Tag: #TATA #AI #Study #tcs

TCS Global Trend Study on AI Reveals Industry Wide Investment by 2020 #AI

Tata Consultancy Services, a leading global IT services, consulting and business solutions organization, today unveiled the industry findings of its Global Trend Study titled, “Getting Smarter by the Sector: How 13 Industries Use Artificial Intelligence.” Focusing on the current and future impact of Artificial Intelligence (AI), the study polled 835 executives across 13 global industry sectors in four regions of the world, revealing that they all identified artificial intelligence as increasingly important to their strategic competitiveness by 2020.

Disrupted Industries like Travel, Hospitality and Telecom Making Boldest Investments in Artificial Intelligence

 Consumer Packaged Goods, Utilities and Insurance Outpace Other Industries in AI Investment as a Percentage of Company Revenue 

According to the study, 80% of executives in all 13 industries currently invest in AI and almost 100% plan to invest by 2020.  The insurance industry outspent the other twelve verticals surveyed, investing on average $124 million in AI systems, compared to a cross-industry average of $70 million. Consumer packaged goods reported the second most significant spend at $95 million.

 

 

Looking ahead to 2020, AI continues to be seen as a long term strategic bet, with ten of the 13 industries planning to increase their investments in AI. The increases are most dramatic among industries with the lowest current investment levels, including the travel, transport and hospitality industry, which plans to increase its spend by 750%, from $4 million in 2015 to $34 million to 2020. This is followed by rises in media, entertainment and information services (292%), industrial manufacturing (74%), healthcare (44%), and banking and finance (29%).

 

“The second phase of our Global Trend Study highlights that all industries see AI technology as a major game-changer on their business competitiveness by 2020,” said K. Ananth Krishnan, Chief Technology Officer of TCS. “It’s striking that the sectors making the boldest current or future AI investments and citing the most significant results seem to group around industries like insurance, travel, hospitality, and telecom, where disruption is having a major impact, and consumer-focused sectors such as the consumer-packaged goods industry, where the customer experience can be significantly enhanced by AI innovation.”

 

AI Investments as a Percentage of Revenue and ROI

The leading investors in AI, determined as a percentage of average company revenue, were the consumer-packaged goods (CPG) industry (0.66%), followed by utilities (0.53%), insurance (0.52%) and telecommunications (0.39%). Companies reported that their AI initiatives had a strong positive impact on both revenue improvement and cost reduction in the specific business areas where they invested in artificial intelligence. The average revenue increase across all 13 industries was 17%, while the average cost reduction was 12%. Telecom companies generated the most value from AI investments in 2015, in terms of revenue improvement (average 25%) and cost reductions (average 20%).

 

AI used in the IT function most frequently

The most frequently mentioned business function using AI was perhaps unsurprisingly in IT, with high-tech and utilities companies more frequently using cognitive technology in their IT operations than the 11 other industry sectors. Across all 13 industries studied, only 29% of companies are using AI in sales today. However, more than half the CPG companies (52%) and nearly half the retailers (49%) are using AI tools to improve sales performance.

 

Potential headwinds to AI adoption

Effectively managing the security risk of AI systems is of paramount importance for the majority of industries, with companies in the automotive, banking and financial services, CPG, technology, industrial manufacturing, and telecoms industries all stating this as the number one success factor to derive real value from AI. Moreover, all industry sectors cited the importance of getting managers and employees to trust the advice provided by AI systems, and getting employees to learn about and adopt the new processes and systems that AI requires.

In almost all sectors, addressing people’s fears about losing their jobs was not ranked as a major barrier. This was underlined in phase one of the Global Trend Study released in March this year, which found companies with the biggest revenue and cost improvements from AI see the need for at least three times as many new jobs in each function by 2020 because of cognitive computing innovations.

