Researchers Find Narrow Path to Increased Profits with AI Tech
November 6, 2020
Uh oh—AI and machine learning may not deliver value to most enterprises that adopt the technology. Researchers at MIT Sloan Management Review have found more than half the companies they studied are deploying AI solutions, but fewer than 10% of those are reaping significant financial benefits. If yours is one of those companies, or is considering AI tools, you will want to check out the researchers’ report, “Expanding AI’s Impact with Organizational Learning.” It turns out even with organizations that correctly address the basics, “like having the right data, technology, and talent, organized around a corporate strategy,” only 20% are seeing increased financial gains.
What is the difference? The team found companies that approach learning as a two-way street do the best with AI resources. And that is not a simple task. The report explains:
“Our research shows that these companies intentionally change processes, broadly and deeply, to facilitate organizational learning with AI. Better organizational learning enables them to act precisely when sensing opportunity and to adapt quickly when conditions change. Their strategic focus is organizational learning, not just machine learning. Organizational learning with AI is demanding. It requires humans and machines to not only work together but also learn from each other — over time, in the right way, and in the appropriate contexts. This cycle of mutual learning makes humans and machines smarter, more relevant, and more effective. Mutual learning between human and machine is essential to success with AI. But it’s difficult to achieve at scale. Our research — based on a global survey of more than 3,000 managers, as well as interviews with executives and scholars — confirms that a majority of companies are developing AI capabilities but have yet to gain significant financial benefits from their efforts. … Our key finding: Only when organizations add the ability to learn with AI do significant benefits become likely. With organizational learning, the odds of an organization reporting significant financial benefits increase to 73%.”
Interested readers should navigate to the report, kindly supplied in full for free. Section 1 is the executive summary and section 2 describes an example firm that met with success. One might skip section 3, which covers the disappointed, and focus on sections 4-8. That is where the researchers lay out, in great detail, the approach that could mean the difference between a wasted investment and a nearly 75% chance of significantly increased income. We suggest those who wish to be in the latter category study it carefully.
Cynthia Murrell, November 6, 2020
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