A crisis can open doors to opportunities, and the COVID-19 pandemic is just that. In a world where physical distancing is necessary to stop the spread of the SARS-COV-2 virus, adaptation is key. Gearing up for the future of intelligence is a crucial part of this process.
IDC released a market presentation examining the impact of COVID-19 on the overall engineering and operational technology services market. In that presentation, IDC Product Engineering and Operational Technology Services Program Director Mukesh Dialani said that COVID-19 has severely impacted most industries. However, he added that it also providing service providers a tremendous opportunity. Specifically, it enables them to infuse their customers’ product development life cycle and overall operations with digital engineering services.
Dialani also said that if industries “want to truly transform their business and operations, they should focus on building new business and operations models”. Moreover, they must “collaborate with their engineering services partners to realize the true potential of digital technologies”. These includeIoT, edge, AR/VR, digital twins, and 3D printing in conjunction with traditional engineering services.
Greater Enterprise Intelligence
In a report released in January, the IDC said that “greater enterprise intelligence has become a top priority for business leaders on this transformation journey”. To this end, IDC developed a new Future of Intelligence framework. It provides insight and understanding for business leaders and technology suppliers.
IDC defines the future of intelligence as “an organization’s capacity to learn, combined with its ability to synthesize the information it needs in order to learn and to apply the resulting insights at scale”.
According to IDC, the capabilities needed in the drive towards the future of intelligence will depend on multiple factors. Specially, it should be “a platform that enables ongoing explanation, monitoring, learning, and adaptation”. These capabilities now offer industries and enterprises that have developed them well with opportunities to thrive amid a volatile environment.
IDC predicted that enterprises that invest in Future of Intelligence capabilities will reap huge rewards. For example, they will experience a 100% increase in knowledge worker productivity. In turn, this will result in shorter reaction times, increased product innovation, and improved customer satisfaction. All in all, this will lead to sustainable market share leadership (or achievement of their mission) in their industry.
Future of Intelligence’s Growth
More than 2,000 IT and line of business (LoB) decision-makers took IDC’s Future of Intelligence survey. It confirmed that the adoption of artificial intelligence (AI) is growing worldwide.
Over a quarter of all AI initiatives are already in production. Additionally, more than one-third are in the advanced development stages. Organizations are also reporting an increase in their AI spending this year. They are doing so to deliver a better customer experience, according to more than half of the large companies surveyed. A similar number of respondents said that AI’s greatest impact is in helping employees get better at their jobs.
IDC Artificial Intelligence Strategies program Vice President Ritu Jyoti noted that “early adopters report an improvement of almost 25% in customer experience, accelerated rates of innovation, higher competitiveness, higher margins, and better employee experience with the rollout of AI solutions. Organizations worldwide are adopting AI in their business transformation journey. Not just because they can, but because they must be agile, resilient, innovative, and able to scale.”
There is considerable agreement on the benefits of AI, though there is some divergence on how companies deploy AI solutions. Examples include IT automation, intelligent task/process automation, automated threat analysis and investigation, supply and logistics, automated customer service agents, and automated human resources are the top use cases where AI is employed now. Automated customer service agents and automated human resources are a priority for larger companies (5000+ employees), and IT automation is the priority for smaller and medium-sized companies (<1000 employees).
Spending on AI for Future of Intelligence
Last month, IDC predicted that global spending on artificial intelligence (AI) will double over the next four years. It will grow from $50.1 billion in 2020 to more than $110 billion in 2024. The IDC Worldwide Artificial Intelligence Spending Guide posited that spending on AI systems will accelerate over the next several years. Organizations will deploy AI as part of their digital transformation efforts to remain competitive in the digital economy.
The said report quotes Jyoti again. “Companies will adopt AI—not just because they can, but because they must. AI is the technology that will help businesses to be agile, innovate, and scale. The companies that become ‘AI powered’ will have the ability to synthesize information. AI will be utilized to convert data into information and then into knowledge. Furthermore, they will be equipped with the capacity to learn and understand relationships and apply these insights to business problems. Finally, they will develop the capability to deliver insights at scale.
Two of the leading drivers for AI adoption are as follows. First, delivering a better customer experience. And second, helping employees to get better at their jobs. This is reflected in the leading use cases for AI. They include automated customer service agents, sales process recommendation and automation, automated threat intelligence and prevention, and IT automation.
Retail and banking industries are the expected top investors in AI. The retail industry will likely focus most of its AI investments on improving the customer experience. Some of the applications include using chatbots and recommendation engines. Banking is expected to include spending on fraud analysis and investigation, and program advisors, and recommendation systems. Discrete Manufacturing, Process Manufacturing, and Healthcare will round out the top five industries expected to spend the most on AI in 2020.
Impact of COVID-19 on AI
“COVID-19 caused a slowdown in AI investments across the Transportation industry as well as the Personal and Consumer Services industry, which includes leisure and hospitality businesses. These industries will be cautious with their AI investments in 2020 as their focus will be on cost containment and revenue generation rather than innovation or digital experiences,” IDC Customer Insights & Analysis senior research analyst Andrea Minonne said.
Minonme also said that “AI has played a role in helping societies deal with large-scale disruptions caused by quarantines and lockdowns. Some European governments have partnered with AI start-ups to deploy AI solutions to monitor the outcomes of their social distancing rules, and assess if the public was complying with rules. Also, hospitals across Europe are using AI to speed up COVID-19 diagnosis and testing, to provide automated remote consultations, and to optimize capacity at hospitals.”
Customer Insights & Analysis research manager Stacey Soohoo said “enterprises have seen a silver lining in the current situation: an opportunity to become more resilient and agile in the long run. Artificial intelligence continues to be a key technology in the road to recovery for many enterprises. Adopting artificial intelligence will help many to rebuild or enhance future revenue streams and operations.”
Geography of the Future of Intelligence
On a geographic basis, the United States will deliver more than half of all AI spending throughout the forecast, led by the Retail and Banking industries. Western Europe will be the second-largest geographic region, led by Banking, Retail, and Discrete Manufacturing. China will be the third-largest region for AI spending with State/Local Government, Banking, and Professional Services as the leading industries. The strongest spending growth over the five-year forecast will be in Japan (32.1% CAGR) and Latin America (25.1% CAGR).
Over half of Australian and New Zealand enterprises implementing AI solutions have said the deployments are enabling changes to their business models. Conversational AI is transforming the customer care model and predictive analytics is shifting traditional maintenance, business models. A/NZ organizations are using AI Recommendation Systems to optimize transport routes, detect driving offenses, and determine effective environmental protection actions.
IDC’s report “AI in Australia and NZ: Viable Use Cases Driving Adoption,” says the main drivers behind investment are automation for productivity, customer satisfaction, business agility, and accuracy. “Organizations are shifting workloads to AI solutions where the system can make decisions and act faster than employees can”, according to Liam Landon, Associate Market Analyst at IDC. “Artificial Intelligence is augmenting the employee workforce, driving changes to business models to capture real returns on improved productivity, satisfaction, agility, and accuracy.”
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