AI gets real (sort of) in the enterprise

Two years ago artificial intelligence (AI) reached the peak of absurd expectations, as I tried to capture in this post. Today? Well, reality seems to have crept in, something that shows in how companies have been approaching AI, which has been to focus on low-hanging fruit, rather than moonshots.

This is according to Deloitte’s State of AI in the Enterprise, 2nd Edition, which unveils a world increasingly serious about AI. That said, there are still some head-scratchers in the data. Let’s dive into the report.

Getting the boring stuff right

First, of the 1,100 executives surveyed by Deloitte, a whopping 82 percent feel that they are getting a positive financial return from their AI investments. Of course, not everyone has benefited equally. The only industries claiming to get a high return from their investments are Tech/Media/Entertainment/Telecom, Professional Services, and Industrial Products (this last category spending the least yet still gaining much). Life Sciences and Health Care, Government, Financial Services, and Consumer Products, by contrast, all report lower ROI. Yet apparently “lower” ROI doesn’t mean “nonexistent.” Pretty much everyone who invests in AI claims to be happy about it.

The question is why.

No, it’s not because enterprises are finally able to shed their least productive employees. Executives listing “Reduce headcount through automation” increased just two percentage points between Deloitte’s late 2017 and late 2018 surveys (from 22 percent to 24 percent). Meanwhile, the far less controversial (and arguably more useful) benefit of “optimiz[ing] internal operations” climbed six percentage points (from 36 percent to 42 percent).

Much more worrisome, however, was that AI didn’t seem to improve product development and, by extension, customer experience. While 44 percent of those surveyed picked “Enhance current products” as a benefit of their AI investments, that was down from 51 percent in 2017. What about “Create new products”? Also down, from 32 percent to 27 percent. Indeed, more than half of the cited benefits dropped from 2017 to 2018, and the only other benefit to register at least a two-percent improvement (beyond those listed above) is “Capture and apply scarce knowledge.”