Big Idea: Artificial Intelligence and Business Strategy

How Big Data and AI Are Driving Business Innovation in 2018

At the intersection of analytics and smart technology, companies are starting to see the long-awaited benefits of AI.

Randy Bean Reading Time: 4 min 

Topics

Artificial Intelligence and Business Strategy

The Artificial Intelligence and Business Strategy initiative explores the growing use of artificial intelligence in the business landscape. The exploration looks specifically at how AI is affecting the development and execution of strategy in organizations.

In collaboration with

BCG
More in this series
Artificial Intelligence AI Big Data

After years of hope and promise, 2018 may be the year when artificial intelligence (AI) gains meaningful traction within Fortune 1000 corporations. This is a key finding of NewVantage Partners’ annual executive survey, first published in 2012. The 2018 survey, published on January 8, represented nearly 60 Fortune 1000 or industry-leading companies, with 93.1% of survey respondents identifying themselves as C-level executive decision-makers. Among the 2018 survey participants were corporate bellwether companies, including American Express, Capital One, Ford Motors, Goldman Sachs, MetLife, Morgan Stanley, and Verizon.

The main finding of the 2018 survey is that an overwhelming 97.2% of executives report that their companies are investing in building or launching big data and AI initiatives. Among surveyed executives, a growing consensus is emerging that AI and big data initiatives are becoming closely intertwined, with 76.5% of executives indicating that the proliferation and greater availability of data is empowering AI and cognitive initiatives within their organizations.

The survey results make clear that executives now see a direct correlation between big data capabilities and AI initiatives. For the first time, large corporations report that they have direct access to meaningful volumes and sources of data that can feed AI algorithms to detect patterns and understand behaviors. No longer dependent on subsets of data to conduct analyses, these companies combine big data, AI algorithms, and computing power to produce a range of business benefits from real-time consumer credit approval to new product offers. Companies such as American Express and Morgan Stanley have publicly shared stories of their successes within the past year.

Staving Off Disruption

Survey participants comprised executives representing data-intensive industries, notably financial services companies, which constituted 77.2% of the survey respondents. Financial services companies have long been at the forefront of industry due to the large volumes of transactional and customer data that they maintain, and they have developed robust data management and data governance processes over a period of decades. These organizations have been at the forefront in the use of analytics to manage risk, assess customer profitability, and identify target market segments. Industries such as life sciences, while newer to data management, possess vast repositories of scientific and patient data that have gone largely untapped relative to the potential for insight.

Now, many of these mainstream companies are facing threats from data-driven competitors that have no

Topics

Artificial Intelligence and Business Strategy

The Artificial Intelligence and Business Strategy initiative explores the growing use of artificial intelligence in the business landscape. The exploration looks specifically at how AI is affecting the development and execution of strategy in organizations.

In collaboration with

BCG
More in this series

About the Author

Randy Bean is an industry thought leader and author, and CEO of NewVantage Partners, a strategic advisory and management consulting firm that he founded in 2001. He is a contributor to MIT Sloan Management Review, Forbes, Harvard Business Review, and The Wall Street Journal. He tweets @RandyBeanNVP.

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Comments (5)
Martin Carroll
This is a nice article and I'm fascinated by the comment that, 'Yet, just over one-fourth (27.3%) of executives report success thus far in monetizing their big data and AI investments. This remains an elusive goal for most organizations.'

I'd like to understand the definition of monetization in the study this article describes. Particularly to the extent that it is different to the other forms or categories of objectives measured. Can anyone comment? I have read the report itself and it is not clear, see objectives 1-6 below.

I presume it is more to do with using a company's data as a 'product', or service, in and of itself. That is, not for operating their own business per se, but for other adjacent players in the ecosystem or supply chain to achieve benefits 1-5 below.

Top objective of Big Data and AI investments
- 1 Advanced analytics/better decisions
- 2 Improve customer service
- 3 Decrease expenses
- 4 Innovation/disruption
- 5 Speed to market
- 6 Monetization
Subodh Saxena
Unlike humans, AI in its present form needs big data for meaningful results and is not able to use the experience for another similar application. The work in progress on more effective Deep Learning is likely to overcome these limitations to some extent in near future. In such a scenario dependence on big data may be reduced and AI driving business innovation will be smoother.
Rhys Gambling
An interesting article but the topic of digitization is a vast topic area of major importance. It is in my view the result of the combined learning of the human race the past years which has led to commodification of technology which is why we are where we are now. More importantly, I believe it is time to use these technologies for the good of all. None of the existing political systems really function well and our current outlook based on this and population growth is not sustainable. Companies need to start thinking in the medium to long term instead of just short term wins.  The barriers to entry are down as per Porters 5 forces and society is on the change. The buy my way back in to the market approach used by so many incumbents of the past is failing. The new kids on the block have taken the risk and are making the gains. AI, big data, is a tiny part of digitization but is also important. Great strides can be made where everyone benefits but the though process in society needs to change. Enter a new concept called "sharing". No it's not a joke but  a change in mindset.  The bigger question is, can we rise to challenge and be progressive in our outlook. Adaptability is key in my view!
Sanjay Singhvi
Success of AI in any organization dependent on the quality of data available and to ensure rich data source big data and master data management is key. One of the key factor for AI to succeed is availability of accurate data for at least three to five years.
Alexa Jones
This is actually true. Big Data and Artificial Intelligence is the future of digitalisation. Big companies have already made huge inroads in data analysing and storing. The growth from Web Designing to high level technologies like Hadoop is mindblowing.