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Why is big business slow on AI? 3 answers

Posted: 28 July 2017 | By Charlie Moloney

Reading articles about artificial intelligence (AI) often leaves you with that ‘late to a mixer’ feeling: everybody else looks comfortably established, and there’s no way I’m ever going to be able to establish a foothold, I’ll just grab a few salmon puffs and go home.

Don’t despair, because despite how it seems, studies show that your competition are not the AI whizzes that they appear. Only 15% of companies are using AI in their customer service strategies, according to the results of a TATA consultancy services survey published in April this year.

86% of retailers are not currently using AI to deliver a better customer experience, despite a growing desire for the technology, a survey by Boston Retail Partners (BRP), a retail management consulting firm, found in April also.

Slow and steady will not win the AI race, experts warn! Access-AI have tapped some of the finest minds in the tech industry, and here you can read what they had to say about what’s causing some of the biggest businesses around to drag their heels:

“I’m sure they’re all scared silly” – Misha Bilenko (Yandex)

At this point I think it has become a very common truth that any CIO or CTO candidate who would not have one of their first planks as integrating ML and AI would not get the job. Companies know this is inevitable.

Between the popular press and the technical press, and any publication any CIO reads – they know that they’re supposed to integrate machine learning.

The catch is that, for a lot of them, especially for large companies, 10’s of thousands of employee type organisations, they just move extremely slowly. I’m sure they’re all scared silly.

Look at start-ups, or any of these next-gen retailers, their recommenders are great, they’re really personalising their web pages and embracing the technology. For old school retailers, it takes them much longer.

There’s a huge wealth of new tools coming out, but a lot of companies traditionally have certain large providers that give them certain parts, i.e. Oracle for databases, Microsoft for operating systems, and Salesforce for CRM.

Between the popular press and the technical press, and any publication any CIO reads – they know that they’re supposed to integrate machine learning

If a clever, 20-year-old data scientist finds a cool new technology they think could boost sales, and says they need to plug it in, half the time their company will say, “forget it, this is not touching our code base”.

I think that getting around the IT, legacy stack inertia, and being much nimbler in terms of incorporating new, latest tooling, would be removing one of the key blockers in incorporating AI, assuming that companies can hire the right people.

And the people part is the big, unsolved issue. There is, if you look worldwide, a big gap in the job market, in terms of the number of data scientists. At some point, companies need somebody on the ground. They need to hire good data scientists, and that’s hard.

Some companies are amazing in the sense that they manage to make a big shift transition. If you look at IBM, they’re amazing in that sense, and Microsoft is now going through this cloud transition.

Being much nimbler in terms of incorporating new, latest tooling, would be removing one of the key blockers in incorporating AI

Target is a good example of a company that has tried to go digital much earlier, and have a combination of their website and a physical presence. I’m sure they’re somewhat shrinking the physical presence, but they seem to be at least doing reasonably well.

Being much nimbler in terms of incorporating new, latest tooling, would be removing one of the key blockers in incorporating AI

I know, from going to data science conferences, that Target are now present and they’re trying to hire. It seems like they are aggressively jumping to go digital and not be killed by Amazon, which is the worry for any retailer out there.

Misha Bilenko is now head of the Machine Intelligence and Research (MIR) department at Yandex, after a decade working at Microsoft. Yandex is a technology company that builds intelligent products and services powered by machine learning. It is one of Europe’s largest internet companies and the leading search provider in Russia.

“I don’t see enough businesses really challenge the status quo” – Bart van der Mark (Cognizant)

I see a lot of companies focus on being more efficient and fine tuning their current business models, but I don’t see enough businesses that really challenge the status quo, and think about how some start up using AI technology could completely disrupt their business model.

Look at Amazon. Amazon is basically one big AI, ML company. It’s their foundation, and based on using their data in a very smart way, they have completely changed the game. AI and ML technologies enable entirely new business models.

Companies tell me, “well, you know, this is a trend and it will fly over and it is not important for us”. Those companies I really challenge, because it’s inevitable that it will have a huge impact. It’s already happening.

To give an example: recently I had a discussion with a big postal company, who deliver the regular mail, but also packages. What they see in their business is that the regular mail is really coming down, its diminishing, but package delivery is growing because of online sales.

I had a discussion with them, I said “that’s great, you’re very successful with these parcels, but what new technologies could really disrupt your parcel business, and what threats and opportunities could that bring to the table?”

They hadn’t really thought about it, and what we then discussed is that basically delivering parcels, in a way its waste, because if I want something then it must be brought from A to B. What if there would be an alternative from getting it from A to B?

You can say that this won’t happen, and these things are too expensive, but what these companies don’t realise is that most of these technologies are in an exponential growth

What if I would just download a blueprint of the product that I wanted to have, and print it at home in my very advanced and cheap 3D printer? We would completely take away the need from taking things from A to B.

You can say that this won’t happen, and these things are too expensive, but what these companies don’t realise is that most of these technologies are in an exponential growth. What you have today, next year its twice as good and half the price, and the next year its again twice as good as compared to the year before that, and half the price.

We have seen it with CD players, we have seen it with computers, we have seen it with a lot of things, it’s just a matter of time until it also happens with AI technologies.

Bart van der Mark is the conversational AI lead in Europe for Cognizant. Cognizant provides business and technology services, catering to the specific business needs of their clients globally, and they have been named as one of Fortune’s most admired companies nine years in a row, and ranked 9th in Forbes FastTech 25.

“To me, there’s no excuse for those companies” – Eric van der Kliej, CEO, Centre for Digital revolution (C4DR)

Companies throughout the ages, the vanguards and the laggards, have shown various degrees of innovation. The corporates are at different stages of innovation readiness, and there are a small number of corporations that are seeking to maintain the friction that protects their current profits.

There should also be someone with the specific function of chief innovation officer

I recently saw a report that out of the Fortune 500 companies that existed 10 years ago – by 2050, half of them will no longer exist. It’s interesting because, to me, there’s no excuse for those companies. Every single one of them has access to innovation through various methods, programs, and activities.

I remember meeting someone a few weeks ago, a large private equity investor, and he uses AI to automatically trawl through huge volumes of listed company reports. Based on how many times the spiders and robots find instances where innovation is mentioned (you can do it fairly simply by conducting a word search) and amounts invested in innovation activities, he knows which companies are being innovative.

Now that’s interesting isn’t it, that an investor is looking for signals to give them clues as to which companies to invest in, purely based on his belief that innovation is the secret to survival.

I for one would mandate that in any company I was investing in innovation should be represented at main board level. Often it still isn’t. Sales, HR, and Technology are present on the board, but there should also be someone with the specific function of chief innovation officer.

If I was putting a bot out to look at what these corporates are doing, I would look to see whether they do have a chief innovation officer with a clear budget, a clear mandate, and even targets to bring innovation into the business to make sure it evolves.

 

Eric Van der Kleij is a technology entrepreneur and CEO of C4DR Ltd, an international hub focussed on the 4th Industrial Revolution. He is Chairman of the Advisory Group and Adviser on Fintech and Blockchain for The UK Government’s (DIT) Global Entrepreneur Programme and Special Adviser to the FinTech stream of the Zurich based Kickstart Accelerator. Previously he was the first CEO of the UK Government’s Tech City Investment Organisation, tasked by the Prime Minister with boosting investment, entrepreneurship and skills in the “Silicon Roundabout” area of East London.

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