AI investment will soar to $232 billion by 2025
But AI project challenges include the sheer pace of change as well as job losses
Business expenditure on AI and intelligent automation technology is expected to reach $232 billion in the next seven years, according to KPMG, an 18-fold increase on the $12.4 billion spent globally today..
The increased expenditure on such technologies, which include artificial intelligence (AI), machine learning and robotic process automation (RPA), is detailed in KPMG's latest report on automation, titled 'Ready, Set, Fail?: Avoiding setbacks in the intelligent automation race'.
It found that businesses will struggle to get a return on investment in AI projects unless they're signed off at the most senior level, while for automation to be effective it must be incorporated into a wider digital transformation of the business that is led by technology.
"It's not clear whether most companies understand that intelligent automation is about changing business processes, and then restructuring the organisation around those new processes now driven by technologies that didn't exist before," the report read.
"This means shifting the business and operating model from one of people supported by technology to one of technology supported by people. It's a digital-first operating model."
The study, which involved interviewing executives from a range of sectors in businesses around the world, was commissioned to understand why businesses deployed AI, the implications of deployment, and how this could be scaled.
Researchers found that while most executives emphasised intelligent automation can digitally transform their businesses and staff roles, several challenges existed - including being unable to handle the pace of change, having to choose from hundreds of technology options, and having to define the future workforce.
"If it's not done right, they may be disappointed at what they save on work that is automated," said KPMG's leader of cognitive automation initiatives, Cliff Justice.
"Determining what can be scaled across multiple areas requires some strategic thought and testing of the concept in units that are small enough to succeed with repetitive tasks. Hard decisions have to be made about reshaping workforces and training employees in new skills. There could be downsizing."
KPMG concluded that while companies recognise the potential value in reshaping strategies around AI, there has been little progress so far, with the vast majority of projects still in the planning stages. Nearly two-thirds of executives interviewed, however, indicated plans to fully implement RPA by 2021, while 49% plan to implement cognitive automation at scale by then.
The researchers also identified growing evidence that taking a more strategic approach to automation focused on developing new business models could increase the returns by between five and ten times. They warned companies against "piecemeal efforts" that focus on cutting costs of legacy processes, and reducing headcount.
"Done strategically, leveraging AI yields important advantages: improved customer service, empowered employees, better innovation, lowered costs, faster projects, and upgraded, standardised and higher quality operations," the report continued.
"But to realise these transformational benefits, any AI effort should be part of a strategy aligned with overarching business goals and pursued across the organisation."
KPMG's findings follow a PwC report issued last month that predicted AI deployment will create 7.2 million jobs in the next 20 years while culling seven million.
Accelerating AI modernisation with data infrastructure
Generate business value from your AI initiativesFree Download
Recommendations for managing AI risks
Integrate your external AI tool findings into your broader security programsFree Download
Modernise your legacy databases in the cloud
An introduction to cloud databasesFree Download
Powering through to innovation
IT agility drive digital transformationFree Download