IDC: For 1 in 4 companies, half of all AI projects fail
Despite enterprises’ best efforts, painless AI deployments appear destined to remain elusive for all but the most dogged adopters. A recent study conducted by analysts at International Data Corporation (IDC) found that of the organizations already using AI, only 25% have developed an “enterprise-wide” AI strategy, and it found that among those in the process of deploying AI, a substantial number of projects are doomed to fail.
IDC’s Artificial Intelligence Global Adoption Trends & Strategies report, which was published today, summarizes the results of a May 2019 survey of 2,473 organizations that use AI solutions in their operations. It chiefly focused on respondents’ AI strategy, culture, and implementation challenges, as well as their AI data readiness initiatives and the production deployment trends expected to experience growth in the next two years.
“Organizations that embrace AI will drive better customer engagements and have accelerated rates of innovation, higher competitiveness, higher margins, and productive employees,” said IDC Artificial Intelligence Strategies vice president Ritu Jyoti. “Organizations worldwide must evaluate their vision and transform their people, processes, technology, and data readiness to unleash the power of AI and thrive in the digital era.”
Firms blamed the cost of AI solutions, a lack of qualified workers, and biased data as the principal blockers impeding AI adoption internally. Respondents identified skills shortages and unrealistic expectations as the top two reasons for failure, in fact, with a full quarter reporting up to 50% failure rate.
However, that’s not to suggest success stories are few and far between. More than 60% of companies reported changes in their business model in association with their AI adoption, and nearly 50% said they’d established a formal framework to encourage the ethical use, potential bias risks, and trust implications of AI, according to IDC. Moreover, 25% report having established a senior management position to ensure adherence.
“For many organizations, the rapid rise of digital transformation has pushed AI to the top of the corporate agenda,” added Jyoti. “However, as AI accelerates toward the mainstream, organizations will need to have an effective AI strategy aligned with business goals and innovative business models to thrive in the digital era.”
Despite a few bumps in the road, there’s no question that AI is an unstoppable force — particularly in the enterprise.
Gartner reported in January that AI implementation grew a whopping 270% in the past four years, and 37% in the past year alone. That’s up from 10% in 2015, which isn’t too surprising considering that by some estimates, the enterprise AI market will be worth $6.14 billion by 2022. According to the McKinsey Global Institute, the subsequent labor market shifts will result in a 1.2% increase in gross domestic product growth (GDP) for the next 10 years and help capture an additional 20% to 25% in net economic benefits — $13 trillion globally — in the next 12 years.
Roughly 9 in 10 of C Suite survey respondents characterize AI as the “next technological revolution,” an Edelman survey found. Specifically, 94% of tech executives think it’ll create innovative “smart” homes, and over 74% collectively say it will be “instrumental” in ramping up the development of autonomous cars, such as those from Alphabet subsidiary Waymo, Uber, GM’s Cruise, and others.