When used correctly AI can bring a host of efficiency benefits to organisations in a variety of sectors. However, despite its growing popularity, many businesses are encountering commercial barriers to implementing it within their systems. Here we look at some of the obstacles they face and how they can be overcome.
AI in business
With its roots in ‘intelligent machines’ during the Second World War, AI as we now understand it has grown in both popularity and functionality over the last 10 years. Today, the AI market in the UK is worth over £16 billion, and its use has increased by over 600% in the last decade. Its most popular applications are for data management and analysis, language generation and processing, machine learning, and image generation and processing.
Its benefits to businesses include:
- Improving productivity and efficiency
- Managing risk
- Personalising the customer experience
- Adding security
- Informing business decisions
- Offering a competitive advantage.
Yet, despite these benefits, only one-in-six UK organisations have embraced AI. Let’s look at some of the reasons why some have been slower on the uptake than others.
Cost
According to a 2022 report by the then Department for Digital, Culture, Media, and Sport (DCMS) (now the Department for Science, Innovation & Technology) 432,000 companies in the UK had already adopted a version of AI in 2020. These companies had spent a total of £16.7 billion, with an average spend of £9,500 for small businesses, £380,000 for medium-sized businesses and £1.6 million for large businesses. This spend was potentially expected to increase to £35.6 billion by 2025 and £127 billion by 2040.
Clearly, there are large amounts of money being invested in AI’s use and potential. But if you’re not running a large organisation and haven’t got a spare billion to invest in upfront and ongoing costs, the costs of data acquisition and data management, staff training, data-related costs, compliance costs, and the costs involved with building and maintaining the necessary infrastructure, you need to look for an alternative solution.
You can achieve this by phasing in IT projects that can demonstrate their ROI. Starting on a small scale means that a project will be both cost-effective and manageable and that its value can be assessed before any further investment is made. If it is successful you will be able to take forward any lessons that have been learned and use that experience to inform further projects.
Partnering with an outsourced company who can provide all your AI needs can also be effective.
NB: if your business has a strong green policy you should also factor in the effect that your AI implementation has on the environment, particularly the amount of electricity involved in powering data centres. It’s estimated that by 2030 the power needed to run data centres could represent around 6% of UK electricity demand and large data centres can use the equivalent of powering over 230,000 homes.
Lack of expertise
As a relatively new tool, AI has relatively few experts. With the skills gap widening as technology becomes more advanced, despite a £118 million funding injection to boost the UK’s AI skills base, many people still feel ill-equipped to deal with the implementation and running of an AI project within their organisation. A recent report by the British Chambers of Commerce and the Open University, entitled, “An Analysis of the UK Skills Landscape” notes that 64% of employees are not confident about applying AI technologies.
The answers to this conundrum are not only to collaborate on AI projects with reliable experts but also to recruit specialists and train staff in-house to ensure future internal talent. A diverse pool of internal talent from a wide variety of departments will ensure full representation in the data and skillsets, will foster a culture of experimentation and innovation and will elevate your company’s brand, shining a light on your advanced and progressive technology and training policies.
Resistance to change
Despite many organisations fearing that they’ll fall behind if they fail to adopt AI, numerous businesses are still resistant to change. In the UK finance, technology, media and telecom companies have been early adopters of the technology while construction has the lowest adoption rates of any industry. This resistance can come from three directions: executives who either don’t understand how the technology can improve their business or don’t wish to invest in it, employees who fear they’ll be replaced, and customers who’d prefer to deal with a ‘real person’ rather than a chatbot.
Executives can be convinced by the potential ROI of AI – Ricoh, for example, discovered that by using AI to optimise toner cartridge manufacturing the company saved around £300,000 a year on the process. Employees can be encouraged to engage by involving them in decision-making and within the consultation process, helping them to see that by using AI to conduct routine and mundane tasks, their valuable time can be better focused on their core activities. And customers will be convinced of the value of AI when their experiences are better personalised and their company interactions are more efficient.
The keys to integrating AI within your business process are trust and communication at all levels. Overcoming commercial barriers may take time and receive a certain amount of push-back, but gradual integration combined with full disclosure, an ethical approach and partnering with specialists will ultimately help improve your business’s efficiency.
For expert advice on any of the topics discussed in this blog, contact Brighter Consultancy.
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