September 19, 2017 | Written by: Brian Goehring
Categorized: Institute for Business Value
A gap is emerging between companies that have embraced artificial intelligence (AI) and those that have not. Early adopters are using AI to rethink and reinvent their enterprises, positioning themselves to discover innovations that were once unimaginable. Those that haven’t yet leveraged AI are missing out on insights and opportunities that could help transform their businesses.
A new report from the IBM Global C-suite Study Program identifies a group of high-performers (the Reinventors) who have already deployed AI capabilities in their business operations and are planning significant further AI investments in the next two to three years. This group – which makes up 11 percent of the more than 3,000 C-suite executives the IBM Institute for Business Value interviewed between April and June this year – is solving more complex problems, infusing more intelligent capabilities into their business processes and investing more to create a new and preferred future when compared to the other surveyed CxOs.
Reinventors’ sharper focus on AI clearly distinguishes them from other segments in the study (the Tacticians, Aspirationals and Observers). They’re thinking as well as acting differently. It’s these characteristics that can show other organizations how to increase their efficiency and competitiveness.
Reframing the enterprise
The Reinventors are making AI technologies a cornerstone in their organizations. Once in place, they’re in a better position to leverage the full array of technologies coming on-stream – including established ones such as mobile, cloud and Internet of Things (IoT), and more nascent technologies such as blockchain, robotics and virtual reality.
In short, AI underpins technology convergence. Couple that with abundant data made available by connecting all of these technologies together, and you have the makings of a cognitive enterprise. Seventy percent of Reinventors rely on data to inform their business strategy, compared to 51 percent of Tacticians and just 35 percent of Aspirationals. Reinventors gather data, question assumptions, look for new patterns and then reframe possibilities. Their strategy is to continuously seek out the next best opportunity.
Pursuing the personal
In the age of AI, the long-sought market-of-one segmentation is less about targeting specific products to individual customers and more about personalizing customer experience. What differentiates Reinventors from Tacticians and Aspirationals is their approach to achieving this. Reinventors are more effective at working with partners to understand and enhance customer experiences, and then deploying technology to transform customer interactions.
To compete in the future, organizations need to rewire their operating models for speed and responsiveness. The personalized experiences promised at the point of engagement require operations that can consistently and reliably deliver on that expectation. But the cognitive enterprise can do something more: become situationally aware with the potential to respond autonomously.
The capacity to do situational analysis – learn and adapt as you go – is an important difference between simply being digital and being a cognitive enterprise. The shift? Organizations used to rely on an extended supply chain requiring millions of decisions built on last year’s data. Cognitive capabilities enable a supply chain to evaluate the immediate situation with real-time data and react accordingly.
Using AI as a catalyst to spark enterprise transformation is a hallmark of the Reinventors’ business strategy. This approach helps them uncover hidden opportunities and optimize what they already have. Learn more about the Reinventors’ strategy and approach to AI in the full report.
This blog is part of a monthly series that highlights emerging trends from our 19th Global C-suite Study. The study features interviews with more than 10,000 CxOs.