Artificial Intelligence to Have Dramatic Impact on Business by 2020. #AI #TCS

Artificial Intelligence to Have Dramatic Impact on Business by 2020, According to Tata Consultancy Services Global Trend Study

  • Majority of Companies see AI as Essential to Competitiveness, Consider it Transformative and View the Technology as Important or Highly Important to Remaining Competitive in 2020
  • 68% of Companies use AI for IT Functions, but 70% Believe AI’s Greatest Impact by 2020 Will be in Functions Outside of IT such as Marketing, Customer Service, Finance, and HR
  • Companies with the Greatest Financial Improvements from AI Investments Expect Three Times as Many New AI-Related Roles by 2020 as Compared to Companies With Smallest Improvements

 

Tata Consultancy Services a leading global IT services, consulting and business solutions organization, today unveiled its Global Trend Study titled, “Getting Smarter by the Day: How AI is Elevating the Performance of Global Companies.” Focused on the current and future impact of Artificial Intelligence (AI), the study polled 835 executives across 13 global industry sectors in four regions of the world, finding that 84% of companies see the use of AI as “essential” to competitiveness, with a further 50% seeing the technology as “transformative.”

 

Widespread AI adoption expected across job functions

Exploring the views and actions of decision makers from global companies with average revenues of $20 billion, the study revealed AI is spreading across almost all areas of a company. The biggest adopters of AI today are, not surprisingly, IT departments, with two-thirds (67%) of survey respondents using AI to detect security intrusions, user issues and deliver automation. However, by 2020, almost a third (32%) of companies believe AI’s greatest impact will be in sales, marketing or customer service, while one in five (20%) see AI’s impact being largest in non-customer facing corporate functions, including finance, strategic planning, corporate development, and HR.

 

Companies participated from a range of industries, including automotive, banking and financial services, energy, healthcare, life sciences, industrial manufacturing, and retail. This cross-sector level of insight highlighted AI’s workplace impact as an important supplemental force for the next few years. Examples include guiding customer service representatives to more quickly resolve customer problems and anticipate future purchases, quickly and securely reconciling mass overnight transactions for financial institutions, or giving time back to HR professionals by managing the time consuming on-boarding processes for new hires.

 

 

As for the ongoing debate regarding AI’s impact on jobs, business executives in the study estimated net reductions in each function by 2020 of between 4% and 7%. However, companies with the biggest revenue and cost improvements from AI see the need for at least three times as many new jobs in each function by 2020 because of AI, as compared to companies with the smallest AI-related revenue and cost improvements. AI is already being used to automate certain processes and drive efficiencies, help employees be more productive and devote more time to more strategic business needs, and create new work and services that were not possible in the past.

 

“As companies begin to gain a better understanding of AI’s application for business, they will realize the significant impact of this transformative force. This is reflected in our Global Trend Study, which shows that forward-thinking companies are beginning to make major AI investments,” said K Ananth Krishnan, Chief Technology Officer of TCS. “Given the increasing digital disruption across every industry and the public sector, AI should become a key and integrated component of an organization’s strategy.”

 

AI investments and returns rising; North America and Europe lead the charge

As AI becomes a mainstream technology, financial investments in AI are set to rise, as 7% of companies each earmarked at least $250 million toward AI in 2016 and 2% already plan to invest more than $1 billion by 2020 – likely looking to gain a competitive advantage as early adopters.

 

The Global Trend Study revealed a clear correlation between investments in AI and business impact. The companies that realized the greatest AI-related revenue improvements and cost reductions spent five times more on the technology than the companies with the lowest AI-related revenue and cost improvements. In turn, leaders generated average revenue increases of 16% from AI initiatives in 2015 versus 2014, whereas laggards saw a modest 5% revenue growth. At a regional level, North American companies were the leading investors in AI in 2015, with an average per-company spend of $80 million, followed by Europe with $73 million, Asia-Pacific with $55 million and Latin America with $51 million.

 

Cyber security top of mind when adopting AI

Executives participating in the Global Trend Study across all regions and sectors rated the top four factors as most important to AI gaining widespread acceptance and driving business benefits. Almost seven out of 10 (68%) companies currently use AI to detect and prevent potential hacks and security threats to their systems. And moving forward, the other key factors include developing cognitive systems that continually learn, have the ability to make reliable and safe decisions based on masses of data, and gain the confidence of managers to trust what AI is advising them to do.

 

About The 2016 Global Trends Study

The seventh annual Global Trends Study from TCS surveyed 835 leading executives from companies in four global regions, with an individual mean annual turnover of $20bn. The four regions surveyed were North America (including Canada), Europe (UK, Germany, France, Denmark and Switzerland), Asia-Pacific (India, China, Australia, and Japan) and Latin America (Brazil and Mexico). The study was concluded in June 2016. For more information, or to download the study, go to http://sites.tcs.com/artificial-intelligence/