Half of business leaders have reservations about AI

A new study finds that almost half of business and technology leaders have reservations about AI – with many exhibiting low confidence in the implementation of the technology. This could present a major opportunity to consultants who position themselves as valuable implementation partners.

For all the noise around AI at the start of 2023, the year has drawn to a close with a mounting sense of having been here before. After a decade of different digital innovations being painted as a panacea for business productivity and efficiency – from the blockchain, to cryptocurrency and the metaverse – business leaders have been promised the world before, and been underwhelmed with the results of their early investments.

With generative AI’s benefits having been touted as benefitting the world’s economy to the tune of trillions before, it was always going to lead to some excitement – particularly amid a global market that found itself in an inflation-driven slump. But as the economic picture has brightened moderately through 2023, with inflation slowing, and economic growth marginally exceeding expectations, many bosses find themselves in a position where they are less inclined to believe the hype.

Now, a pervading sense of ambivalence seems to have spread throughout the business community on just what AI can really deliver. This has been further exemplified by a new study from digital transformation consultancy Daemon – which polled 150 decision makers from IT and non-IT departments of firms with more than 500 employees, in order to reveal their different opinions about digital transformation.

The results show that while investment in the technology has grown by 48% since 2021 across the financial services, retail, distribution, transport, energy, and utilities sectors, 49% of senior decision makers have low confidence in AI implementations. Some of this seems to result from the fact one of the driving forces behind AI adoption has once again been fear of missing out – the dreaded FOMO leading firms to invest for the sake of it, without factoring in genuine business needs.

Daemon’s research results show that 99% of organisations are looking to use AI or ML to seize “new opportunities”. However, fewer seem to trust it to bolster their existing capabilities in the immediate future. In the next six months, for example, while more than half said they would use it for analytics support or automation, just 32% of firms said using chatbots and 40% said ‘real-time optimisation’ of service were on the cards.

Ian Ray, Daemon’s head of data, machine learning and AI, commented, “It’s clear organisations see the potential value of AI and are working quickly to implement this technology to yield an array of benefits. But to maximise the business impact of their investments in digital, organisations need to ensure AI is a strategic enabler as part of their broader digital transformation approach.”

External expertise

Indeed, while 98% of organisations have some ‘vision’ for the use of AI, the fact 49% of senior decision makers have low confidence in implementing AI suggests that ‘vision’ doesn’t align with the technology and change management deemed possible right now. This leads to particular concerns around the technology as a security risk.

Data security and privacy has emerged as the top driver of low confidence among organisations, followed by difficulties of finding a trusted vendor to work at 31% of responses. At the same time, legacy technology holding organisations back is cited by 29% as a limiting factor, along with 24% noting a perceived low skill level within the business – something which could also lead to dangerous misuse of AI tools.

However, the data shows that organisations are pressing ahead with implementation to reap the benefits of AI in the next 12 months. The key may be to bring in additional expertise to get the most from an implementation – helping reduce the skills gaps, while coordinating a move away from legacy systems. Over the past two years, 43% of organisations have called for such strategic support, up from 19% in 2021 – while 98% said they would benefit from advisory services during any digital transformation. Pressure from customers is cited as the most common trigger for hiring a digital transformation consultancy, increasing by 17% points over the past two years.

Expanding on this, Ray concluded, “Organisations will not achieve their goals with a one-time ‘digital transformation’. There is a requirement for organisations to set out a strategic route to maximise business impact from their digital initiatives, but also be prepared to adjust that route and the associated digital investment priorities overtime considering business strategic direction, external trends and insights, and the customers’ perspective.”