half have one

What functional areas will most likely be impacted by AI?  See below:

Combining survey responses to questions around AI understanding and adoption, four distinct organizational maturity clusters emerge:

  1. Pioneers (19%): Organizations that both understand and have adopted AI. These organizations are on the leading edge of incorporating AI into both their organization’s offerings and internal processes.
  2. Investigators (32%): Organizations that understand AI but are not deploying it beyond the pilot stage. Their investigation into AI emphasizes looking before leaping.
  3. Experimenters (13%): Organizations that are piloting or adopting AI without deep understanding. These organizations are learning by doing.
  4. Passives (36%): Organizations with no adoption or much understanding of AI.

Beyond the obvious complexities of AI technology, management challenges identified and discussed include:

  • The development of an intuitive understanding of AI: Executives and other managers need at least a basic understanding of AI
  • Organizing for AI: Adopting AI broadly across the enterprise will likely place a premium on soft skills and organizational flexibility enabling new forms of collaboration, including project teams composed of humans and machines
  • Re-thinking the competitive landscape: More than 60% of respondents say that a strategy for Al is urgent for their organizations, but only half of those say their organizations have a strategy in place

The report includes interesting discussions around the future of work, shifting value creation, and building competitive advantage. An appendix discussion focuses on AI in the longer term.

Link to Full Article:: click here

Digital Insurer's Comments

In our view, it’s a mistake to view AI in terms of job elimination and cost reduction, which is the tendency of most insurers—especially in a sustained low-interest rate environment. Increased AI usage will create new needs as it meets current needs.

The job of an insurance underwriter, for example, tops many “most endangered species” lists. However, AI simultaneously expands the universe of insurable events. As James Platt, chief operating officer of Aon Risk Solutions, says in this report, “Many things that people would like to insure themselves against, such as brand and reputational risks or wider cybersecurity coverage, are ‘uninsurable’ today. There is simply no one offering an insurance option.” As new AI-enabled methods of assessing risks come online, carriers (and underwriters) can start offering such new services.

Link to Source:: click here

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