IBM Study – C-Suite innovators say AI will make biggest impact on personalizing customer experience

Key Points:
– IBM Institute for Business Value interviewed over 3,000 C-suite executives in 20 industries and over 90 countries to understand their approach to AI and cognitive technology
– More than half of C-suite executives surveyed (53%) think AI will give them a competitive advantage by improving customer experience and personalization
– Innovative leaders are reframing their enterprises to tap into data they don’t yet have – or don’t have in sufficient supply.
– To compete, organizations are “rewiring” their operating models for speed and responsiveness. The cognitive enterprise can do something more – become situationally aware with the potential to respond autonomously.


Read the full C-Suite report

There are two types of companies in any modern technology movement: those that are leading the innovation charge, and those who follow behind or watch from the sidelines. The transition to artificial intelligence (AI) and cognitive technology is no different.

In spring 2017, the IBM Institute for Business Value interviewed over 3,000 C-suite executives in 20 industries and over 90 countries to understand their approach to these exciting business technology tools. In one of the biggest C-Suite studies they’ve conducted to date, the “Catalyst for the C-Suite: Reinventing Enterprises and Experiences with Artificial Intelligence report” explores the possible influence of AI on businesses.

Respondents were segmented by their current use of AI to automate their business processes, as well as their planned future investment in this technology over the next two to three years.

  • Reinventors (11% of surveyed CxOs): AI-enabled with significant future investment
  • Tacticians (28% of surveyed CxOs): AI-enabled but still with minimal future investment
  • Aspirationals (23% of surveyed CxOs): Planning their first AI-enabled investments
  • Observers (38{% of surveyed CxOs): No AI-enabled today and no planned investment

Here are the key findings from this study:

1. AI will help improve and personalize customer experiences

More than half of C-suite executives surveyed (53%) think AI will give them a competitive advantage by improving customer experience and personalization.

The study found 63% of the surveyed “Reinventor” CMOs and nearly half of the “Tactician” CMOs plan to deploy AI within the next two years to transform customer experience.

It is very helpful to have something that can make inferences. My job is to create intimacy at scale and AI helps me do that.
— Jason Alan Snyder, Global CTO, Momentum Worldwide, United States

Even in today’s data-driven world, many businesses still lack insights about their ecosystem of customers, partners and products, along with the ability to create personalized experiences. And with 86% of customers saying personalization influences their purchasing decisions, businesses are paying close attention to emerging technologies that can help them focus on building intimate customer relationships.

AI reveals patterns and relationships in massive, diverse data sets by understanding its context with natural language understanding, computer vision, and machine learning which can provide valuable insights on business performance to improve it overtime.

Consider a virtual reality showroom where customers can interact with 3D models of ovens, for example. They can open doors, rearrange shelves, bake a virtual pie and configure their own design. That’s a personalized experience. It’s also an opportunity to capture each interaction customer-by-customer and contextualize the data, which renders a far richer view of what customers care about. In turn, that data can be fed back to product design, research and manufacturing.

Similarly, augmented reality mobile apps are replacing catalogs and could be used by sales representatives in face-to-face settings to sell carpeting for an office park or pharmaceuticals to a medical practice. 3D printing, which is revolutionizing rapid prototyping in manufacturing and becoming more cognitive, enabled by AI, brings catalogs to life.

You need to continuously reinvent yourself, adapt your business and be quick enough to implement before others do.
— Christian Hebich, Global Head of Solution Integration & Services, Roche Diagnostics, Switzerland

2. Transforming operating models and supply chains with AI

Over half of all “Reinventors” in the study expect AI will help their operating model become more competitive in two to three years. Both “Reinventors” and “Aspirationals” COOs also believe that when a combination of two or more technologies is used with emerging technologies across the enterprise, such as IoT, AI, and automation, they may be better enabled to transmit data that can more accurately forecast supply and demand in the moment.

The study found 72% of surveyed “Reinventor” COOs are interested in this radical recalibration of how organizations design, produce, and transport goods or services.

Instantaneous prediction has become the new expectation and to compete, organizations are rewiring their operating models for speed and responsiveness. The CxOs in this study were keenly focused on using AI in the backend by automating operational processes to be more efficient, and using it upfront to enhance employee expertise and personalize the customer experience.

3. Augmenting and empowering workforces with AI

CxO respondents currently using AI believe its adoption would also enhance workforce performance. More than twice as many “Reinventors” and “Aspirationals” expect to augment their workforce’s capabilities by using AI to automate routine jobs, freeing up employees to perform more challenging, high-value tasks.

As these Tier 1, business-as-usual tasks are automated, employees have time to think up new innovative ideas allowing companies to scale employees’ expertise, easily transfer knowledge, and the enable them to move faster and outthink the needs of the market.

For example, employees at Woodside Energy, Australia’s largest energy company, are using Watson’s AI to access the company’s 30 years of documented expertise in more than 600,000 pages of unstructured technical files. As a result, the time spent by the engineers and geoscience team members reading and searching for expert data has been reduced by 75%. More immediate access to data enhances the collective knowledge transfer from one generation of employees to the next, and increases employee expertise and speed of execution.

4. Driving innovation while still watching for disruption

Digital transformation – reinventing business models by digitizing legacy processes – is the antidote to disruption, so it’s no surprise that the “Reinventors” have embraced this concept. While most leaders focus on competition from their own industry, the “Reinventors” also keep watch for developments in other industries that could disrupt their business.

Although more than twice as many “Reinventors” as “Tacticians” report a high degree of disruption in their industries, “Reinventors” are confident they have the wherewithal to manage the change they see coming. By contrast, “Aspirationals” who are also experiencing significant disruption said they are less prepared to manage this disruption.

The Reinventors aren’t retreating to traditional vertically integrated business designs. Instead, they’re acting on a conviction that more open, expansive and digital business ecosystems will illuminate entirely new possibilities to create value and enter new markets.

5. Recalibrating for AI operations: Revolution in real time

The convergence of technologies like the IoT and Blockchain in the cloud enable vast improvements in supply and demand forecast accuracy, and speed across the supply chain. In tandem with robotic process automation, organizations could optimize processes for immediacy.

First-movers can begin to conceive entirely new ways of working – from reducing waste, errors or fraud, to the autonomization of everything from self-driving delivery trucks to factory floors that select their own suppliers.

“Reinventors” and “Aspirationals” envision cognitive enterprises that are are remarkably alike: 72% of “Reinventor” COOs and 64% of “Aspirational” COOs see the convergence of these digital technologies as having a significant impact on their operating models. Just 32% of “Tactician” COOs do.

Read the whole report

How do you think you’ll apply AI in your business the next two or three years? Automate an enterprise process, configure a chatbot, embed more sensors, empower employees, draw insights to serve up innovative customer experiences?

Conducted by IBM’s Institute for Business Value, the full study, “Catalyst for the C-Suite: Reinventing Enterprises and Experiences with Artificial Intelligence” can be viewed and downloaded from our website.

This report is part of a series of C-Suite studies and based on findings from interviews with 3,069 C-suite executives globally about how the emerging technology can digitally transform their enterprises.

Read and download the full report here.


Learn how C-Suite leaders are reinventing enterprises with AI and cognitive technology.