Unleashing The Power of AI For Enterprise Automation
Unleashing The Power of AI For Enterprise Automation
the Power of AI
for Enterprise
Automation
Dispelling the myths surrounding machine
learning’s ability to automate and augment
business processes reveals a wealth of potential
on the not-too-distant horizon.
And yet, AI is not nearly as pervasive for automating and enhancing business processes.
Although an Oxford study says AI could automate more than 50 percent of all jobs over the
next two decades, many executives—perhaps with perspectives clouded by media hype and
misinformation—doubt the potential impact of this burgeoning technology.
In this paper, we provide a practical fact-based view of the AI trends and implications for enter-
prise automation over the next five to seven years. Based on our work with a wide range of
companies and discussions with academia, start-ups, and enterprise users, we highlight four
important AI facts, discuss the implications, and offer strategies on how to get started.
Figure 1
Three trends are fueling the artificial intelligence boom
Global data center IP traffic Deep learning chipset market Number of annual patent
(zettabytes per year) revenue ($ million) applications for machine learning
3,000
+26.6% +42.2%
15.3 12,200
12.9 2,500
10.8 513
8.6
6.5
4.7 2016 2025f
2,000
Processor trends
2015 2016 2017e 2018f 2019f 2020f 107 1,500
GPU computing performance
• By 2020, 92% of workloads will 106
be processed by cloud-based 1,000
105
data centers
• By 2020, 68% of workloads 104
processed by cloud-based data 103 500
centers will be processed by
public cloud data centers and 102
32% by private cloud data centers Single-threaded performance
0
(2016e: 56% vs. 44%) 1980 1990 2000 2010 2020f 2000 2004 2008 2012 2016e
Notes: GPU is graphics processing unit. Patents are those filed with the US Patent and Trademark Office.
Sources: Cisco, Tractica, Nextbigfuture, Teqmine Analytics; A.T. Kearney analysis
These trends offer strong evidence that AI will continue to improve. For business leaders, this
means that ignoring AI is no longer an option.
Figure 2
The use of artificial intelligence will be narrow in scope in the near term
Pattern • Loans risk • Fraud detection • Product recommen- • Real-time clinical • Mimicking
recognition inference based (based on known dation based on diagnosis intuition and
on rules patterns) hidden customer • Anticipate creative connect-
preference cyberattacks ing of dots
Reasoning and • History-based • Forecasting using • Identifying hidden • Beating • Beating best-in-
optimization predictive demand-sensing biases from best-in-class class human
forecasting input with learned forecasting data human forecaster forecaster in
segmentation and input in specific domain several domains
In the foreseeable future, AI applications will fit a narrow paradigm of using training data for
supervised machine learning. This has two strategic implications: acquiring labeled data for
training becomes a strategic capability and a source of differentiation, and AI solutions require
deep functional and domain-specific human co-creation and process redesign.
One way to characterize machine-learnable tasks is what computer scientist Andrew Ng calls
A→B activities: processes that take a set of unambiguous inputs and produce a response
(see figure 3). For example, retail demand forecasting is an A→B activity. By taking an array of
Figure 3
Narrow AI is best used when basic data can generate a clear response
Mapping enterprise processes and activities into A→B versus non-A→B categories can help
managers pinpoint opportunities to use AI automation and augmentation strategies.
Consider the following when deciding where to use AI for enterprise automation:
• One-time costs. Assess the initial capital outlay for a new AI solution, such as developing an
algorithm and acquiring training data. Open-source access to algorithms and pay-as-you-go
“AI as a service” platforms can lower the fixed-cost hurdles, but access to training data can
be either an expensive bottleneck or a powerful source of differentiation.
• Switching costs. Evaluate the costs associated with displacing the existing solution with an
AI solution, including technical hurdles such as the ability to open the AI algorithm’s black box
to trace and explain decisions and human obstacles such as political and cultural resistance
to change.
• System externality hurdles. Consider the extent to which the AI solution could negatively
affect third parties that did not choose to use the new technology, bearing in mind that the
value of the solution will increase as more users adopt it.
Companies face a variety of challenges when adopting AI solutions, along with different
potential timelines for achieving a broad impact. For example, a call center we worked with
was assessing one solution that would convert handwritten forms into structured database
Use case 1.
Extracting data from a
structured context and
recognizing letter shapes
Use case 2.
Extracting data from a
semi-structured context
with keyword extraction
Use case 3.
Behavioral profiling and sentiment
analysis for customer contact
engagements
Low High
records (see figure 4). The software development and switching costs were modest because
the solution could be launched by using off-the-shelf machine-learning modules. In addition,
the company already had a large amount of labeled data to use for training, optical character
recognition scanners to process the information, and extensive databases. The solution faced
relatively low externality barriers, and proof-of-concept solutions in certain functions and
geographic units could serve as training data and points of reference for other units. The
company expects to have broad use of the solution by 2021.
Another solution would enhance the call center’s agent interactions by automating sentiment
analysis from consumers’ voice calls or chats. This solution has much higher switching costs in
terms of cultural and risk barriers. The company opted to start small to minimize any negative
impact on its customers. If the solution works, the company will need to redesign its end-to-end
training process to allow the AI engine to push suggested responses to agents. This solution has
relatively high network externalities, where higher adoption will generate more training data to
improve performance but collecting the initial critical mass of training data will take time and
require company leaders to take a leap of faith. Given such complexities, an AI sentiment analysis
bot will likely take seven to 10 years rather than the first solution’s two- to three-year adoption.
AI automation is rapidly becoming a reality across organizations and value chains. Now is the
time for forward-thinking business leaders to adopt a disciplined, portfolio-based approach to
develop machine-learning capabilities, data, and partnerships to remain relevant.
Author
The author would like to thank Eric Gervet, Florian Dickgreber, Sean Monahan, Denis Bassler,
and Joseph Edwar for their valuable contributions to this paper.
For more information, permission to reprint or translate this work, and all other
correspondence, please email: [email protected].
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