Amid the many business disruptions caused by covid-19, here’s one largely overlooked: artificial intelligence (AI) whiplash.

As the pandemic began to upend the world last year, businesses reached for every tool at their disposal—including AI—to solve challenges and serve customers safely and effectively. In a 2021 KPMG survey of US business executives conducted between January 3 and 16, half the respondents said their organization sped up its use of AI in response to covid-19—including 72% of industrial manufacturers, 57% of technology companies, and 53% of retailers.

Most are happy with the results. Eighty-two percent of those surveyed agree AI has been helpful to their organization during the pandemic, and a majority say it is delivering even more value than anticipated. More broadly, nearly all say wider use of AI would make their organization run more efficiently. In fact, 85% want their organization to accelerate AI adoption.

Still, sentiment isn’t entirely positive. Even as they’re looking to step on the gas, 44% of executives think their industry is moving faster on AI than it should. More startling, 74% contend the use of AI to help businesses remains more hype than reality—up sharply in key industries since our September 2019 AI survey. In both the financial services and retail sectors, for example, 75% of executives now feel AI is overhyped, up from 42% and 64%, respectively.

How to square these seemingly opposed points of view on what KPMG is calling AI whiplash? Based on our work helping organizations apply AI, we see several explanations about hype. One is the simple newness of the technology, which has allowed for misperceptions about what it can and can’t do, how long it takes to realize enterprise-scale results, and what mistakes are possible as organizations experiment with AI without the right foundation.

Even though 79% of respondents say AI is at least moderately functional at their organization, only 43% say it is fully functional at scale. It is still common to find people who think of AI as something to be purchased—like a new piece of machinery—to deliver immediate results. And while they may have experienced some success with AI—often small proofs of concept—many organizations have learned that scaling them to enterprise level can be more challenging. It requires access to clean and well-organized data; a robust data storage infrastructure; subject matter experts to help create labeled training data; sophisticated computer science skills; and buy-in from the business.

Of course, it also is no stretch to believe proponents of AI may have exaggerated its potential from time to time or discounted the effort required to realize its full value.

As to why executives are conflicted about the speed of AI’s adoption, we see basic human nature at play. For starters, it’s always easier to believe the grass is greener on the other side. We also suspect a lot of people worry their industry is moving too fast primarily because their own organization isn’t matching that speed. If they’ve experienced early-stage hiccups with AI—especially last year, when the world witnessed AI-enabled accomplishments like record-fast development of covid-19 vaccines—it may have been easy to succumb to those fears.

We see another factor driving mixed feelings about AI’s potential—the absence of an established legal and regulatory framework to guide its use. Many business leaders don’t have a clear view into what their organization is doing to govern AI, or what new government regulations might lie ahead. Understandably, they’re worried about the associated risks, including developing use cases today that regulators might squash tomorrow.

This uncertainty helps explain yet another seemingly contradictory finding from our survey. While business executives typically take a skeptical view of government regulation, 87% say government should play a role in regulating AI technology.

Moving on from AI whiplash

While every organization will need its own playbook to recover from AI whiplash and optimize its investment in the technology, a comprehensive plan should include five components:

A strategic investment in data. Data is the raw material of AI and the connective tissue of a digital organization. Organizations need clean, machine-digestible data labeled to train AI models, with the help of subject matter experts.

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By: Ellen Campana, Swami Chandrasekaran
Title: Navigating a surprising pandemic side effect: AI whiplash
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Published Date: Mon, 21 Jun 2021 16:00:00 +0000